[ST. PAUL, MN] – Governor Tim Walz today announced that 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. 

Using funding passed during the 2025 legislative session, the Department of Human Services (DHS) has contracted with Optum, which will analyze Medicaid fee-for-service claims data and flag potential issues for DHS review. Optum’s analytics will identify irregularities such as missing documentation, unusually high billing patterns, or inconsistencies suggesting that a claim may not meet program requirements. The new layer of review will safeguard Medicaid dollars before payments go out.

“We cannot effectively deliver programs and services if they don’t have the backing of the public’s trust. In order to restore that trust we are pumping the brakes on 14 programs that were created to help the most disadvantaged among us, yet have become the target of criminal activity,” said Governor Walz. “If you attempt to defraud our public programs and steal taxpayer dollars out from under the people who need them most – you will be stopped, and you will be held accountable.” 

“We’re taking a systematic approach to finding and stopping fraud,” said temporary Human Services Commissioner Shireen Gandhi. “Adding outside review before payments go out and increasing safeguards for these high-risk services will preserve resources necessary to serve Minnesota’s children, people with disabilities and older adults.” 

The Human Services Department designated the 14 Medicaid services as high-risk based on programmatic vulnerabilities, evidence of fraudulent activity, or data analytics that revealed potentially suspicious patterns, claim anomalies, or outliers. The state previously moved to terminate the Housing Stabilization Services program.

Claims flagged by Optum will then be verified by the Minnesota Department of Human Services to confirm whether services were provided as billed. Claims suspected to be improper will be referred to the agency’s Office of Inspector General for review and possible investigation. 

Outside review of payments may result in longer wait times before providers are paid, while their claims undergo review. However, the state will still meet federal rules requiring payment within 90 days.

Pre-payment review will initially impact state payments for 14 services identified as high-risk for billing irregularities or fraud, including: Early Intensive Developmental and Behavioral Intervention services for autism, Integrated Community Supports, Nonemergency Medical Transportation, Peer Recovery Services, Adult Rehabilitative Mental Health Services, Adult Day Services, Personal Care Assistance/Community First Services and Supports, Recuperative Care, Individualized Home Supports, Adult Companion Services, Night Supervision, Assertive Community Treatment, Intensive Residential Treatment Services, and Housing Stabilization Services.

High-risk services are also subject to stricter oversight requirements, including mandated enhanced fingerprint background studies for owners of provider agencies, initial screening visits and unannounced site visits.