Minnesota resumes Medicaid payments to providers, easing rural care concerns

Minnesota’s decision to resume Medicaid payments to many previously disenrolled providers is easing fears in rural Otter Tail County, where one billing interruption can quickly become a missed ride, a delayed home visit or a longer trip to care in another town. The payments will again flow to providers that filed appeals by June 9, after the state’s revalidation sweep had cut them off.

The action grew out of a statewide review ordered after Gov. Tim Walz’s Oct. 29, 2025, directive for a third-party audit of Medicaid billing. The Minnesota Department of Human Services said the federal Centers for Medicare & Medicaid Services threatened to withhold up to $2 billion from Minnesota’s Medicaid program, a risk that could have shaken coverage for about 1.2 million Minnesotans.

DHS reviewed roughly 5,500 to 5,583 providers in 13 high-risk Medicaid service categories and disenrolled more than 3,000, or about 3,400, in the initial sweep. Many of those terminations were tied to incomplete paperwork or documentation, and the review also included fingerprint background studies and unannounced site visits. Providers in the designated high-risk categories had a May 31 deadline to complete revalidation.

For Otter Tail County families, the most immediate impact landed on personal care assistance, autism-related services and transportation to medical appointments. Those are the kinds of services that keep people in their homes, help children reach therapy and make it possible for patients in Perham and across the county to reach clinics without driving hours for each visit. When payments stop, small agencies and rural specialists often feel it first, and patients can feel it in canceled schedules and disrupted continuity of care.

The state had previously delayed payments to those high-risk providers in December 2025 before restoring them weeks later, underscoring how unstable the process has been for smaller operations working on thin margins. Sen. Jim Abeler, R-Anoka, called the process “a disaster from the very beginning,” while Sue Schettle, chief executive of the Association of Residential Resources Minnesota, said the resumption was a move “in the right direction.” Mike Beltowsky, vice president of program development at Horowitz Integrated Services, warned that lives and quality care were at risk, and DHS deputy commissioner Shireen Gandhi said the review was necessary because what is seen on site must match what is submitted.

For Medicaid patients who lost appointments, providers or billing continuity, the next step is to check with the provider directly, confirm whether an appeal was filed, and ask whether services are back on schedule. In a county where distance already shapes access, the state’s reversal may help services reopen and stabilize, but the larger question remains whether the review will satisfy federal standards without another round of disruption.