State disenrollment hits more than half of high-risk Medicaid providers

Minnesota moved to disenroll 3,411 high-risk Medicaid providers after a statewide review of 5,583 records, a crackdown that could cut off personal care assistance, autism-related services and nonemergency transportation for patients in St. Louis County and across the state.

The Minnesota Department of Human Services said 2,061 providers were revalidated and can keep billing Medicaid without interruption. Another 3,411 received disenrollment notices, with 2,491 tied to incomplete paperwork and documentation, 916 linked to failed verification at site visits, four based on failed background studies, and 59 referred to the DHS Office of Inspector General for further review.

The review covered 13 high-risk Medicaid service categories and was accelerated after federal pressure from the Centers for Medicare & Medicaid Services, which had threatened to withhold up to $2 billion in Medicaid funding unless Minnesota strengthened fraud controls. Gov. Tim Walz ordered a third-party audit of Medicaid billing on Oct. 29, 2025, after the programs were flagged as vulnerable to fraud, waste and abuse.

DHS said providers normally go through revalidation every three to five years, but this round was pushed to meet a federal deadline of May 31, 2026. The agency said it began outreach in January, sending at least three written notices and making more than 6,500 follow-up phone calls, along with weekly virtual meetings, community events, a newsletter, online FAQs and daily technical sessions.

Providers who received disenrollment notices have 60 days to appeal. The state said payments stop once a provider is disenrolled, although reinstatement may be possible if an appeal is backed by the required documentation. That leaves disability-service providers, home-based agencies and transportation vendors serving St. Louis County residents facing an immediate risk of interruption if they missed paperwork deadlines or failed a site visit review.

Advocates and provider groups have warned that the fast-moving process may have swept in legitimate providers along with fraudulent ones. Disability-service organizations said many providers were still pending as late as May 27 and argued the agency may have run out of time to complete full reviews. Some providers said their terminations appeared to hinge on paperwork or communication problems rather than fraud, and at least one said a cited site visit never happened.

DHS has created a website to help Medicaid clients find new services as the disenrollment notices move through the appeal window. For families in St. Louis County who depend on disability and home-based care, the stakes are immediate: a fraud crackdown that was meant to protect Medicaid funding now risks leaving some legitimate patients scrambling for new providers.