The Minnesota Department of Human Services recently suspended payments to 11 providers that serve adults with disabilities over “credible allegations” of fraud, according to a letter written by Temporary Commissioner Shireen Gandhi and obtained by WCCO.
According to the letter addressed to state lawmakers, the payments to 11 providers with the Integrated Community Supports program were stopped between Sept. 4 and Sept. 23, which impacted additional providers.
“The payment withholds for these 11 ICS providers extend to all affiliated services, resulting in suspended payments to an additional 17 providers,” Gandhi said in the letter.
ICS is a Medicaid service that provides training and help to adults with disabilities who live in a “unit of a provider-controlled ICS setting,” according to the state’s DHS website. Training may include community participation, health, safety and wellness, household management or adaptive skills.
“It fills the gap between a person living in their own home and more restrictive settings such as a group home or assisted living,” Gandhi said.
The fraud allegations “primarily concern” ICS providers billing DHS for services that weren’t provided, Gandhi said.
DHS staff are allegedly reaching out to county waiver case managers to discuss how clients may be impacted. Waiver case managers, according to the letter, are responsible for planning services with clients and will help them pick alternate services and providers.
The DHS, in a written statement to WCCO, said it’s not able to release information about the payments that were withheld in an effort to “protect the integrity of the investigations” into the providers.
“We are taking more aggressive actions to stop payments, including relying on tips and data mining that demonstrate a credible allegation of fraud,” the statement said. “A payment withhold is a temporary action that is taken while an investigation is pending. All of the providers who are subject to the recent payment withholds have the opportunity to challenge these actions through a reconsideration process.”
No charges have been announced.
According to Gandhi, DHS recently shared information with all home- and community-based service providers to inform them about the anti-kickback law that went into effect on Aug. 1. The law makes it illegal for providers in Minnesota to offer money to people to sign up for services, and bans providers from financially rewarding businesses to refer individuals.
The move to suspend payments comes amid a federal investigation of a “massive scheme to defraud” Minnesota’s Housing Stabilization Services program, according to court documents. The investigation involves the Minnesota Medical Assistance benefit meant to help find and maintain homes for people with disabilities. Earlier this month, the U.S. attorney in Minnesota announced charges against eight people in connection with the probe.
A DHS spokesperson confirmed that Eric Grumdahl, an official who oversaw the housing services program, was no longer working for the state agency as of Sept. 16, though the reason for his exit is unclear. The department, in a statement to WCCO, cited state law that says the reasons for an employee’s separation is not public data.
On Wednesday, a 28-year-old Minneapolis woman was charged in a $14 million autism fraud scheme and in the Feeding Our Future fraud scheme.
Gandhi said the DHS has taken “significant administrative actions” since the legislative session, and that the agency is “now seeing businesses working together to game the system, as opposed to single bad actors or rogue employees.”
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