(The Center Square) – Minnesota is seeking assistance from the Centers for Medicare and Medicaid Services to end its Housing Stabilization Services program, citing “large-scale fraud” as the reason for termination.
The Minnesota Housing and Stabilization Services program (HSS) is run by the state’s Department of Human Services (DHS) and “is a new Minnesota Medical Assistance benefit to help people with disabilities, including mental illness and substance use disorder, and seniors find and keep housing,” according to a DHS webpage.
When reached, the HSS told The Center Square that the DHS “intends to redesign and relaunch the benefit.”
“Toward that effort, DHS will work with the legislature, providers, community partners, and CMS to fully redesign the program with robust program integrity and service quality requirements to prevent bad actors from entering the program and enhance care,” the HSS said.
“Once that work is complete, DHS will then work with CMS to submit a new program framework for approval,” the HSS said.
The HSS said that despite forthcoming changes, “eligible HSS providers can continue to deliver services to enrolled individuals and individuals may continue applying to the program at this time.”
DHS decided to terminate and rework its HSS program “due to large-scale fraud found by DHS’ Office of Inspector General (OIG) data analysis and investigatory work.”
DHS Temporary Commissioner Shireen Gandhi sent a letter to CMS on August 1 requesting the center’s assistance in ending the HSS program.
“This action is necessary to safeguard Medicaid enrollees and protect the fiscal integrity of Minnesota’s Medicaid program,” Shireen wrote.
CMS did not respond to TCS’s request for comment.
When reached, Minnesota Deputy Communications Director DHS Sarah Berg referred The Center Square to portions of a press release on behalf of the department as well as DHS Temporary Commissioner Shireen Gandhi and DHS Inspector General James Clark.
In the press release, Shireen Gandhi said “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 Minnesotans in need of stable housing while lining their pockets for personal gain,” Gandhi said.
“As I made clear in my letter to CMS, our own data analysis has shown that this program does not have the necessary controls to stop bad actors, and we are urging CMS to approve our request to end this program as swiftly as possible,” Gandhi said.
Inspector General James Clark said in the release “the termination of this program, while regrettable for those who need these services, is the necessary step at this time.”
“As our OIG data and investigations have revealed, too many fraudulent, unqualified bad actors have likely stolen money from our state’s taxpayers, and also cheated Minnesotans who need housing services,” Clark said.
Minnesota state Rep. Kristin Robbins called the shutdown in a statement a “stunning admission of just how deeply broken this program has become under the Walz administration’s watch.”
HSS’ termination “confirms what we feared all along: this fraud goes far deeper than the few raids and arrests made public so far,” Robbins said.
“This was a program initially expected to cost taxpayers just $2.6 million a year, yet it ballooned to over $100 million, with fraud so rampant that the agency now admits it cannot guarantee basic program integrity,” Robbins said.
“DHS has failed in its duty to protect taxpayers and vulnerable Minnesotans, and there must be full accountability for the mismanagement that allowed this to happen,” Robbins said.
Neither Robbins nor Minnesota Rep. and House Speaker Lisa Demuth have responded to The Center Square’s multiple requests for comment.
DHS recently launched an FAQ page on HSS’ termination.
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