Monday
House Fraud Prevention and State Agency Oversight Policy:
The committee reviewed HF3542 (Hudson), which would require
disclosure of investigations into possible overpayments within 30 days of a
request. DHS officials expressed concern that such a disclosure could tip off
those committing fraud and potentially allow them to do things like falsify or
destroy records, hide information, or coordinate stories that could thwart the
completion of an investigation. The bill passed on a voice vote and was sent
to the House Children and Families Committee.
Tuesday Senate Health and Human Services: DCYF
updated the committee on several issues. 20260224_DCYF-Updates.pdf
SSIS: DCYF Commissioner Tikki Brown indicated that
the planning process is underway, with an approval request expected to be
submitted in May. Procurement is expected to take about 18 months, which
includes the federal approval process. A contract with a new vendor is expected
by 2027.
Responding to Commissioner Brown’s report that they are working
with MN.IT to develop a process, Sen. Mark Koran commented that due to the size
of this project, the state should utilize an “invitation to negotiate” process,
rather than the standard procurement method.
Electronic Attendance: DCYF is currently working with the
software vendor to implement. It is anticipated that the system will begin to
roll out in June 2026. At that time, DCYF will begin requiring some child care
providers that receive CCAP payments to submit electronic attendance records.
The system will be able to flag abnormalities and cross-check records, making
regular compliance checks substantially easier and allowing for increasing
oversight and more comprehensive investigations. CCAP-Program-Integrity_Legislative-History.pdf
Federal Action Regarding SNAP Program: Dr.
Shaneen Moore, DCYF Assistant Commissioner, walked the committee through the
upcoming changes to SNAP:
- Administration:
Federal reimbursement will be reduced from 50% to 25%, effective October
1, 2026. Minnesota will receive an estimated $39 million less annually,
and $2.1 million will be lost for SNAP outreach activities.
- Benefit:
Starting October 1, 2027, states will be required to pay a share of SNAP
benefits based on payment error rates. Minnesota’s required share is
estimated to be 10% of benefit costs or $97 million annually.
Sen. Paul Utke commented on payment errors and connected it to the
archaic technology systems that counties continue to use.
The Department indicated that Income verification, validating
household size, and utility deductions are the primary areas where they see
errors, and they continue to work with county and tribal partners with enhanced
training.
AMC_SNAP-2026_v2.pdf
Child Care Regulation Modernization Report: DCYF
submitted its final proposed revisions to child care licensing standards. It
noted that progress is being made in three primary areas: (1) revised licensing
standards, (2) the Weighted Risk System, and (3) abbreviated inspections. Each
recommendation was shaped by extensive stakeholder input, informed by current
research, national industry standards, and grounded in health and safety.
- The proposed licensing
standards promote more child-centered environments through updated
behavior guidance requirements that emphasize developmentally appropriate,
positive behavior supports that reflect what is now known about healthy
child development. Family-friendly requirements, such as disclosure of
radon testing and results, help parents make informed decisions about
their child’s care. The proposed standards also seek to balance these
elements with fairness to providers. Some requirements have been
strengthened - such as adding fire safety training for family child care
providers -while others have been made more flexible - such as expanding
capacity for infants and toddlers in certain license classes.
- The Weighted Risk System
assigns each licensing standard a category of low, medium, or high-risk,
ensuring that violations are addressed proportionally and consistently
across licensors and programs.
- Abbreviated inspections will
allow for shorter visits for providers in good standing, reducing
administrative burden while maintaining necessary oversight and
accountability.
Tuesday House Human Services:
DHS provided the committee with an overview of the upcoming
changes to Medicaid due to last year’s federal bill. Changes include work
requirements, 6-month renewals, cost sharing requirements, changes to
retroactive coverage, changes to eligible lawful immigration statuses, changes
to federal funding, and limitations on health care taxes. HR1
Medicaid Changes_Feb 2026.pdf
County Presentation: Paul Verrette (AMC/MACSSA), Scott
County Human Services Director Barb Dahl, and Angela Youngerberg from ALY
Strategies, walked the committee through the many impacts on counties and the
people served, including more frequent eligibility determinations and work
requirements. They also highlighted the urgent need for modernizing county
technology systems, both for short-term bridging supports and for the long-term
modernization plan to create an integrated platform.
