Alone and in collaboration with other state agencies, DHS is tasked to execute 16 directives from Governor Tim Walz’s recent Executive Order to prevent fraud, waste and abuse in state programs. By executing these directives DHS strengthens program integrity across the state. This work is not done in isolation, it requires partnerships with political leaders, law enforcement, care providers, Tribal and county governments, and concerned citizens to ensure Medicaid dollars go to the most vulnerable Minnesotans.
Top stories:
- Governor Walz Orders Third-Party Audit of Medicaid Billing at DHS
- DHS identifies high-risk providers, notifies CMS
- Minnesota disenrolls inactive Medicaid providers
- DHS moves to terminate Housing Stabilization Services program
- Minnesota increases oversight of autism and some housing services providers
"We take a zero-tolerance approach to fraud and will continue to take quick action to halt payments to any provider organizations we believe have been committing fraud. Enough is enough."
— Temporary Commissioner Shireen Gandhi
Total Medicaid spending:
$20.9 Billion
Paid to providers in 2024
Medicaid provider organizations:
40 Thousand
Providers paid in 2024
Medicaid program recipients:
1.2 Million
Average monthly enrollment in 2024
What is Fraud, Waste and Abuse?
To determine if someone committed fraud, law enforcement must show they acted intentionally and not through error.
Fraud is the intentional and criminal misuse of Medicaid funds.
Common examples: Intentionally billing for services that were not performed or billing for more services than delivered.
Waste and abuse are the unintentional and noncriminal misuse of Medicaid funds.
Common examples: Accidentally billing for a more expensive service or unknowingly billing for services that Medicaid does not deem necessary.
Timeline of actions taken
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October 2025
Establish a pre-payment review
Payments paused for up to 90 days until third-party audit of claims complete.
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October 2025
Disenroll inactive providers
Includes Medicaid providers without billing activity within the past 12 months.
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October 2025
Improve stop-payment efficiency in consultation with law enforcement.
Staff moves more quickly to implement stop payments to providers when fraud detected.
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October 2025
Second additional high-risk designations
Nine additional Medicaid services rated high risk.
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August 2025
HSS termination
Unprecedented decision to terminate program after Oct. 31.
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July 2025
DCT splits from DHS
Direct Care and Treatment (DCT) separates from DHS and stood up as an independent agency.
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May 2025
Legislation passes
Includes stricter controls for HSS, autism services and other DHS programs.
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May 2025
First additional high-risk designations
EIDBI (autism services) and Housing Stabilization Services (HSS) labeled “high-risk” provider types.
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March 2025
New inspector general hired
James Clark has a decade-long record of prosecuting Medicaid fraud.
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February 2025
Temporary commissioner named
Governor Walz appoints Temporary Commissioner Shireen Gandhi to lead DHS.
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October 2024
Added scrutiny for EIDBI providers
EIDBI provider audit and on-site visits begin.
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July 2024
DCYF splits from DHS
Department of Children, Youth and Families (DCYF) separates from DHS and stood up as an independent agency.
"Medicaid oversight is a shared responsibility. We need to make it harder for fly-by-night providers to gain access to our programs. We need increased vetting on the front end, and we also need technology solutions on the back end to better monitor providers."
— DHS Inspector General James Clark
Increasing transparency
DHS understands that our work to prevent fraud, waste and abuse is important to Minnesotans and that many want a better understanding of our work and its challenges. That’s why DHS is taking steps to be proactively transparent when it won’t compromise our investigative work or reveal private data. DHS has taken a number of recent steps to build transparency, and DHS will continue to work with Governor Walz to inform Minnesotans about current actions to prevent fraud, waste and abuse.
We strive for transparency, but sometimes the work requires secrecy. If someone wanted to commit fraud and knew the investigative process, it would be easier for them to avoid detection. If we shared the findings from an investigation before the State's Attorney General's Medicaid Fraud Control Unit could bring a bad actor to trial, the case might be compromised, allowing fraud to go unpunished. Lastly, much of the data contains private medical records that we are required to safeguard.
Actions taken
- DHS can now acknowledge payment withholds when doing so will not impact an investigation. The change gives Minnesotans more insight into efforts to stop fraud.
- 2025 legislative changes allow DHS to share more investigative data with other agencies and more proactively alert those agencies about fraudulent actors. This helps ensure that individuals flagged by one agency are not funded by another.
- The DHS License Lookup lists current licensing status and any violations for all DHS licensed providers, allowing potential recipients to make more informed decisions on where to receive care.
