Minnesota Halts Payments to 50 Housing Stabilization Providers Amid Federal Fraud Investigation

Minnesota Governor Tim Walz has halted payments to about 50 providers in the state's Housing Stabilization Services (HSS) program amid a federal investigation into widespread Medicaid fraud. The program, intended to assist elderly and disabled residents in securing housing, has seen costs soar from initial estimates of $2.6 million to over $100 million annually, with FBI and U.S. Attorney officials labeling it highly vulnerable to fraud. Federal agents executed search warrants on multiple providers accused of submitting fraudulent claims for services not rendered, with some providers potentially facing lawsuits for payment suspensions. Minnesota's Department of Human Services used new data analytics to identify suspicious billing patterns, leading to payment suspensions and referrals to law enforcement. Governor Walz acknowledged the need for stronger safeguards despite concerns that legitimate providers and recipients may experience delays. The ongoing investigation is part of broader concerns that government fraud in Minnesota could exceed $1 billion, prompting calls for increased oversight and audits.