Member comments:
Rep. Heather Keeler expressed the need for technology
modernization, but highlighted the importance of the sensitivity of the
information being shared. She asked about burnout and caseload size.
- Barb Dahl agreed that burnout is
real; in Scott County, caseworkers have between 700-800 MA cases; and the
county currently have 31,000 MA recipients, with about 3,500 of them in
the single adult group, which will require 2-3 additional employees to
fulfill the federal directives.
Chair Mohamud Noor commented that system challenges are
attributable to Minnesota’s 9% error rate for SNAP; this equates to $86 million
in penalties.
Committee documents:
Video Link
– county presentation starts at the 1 hour, 18-minute mark
HR1
County Impacts 2-24.pdf
HR1
Medicaid Impact Overview 2-24.pdf
Tuesday House Children and Families:
Modernization of child care licensing and investigations: Educators
and child care workers are advocating for recommendations outlined by Think
Small, a nonprofit focused on improving early child care in Minnesota. The
report highlights multiple recommendations, including clear and funded child
care options, the establishment of a Minnesota Board of Early Care and
Education, and the establishment of early care and education program pathways,
and “right-sizing” health and safety licensing. Think
Small presentation
The current licensure, new regulation, and investigative process
at DCYF was outlined by the Department’s Inspector General, Randy Keys. Overview
In October 2022, DHS began its work by surveying stakeholders.
Since then, they have conducted 23 listening sessions, interviewed individual
providers, and worked with county licensor focus groups.
Key Changes for Child Care Centers:
- Staff: Reduced and simplified
qualifications and reduced hours of annual in-service training.
- Activities and equipment:
Simplified and clarified language.
- Health: Removed requirements to
collect annual physicals and a child’s dental provider information,
reduced frequency of health consultant visits for programs serving
infants, and clarified food allergy requirements.
- Outdoor play and fall zones:
Established fall zone safety requirements and expectations for daily
outdoor activities.
- Facilities: Established fire
inspections every 5 years.
Key Changes for Family Child Care:
- Process: Streamlined the number
of license classes and moved variance approval to DCYF for consistency.
- Capacity: Expanded capacity in
several licensing classes.
- Activities: Clarified rules
around activities and equipment while maintaining flexibility.
- Training: Reorganized training
requirements to increase clarity, reduce number of continuing education
hours, and added fire prevention training requirements every 5 years.
- Overnight care: Added and
clarified requirements.
- Transparency. Required parental
notification of the presence of firearms.
Wednesday House Human Services:
Medicaid
Prepayment Reviews: DHS Deputy
Commissioner John Connolly walked the committee through the Department’s new
proactive process where state agencies and managed care organizations will
examine providers’ claims before issuing payment. It is being used as a tool to
prevent improper payments - ensuring only valid services are paid. Prepayment
review was part of the Governor’s 2025 budget recommendations and funded in
last year’s omnibus bill.
Connolly illustrated key issues that
have been undertaken, including identifying 14 “high-risk” services and
establishing a program integrity dashboard for the public; auditing autism
service providers, including on-site visits; discontinuing the Housing
Stabilization Services program; establishing a moratorium on adding new service
providers in the 14 high-risk services; enhancing pre-payment review before
fee-for-service payments are made to providers in the 14 high-risk services;
reviewing and revalidating providers in the 14 high-risk services; and
reorganizing DHS to increase program integrity.
A representative from Optum indicated
that they had done a claims review of the 14 high-risk programs identified by
the Department, which have been associated with fraud. Concerns were expressed
by several members that much of Optum’s report is redacted and not helpful to
the Legislature.
To that end, Co-Chair Joe Schomacker
presented HF3378, which would require DHS to
release the unredacted initial reports. The bill passed and was referred to
Judiciary.