Prevention
Having a robust fraud prevention network stops fraud before it occurs. Prevention efforts involve every step of the Medicaid funding process, from the legislature and setting careful criteria for who can serve as a provider to improving training for staff to prevent fraud. DHS is elevating more providers to “high-risk” status to increase oversight, like the Early Intensive Developmental and Behavioral Intervention (EIDBI) program.
Providers terminated for no activity:
In fall 2025, we terminated 761 provider agencies due to inactivity. In the spring 2025, we terminated over 96,000 individual providers for the same reason. None of these individuals and agencies had billed Medicaid in the past year. By removing them from the roster, we’re able to get a clearer picture of Minnesota’s Medicaid landscape and better detect irregularities.
Current situation
- Total number of Medicaid providers: 306,070
- Number of provider types: 87
Examples: Hospitals, mental health centers, nursing facilities
High-risk provider types
- Adult Companion Services
- Adult Day Services
- Adult Rehabilitative Mental Health Services
- Assertive Community Treatment
- Community First Services and Supports
- Early Intensive Developmental and Behavioral Intervention
- Housing Stabilization Services
- Individualized Home Supports
- Integrated Community Supports
- Intensive Residential Treatment Services
- Night Supervision Services
- Nonemergency Medical Transportation Services
- Recovery Peer Support
- Recuperative Care
Actions taken
- DHS has identified 14 Medicaid service provider types as “high-risk” based on programmatic vulnerabilities, evidence of fraudulent activity, or data analytics that revealed potentially suspicious patterns, claim anomalies or outliers. This designation requires providers to undergo additional screening measures both at the time of enrollment and during revalidation.
- 2025 legislation gave DHS screening staff more tools to deny potential provider applications. This change stops more fraudulent providers from ever billing Medicaid by cutting them off before they enroll.
- DHS is stepping up work to educate providers so they can avoid waste and abuse in their billing.
- DHS is hiring a public funds coordinator to better monitor payments to grantees.
"DHS is rooting out fraud wherever we find it. We cannot allow one more cent of taxpayer money going out the door to providers who claim to serve while lining their pockets for personal gain."
— Temporary Commissioner Shireen Gandhi
Detection
DHS oversees payments in the entire Medicaid program in Minnesota. The vast majority of Minnesota’s Medicaid providers deliver necessary care to over 1 million Minnesotans each year. Every day the agency works to detect fraud, waste and abuse that undermine this essential support. DHS takes a zero-tolerance approach to fraud, and by detecting it earlier, we can keep Medicaid funds from going to fraudulent providers.
Pre-payment reviews for 14 programs
Governor Tim Walz announced he has ordered a third-party audit of billing for 14 high-risk Medicaid services. Payments for these programs will be paused for up to 90 days in order to detect suspicious billing activity and scrutinize the use of public funds. Read more
Actions taken
- DHS is utilizing new data analytics tools to uncover fraud, waste and abuse. These new tools initially flagged discrepancies in Housing Stabilization Services providers, leading to a wave of investigations and payment withholds on these providers.
- DHS hired a Limits on Receiving Public Funds Coordinator to streamline OIG data and prevent sanctioned individuals and providers from circumventing payment withholds.
- DHS expanded unannounced onsite visits to detect fraud, waste and abuse and uncover licensing violations. DHS is currently making unannounced visits to every EIDBI provider, and we will continue to use this practice, especially for high-risk providers.
Enforcement
We hold providers accountable for fraud, waste and abuse. DHS is not a prosecuting agency, which means when we uncover a credible allegation of fraud, we refer the case to the Medicaid Fraud Control Unit (MFCU) at the Minnesota Attorney General's Office for criminal prosecution. MFCU and other law enforcement partners, like the U.S. Attorney's Office and FBI, use DHS casework to build a legal case. DHS continues to support our law enforcement partner until they close the case.
Current situation
- Open intakes: 2,087
- Open cases: 1,275
Note: 2025 data is through November
Actions taken
- Payment withholds stop Medicaid dollars from continuing to go to fraudulent providers. Already in 2025, DHS has imposed more than twice as many payment withholds as we did in other recent years.
- Since 2020, DHS has conducted over 3,000 investigations and referred over 500 cases to law enforcement.
- Since 2020, DHS has identified more than $50 million for recovery.
- For every dollar invested in our investigators, we return $2.29 in monetary recoveries and cost avoidance.
The following charts show how an allegation of fraud, waste or abuse moves through DHS's Enforcement process. This process is led by the Program Integrity Oversight Division (PIO) in the Office of the Inspector General. PIO provides accountability to ensure that taxpayer dollars are spent efficiently.
Note: 2025 data is through November
