Feds block nearly $113 million to Minnesota amid fraud concerns

The Trump administration does not plan to reimburse Minnesota for nearly $113 million the state spent on Medicaid services deemed a fraud risk. It’s the latest in a series of actions the federal government has taken to withhold funds from Minnesota in what state officials argue is a retribution campaign. The Trump administration has launched investigations into fraud in the state’s social services programs and lobbed political attacks at Minnesota leaders over it. Earlier this year the Centers for Medicare & Medicaid Services (CMS) froze $259 million of federal payments to the state over money Minnesota gave last year to providers deemed a high risk for fraud. CMS said Friday it would release about half of those withheld funds. State officials are still waiting to see if hundreds of millions in additional frozen reimbursements announced this year will come through. Advertisement “While we have been bracing for some sort of disallowance, this amount is deeply concerning for the more than 1 million Minnesotans who depend on Medicaid,” Minnesota Department of Human Services Temporary Commissioner John Connolly said in an email to DHS staff Tuesday. Connolly told staff that officials are reviewing the federal letter and plan to request more information before taking next steps. If the state does not challenge CMS’s decision, it will become final. DHS officials said Tuesday they are considering options and would not confirm whether they plan to appeal the disallowance. CMS’s letter to the state said the agency looked at a sample of 330 claims from a timeframe when 6 million claims were filed. Federal officials found 78 of the 330 claims “failed to meet the allowability requirements.”