Minnesota officials said Tuesday that a federal hold on $243 million to support the state's Medicaid programs has not yet been released by the Centers for Medicare & Medicaid Services, even though the federal government approved the state’s corrective action plan to prevent fraud.
“I'm certainly concerned that it hasn't been released,” Minnesota’s Medicaid director John Connolly said. “We're in active litigation about this and are requesting that CMS release that deferral, and we have received indication that we have completed milestones in that corrective action plan.”
In late February, Dr. Mehmet Oz, CMS administrator and Vice President JD Vance said the federal government would freeze funds because Minnesota had not adequately addressed fraud in certain Medicaid programs, including those related to autism treatment.
The Minnesota Department of Human Services said the corrective action plan accepted by CMS was submitted on Jan. 30. State officials said CMS recognized the state met both its Feb. 1 and March 1 goals before the corrective action plan was approved.
The Centers for Medicare and Medicaid Services wrote a letter to the Department of Human Services on March 19 informing the state that its plan to fix vulnerabilities was deemed sufficient. An additional expectation from CMS was that the state will implement a revalidation program for high-risk service providers by the end of May.
Connolly said the state is on schedule to complete the revalidation process and has communicated this information to CMS.
He also discussed in a Tuesday press briefing the governor’s plans to centralize oversight of the state’s human services department to streamline fraud prevention. This includes eliminating managed care organizations, also known as health plans or prepaid health plans, within the Medicaid program, and shifting some Medicaid eligibility responsibilities from counties to the state.
“It just allows for easier monitoring and oversight, and direct visibility into the different operations, whether it's with MCOs or eligibility and enrollment processes,” Connolly said.
But the plan drew criticism from both Democrats and Republicans when it was announced.
State Sen. Jordan Rasmusson, the ranking Republican on the Senate Human Services Committee, dismissed Walz’s proposal as “yet another attempt to paper over the state’s fraud problem.”
Minnesotans are “still staring at this administration’s failures to protect taxpayers and the Minnesotans who rely on these services,” Rasmusson, R-Fergus Falls, said in a statement.
The governor’s plan still needs lawmaker approval.
MPR News reporters Peter Cox and Dana Ferguson contributed to this report.