DHS Prepayment Presentation
Wednesday, House Children and Families:
In their presentation,
Scott County Human Services Director Barb Dahl and Clay County Commissioner
Jenny Gorneau addressed the many county challenges as a result of HR1. They
highlighted the cost shifts specifically as it relates to the administration of
SNAP, as well as the new shift related to the benefit itself based on “payment
errors.” DCYF estimates $145 million in total impacts due to these cost shifts.
It was noted that this is a federal program; it was never intended to be paid
for by property taxpayers.
Scott County Experience:
- In Federal FY24 Scott County served over 4,000 SNAP cases.
- 10 of those cases were reviewed for payment accuracy (less than .3%)
- $2,113 in total benefits were issued
- $149 was deemed in error,
resulting in an 8% error rate (statewide).
- That 8% figure could result in Scott County taxpayers footing a bill of over $1
million + in projected benefit costs
($97 million in statewide penalties (2024 error rate)
Member comments:
Rep. Nathan Coulter asked whether the error rate includes both
under and overpayments.
- Barb Dahl: it includes client
errors, overpayments, underpayments, and overpayments where funding was
recoupled
- 41% due to client error (2024
statewide)
Coulter: what will this do to county levies?
- Comm. Morgeau: Levy increases
have been historic; Clay County’s levy was 16% last year. SNAP cost shifts
would be in the 2-3% range.
Co-Chair Nolan West stated that, while the State does not excess
money right now, we need to go through the budget to reprioritize with dollars
that we already have.
Thursday Senate Human Services:
BHA
Grants: The Office of the Legislative Auditor provided information from
its audit of DHS Behavioral Health Administration Grants. They concluded that
most requirements tested did not have adequate internal controls over grant
funds. Findings include:
- using single source grants when
they were not justified and did not always sufficiently document its
reasons for using single source grants;
- not always executing grant
agreement amendments before the original grant agreements expired;
- paying some grantees for work
performed before it fully executed the grant agreements;
- overpayments to grantees; and
- several prior audit findings not
resolved.
Committee documents:
In response, DHS Commissioner Shireen Gandhi provided an update
regarding the audit. Senate_HHS_BHA_grant_OLA_audit_slidesFINAL.pdf
The Department has taken action, including:
- streamlining grant management
processes and reducing the potential of conflicts of interest, fraud,
waste, and abuse in the grant making process through the development of
standardized business processes and clear roles and responsibilities;
- increasing and improving
oversight and supervision of grant managers to ensure compliance with all
Office of Grants Management and DHS requirements;
- establishing stronger internal
controls to ensure progress reports are received and reviewed before
payments are issued;
- adding internal controls to
ensure invoices are validated and authorized prior to payment
disbursement; and
- strengthening oversight to verify
that monitoring visits are conducted and appropriately documented, and
that grant closeout reports are completed within the required timeframes.
Member comments:
- Sen. Mark Koran suggested
eliminating the granting process and shift to a procurement process that
has defined service level agreements.
Next, Kristy Graume provided the Department’s Update on
Implemented Program Integrity Measures Senate-HHS_Program_integrity_updates.pdf
Similar to her House presentation, she illustrated actions that
have been taken in response to the CMS Corrective Action Plan:
- Identifying 14 high-risk services
and establishing a program integrity dashboard for the public.
- Auditing autism service
providers, including on-site visits.
- Discontinuing the Housing
Stabilization Services program.
- Establishing a moratorium on
adding new service providers in the 14 high-risk services.
- Enhanced pre-payment review
before fee-for-service payments are made to providers in the 14 high-risk
services.
- Developing plans to review and
revalidate providers in the 14 high-risk services.
- Reorganizing DHS to increase
program integrity.
SF3402
(Utke) modifies the definition of “medical consultant” in Chapter 145A
(Community Health Boards) by expanding the list of professionals who may act as
medical consultants for community health boards. In current law, “medical
consultant” is limited to physicians licensed to practice medicine in
Minnesota. SF3402 expands the licensed professionals eligible to doctors of
osteopathic medicine, physician assistants, and advanced practice registered
nurses certified to practice as a clinical nurse specialist or nurse
practitioner.
- Samantha Lo, Pine County Public
Health Director, testified on behalf of the LPHA.
