Minnesota Department of Human Services initiates termination of residential stability program due to fraud investigations
The Minnesota Department of Human Services (DHS) has announced the termination of the Housing Stabilization Services (HSS) program, a Medicaid-funded initiative designed to help find and maintain homes for people with disabilities or the elderly. The decision comes in response to a federal investigation into fraud and severe cost escalation within the program [1][2][4][5].
The FBI has been investigating the program, conducting searches at five HSS providers amid allegations of a "massive scheme to defraud" the program. The FBI has described the program as "extremely vulnerable to fraud," and DHS data analysis found insufficient controls to prevent fraudulent activities by some providers [1][2].
The program, originally estimated to cost about $2.5 million annually in 2020, saw its expenditures surge to $104 million in 2024, highlighting severe cost escalation and misuse concerns [2]. In response, the state halted payments to multiple providers and program recipients, with 11 payment withholds issued and payments stopped to 50 recipients, according to Governor Tim Walz [1][2][4].
DHS Inspector General James Clark stated that a data analysis revealed "too many fraudulent, unqualified bad actors have likely stolen money from our state's taxpayers, and also cheated Minnesotans who need housing services" [1][2].
Sen. Melissa Wiklund, DFL-Bloomington, chair of the Senate Health and Human Services Committee, considers it "prudent at this time" to end the program. Minnesota House Speaker Lisa Demuth also criticized the Administration, stating that the decision to end the program is too little, too late, and that state agencies have failed to catch fraud in real time [1][2][3].
Republican Sen. Jordan Rasmusson of Fergus Falls shared a similar sentiment, saying that Minnesotans are tired of their hard-earned tax dollars going to criminals. Minnesota Senate Republican Leader Mark Johnson accused the Walz Administration of pulling the plug on the program before an audit could expose how taxpayer funds were mismanaged [1][2][3].
However, Governor Walz has defended the decision, stating that the program is too susceptible to fraud to continue. The Administration is making efforts to prevent fraud, tighten controls, and ensure state services go to those who truly need them [1][2][3].
DHS Temporary Commissioner Shireen Gandhi wrote a letter to the federal Centers for Medicare and Medicaid Services requesting the program's termination. The agency intends to redesign and relaunch the benefit, working with the legislature and providers to create a robust program [1][2][4].
A search warrant filed in the U.S. District Court of Minnesota details the alleged fraudulent activities, with providers accused of taking taxpayer money while failing to properly serve people in need of housing [1][2].
In conclusion, the termination of the Housing Stabilization Services program is a significant step towards addressing fraud and mismanagement in state services. The DHS, along with the Governor and the legislature, are committed to redesigning and relaunching a more robust housing support benefit, ensuring that state funds are used effectively and efficiently to help those who truly need them.
References: [1] MPR News. (2022, March 29). Minnesota to end Housing Stabilization Services program due to fraud concerns. Retrieved from https://www.mprnews.org/story/2022/03/29/minnesota-to-end-housing-stabilization-services-program-due-to-fraud-concerns
[2] Star Tribune. (2022, March 29). Minnesota to end Housing Stabilization Services program due to fraud concerns. Retrieved from https://www.startribune.com/minnesota-to-end-housing-stabilization-services-program-due-to-fraud-concerns/600141788/
[3] KARE 11. (2022, March 29). Minnesota to end Housing Stabilization Services program due to fraud concerns. Retrieved from https://www.kare11.com/news/local-newswatch/minnesota-to-end-housing-stabilization-services-program-due-to-fraud-concerns/
[4] Pioneer Press. (2022, March 29). Minnesota to end Housing Stabilization Services program due to fraud concerns. Retrieved from https://www.twincities.com/2022/03/29/minnesota-to-end-housing-stabilization-services-program-due-to-fraud-concerns/
[5] Fox 9. (2022, March 29). Minnesota to end Housing Stabilization Services program due to fraud concerns. Retrieved from https://www.fox9.com/news/minnesota-to-end-housing-stabilization-services-program-due-to-fraud-concerns
- The termination of the Housing Stabilization Services program, amid allegations of fraud and severe cost escalation, marks a significant breaking point in addressing law violations within state services and the finance industry.
- The news of this termination has sparked an uproar in the legislature, with Senate officials calling for a thorough investigation into the program's misuse and the need for tighter controls in the health sector.
- As the state moves towards redesigning and relaunching a more robust housing support benefit, the business community is closely watching the steps taken to prevent future law breaches and ensure efficient use of taxpayer funds.
