Human Services' Medicaid provider revalidation process draws criticism from Minnesota lawmakers

Thousands of providers who were cut off from Medicaid billing can once again receive funds, at least for now, as the Minnesota Department of Human Services navigates a revalidation process drawing bipartisan criticism. 

Last week, DHS said it reviewed 5,583 providers, of which 2,061 were revalidated and are providing services without interruption. The department notified 3,411 providers that they will be disenrolled, 111 were removed from review because they no longer provide high-risk services and 59 were sent to the state's Office of Inspector General for further review. 

Now, the department said that billing is back on for about 2,140 providers who submitted appeals. If they had appealed by Tuesday, they would have billing back on for this current cycle; others will have to wait. 

"We don't want to harm legitimate providers. We care deeply that vulnerable Minnesotans are getting the care they need from trusted providers. We also have to make sure that providers are meeting legal requirements to provide services," the department said in a statement. 

The change comes amid confusion from certain providers whose owners tell WCCO they've done nothing wrong and are being unfairly punished as DHS tries to eliminate fraud. Republican state Sen. Jordan Rasmusson said that he has heard from providers in his district who believe that the revalidation process was riddled with errors. 

"The challenge with the Department of Human Services is they can't tell a good provider from a fraudulent one," Rasmusson said. 

The Republican serves on the Minnesota Senate Human Services Committee alongside DFL Sen. Erin May Quade, who had similar sentiments about DHS's shortfalls. 

"The Department of Human Services has handled this with lack of communication to providers, Minnesotans with disabilities, and the public, leaving us in the dark about what is going on," May Quade said in a statement. 

It's a somewhat rare moment of bipartisan agreement in a fraud crisis that is fraught with political division. The revalidation process has not eliminated those disagreements, with Rasmusson placing blame on Gov. Tim Walz's administration for allowing fraud to spiral out of control within DHS. May Quade said that the current revalidation woes originate with the Trump Administration and the federal threat of withholding billions of Medicaid dollars. 

"RFK Jr. and Dr. Oz got what they wanted: thousands of Minnesotans kicked off Medicaid. What other states are given years to complete, Minnesota got just months, jeopardizing $2 billion a year in Medicaid funding, and with the livelihoods of healthcare workers and the lives of hundreds of thousands of care recipients at stake," May Quade said. 

While she expressed cautious optimism that the department is starting to respond positively to recent questions and concerns, Rasmusson does not believe the agency can right the ship. 

"It seems like every week they're bouncing from a new crisis to a new crisis," Sen. Rasmusson said. 

Faye Bernstein, a DHS employee who has claimed that her bosses retaliated against her for raising concerns about fraud in 2019, said that she is now hearing from others who are worried about the revalidation process. She said that she's in the same union as various state employees who were tasked with performing site visits and has heard that many felt ill-equipped to handle the job. 

"The people who are trained to do the revalidation had inadequate training and they are very concerned about the validity of the work they were doing, both false negatives and false positives," Bernstein said. 

DHS said that resources were allocated to ensure that employees who volunteered to assist with revalidation were supported, including weekly team meetings and sending out people in teams. 

"The Minnesota Department of Human Services knew from the beginning of the Minnesota Revalidate 2026 initiative that we would need additional teammates to fulfill the ambitious timeline. State employees from other DHS divisions and state agencies volunteered to be part of the effort. Those employees received two days of training as they onboarded regarding the objectives and requirements of revalidation site visits," the agency said in a statement.