- Chair Wicklund indicated that she
had heard from her local public health department, who illustrated
workforce issues under the current definition. This expansion is a good
way to support our public health agencies.
A verbal amendment was added that makes the proposal effective the
day after final enactment. The bill
passed and was referred to the Senate floor.
Thursday House Human Services: The committee spent time on bills that
are part of the House DFL position on fraud prevention that was announced
earlier in the week.
- HF3423DE1.pdf
(Hicks) makes changes to the provider enrollment processes and
requirements and incorporates parts of federal regulations into state
statutes. It also recodifies section 256B.04, subdivision 21, the
subdivision of state statutes that currently governs MA provider
enrollment, into several new sections of statute, and directs DHS to amend
a rule to correct a citation to federal law. House
Research Summary The bill was laid over for possible inclusion in
the committee’s omnibus bill.
- HF2354 (Norris) The revised
Medical Assistance Protection (MAP) Act is bipartisan legislation that
will expand the Attorney General’s Office’s ability to investigate fraud
in Minnesota's Medical Assistance program, give the office new tools to
hold fraudsters accountable, and increase penalties for those found guilty
of stealing money meant for low-income Minnesotans’ healthcare. MAP
Act Handout 2026.pdf
An H2354A5.pdf
amendment was added that expands the definition of what constitutes MA fraud,
increases the penalties, adds 18 lawyers to the AG’s office, which will allow
for drawing down federal funds, and expands the AG’s subpoena power. Would
allocate an additional $1.23 million in FY27 to the office for this purpose.
The bill passed as amended and was referred to Judiciary.
- HF3634 (Noor) expands the list of
services required to use electronic visit verification (EVV). The federal
21st Century Cures Act (Pub. Law 114-255) requires EVV for certain home
care providers to document that people are receiving the services being
billed to Medicaid. The EVV system verifies the type of service performed,
who received the service, the date of the service, the location of the
service, who provided the service, and when the service begins and ends.
Providers have the option of using either the state-provided EVV system or
an alternative system of their choosing that meets state requirements.
Minnesota began implementing EVV in 2022.
Concerns were raised by representatives from Touchstone Mental
Health and Accessible Space, Inc. Issues with broadband in Greater Minnesota
remain an issue as it relates to technology. They urged the committee to work
with providers and counties as this proposal moves forward. Co-Chair Noor
agreed that further work is needed.
The bill was laid over for possible inclusion in the committee’s
omnibus bill.
Bill Introductions of Interest:
- SF3734
(Boldon) Intensive residential treatment services and intensive
nonresidential rehabilitative mental health services requirements
modification
- SF3757
(Hoffman)/HF3800
(Hicks) Individual authorized budget reduction limit on reductions
resulting from implementation of waiver reimagine phase II establishment
- SF3849
(Koran) Certain investigations disclosure and withholding of payments
within 30 days of a request requirement provision
- SF3861
(Mohamed)/HF3634
(Noor) List of services subject to electronic visit verification expansion
- SF3920
(Coleman) Definition of active efforts in the Minnesota African American
Family Preservation and Child Welfare Disproportionality Act modification
- SF3952
(Utke) SNAP income and asset requirements modification
- SF3970
(Port) Eligibility requirements for foster care benefits after age 18 to
include children for whom permanent legal and physical custody is
transferred to a relative after age ten modification
- HF3603
(Olson) Commissioner of children, youth, and families directed to request
a federal waiver to prohibit the purchase of certain items with SNAP
benefits.
- HF3616
(Coulter) Individual income tax rates modified, county program aid
increased to offset county costs associated with federal Supplemental
Nutrition Assistance Program changes, school district revenue
adjusted, commissioner required to estimate costs, and money appropriated.
- HF3665
(Pinto) Out-of-home placement plan requirements modified to include early
childhood education and child care programs, and agencies and guardians ad
litem required to provide information on early childhood education and
child care programs for children in foster care.
- HF3666
(Fischer) Home and community-based services case management modified,
waiver case management quality working group established, and reports
required.
- HF3763
(Nadeau) Community engagement requirements for the medical assistance
program established.
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