Disenrollment And Payment Suspension To Minnesota Health Care Providers MHCPs)...

 

There was a recent massive disenrollment of Minnesota Health Care providers (MHCPs).  By definition these are health care providers Medicaid (Medical Assistance, or MA) and MinnesotaCare.  Each one of these providers has a portal to the state that enables direct payment for services.  The Minnesota Department of Human Services (DHS) has disenrolled 3,411 out of nearly 5,600 reviewed "high-risk" Medicaid providers. These providers have had their Minnesota Health Care Programs (MHCP) payments immediately cut off. Disenrolled entities have 60 days to appeal their removal (1).  Unless they have a successful appeal they can no longer bill Medicaid.

Minnesota identifies “high risk providers” as belonging to the following 14 categories (2):

1. Early Intensive Developmental and Behavioral Intervention (EIDBI): Autism therapy and developmental services for children.
2. Adult Companion Services: Non-medical care, socialization, and supervision for adults.
3. Adult Day Services: Structured community-based programs offering health and social services.
4. Adult Rehabilitative Mental Health Services (ARMHS): Mental health services focused on instructing and supporting independent living skills.
5. Assertive Community Treatment (ACT): Intensive, comprehensive community-based outreach and treatment for severe mental illness.
6. Community First Services and Supports (CFSS): Assistance with activities of daily living and health-related tasks.
7. Individualized Home Supports (IHS): Support provided in a person’s own home or community to build independent living skills.
8. Integrated Community Supports (ICS): Multi-tenant housing support services for individuals with disabilities.
9. Intensive Residential Treatment Services (IRTS): Time-limited, 24/7 mental health treatment in a residential setting.
10. Night Supervision Services: Overnight monitoring and assistance in a person's home.
11. Nonemergency Medical Transportation Services (NEMT): Transportation for medical appointments and services.
12. Peer Recovery Support Services: Substance use disorder support provided by individuals with lived recovery experience.
13. Recuperative Care: Medical care and support for individuals experiencing homelessness who are too ill to live on the street.
14. Housing Stabilization Services:  Consult and develop a housing plan for individuals without a case manager and support transition and stabilization in that setting.

 

  As a former acute care and inpatient psychiatrist at least 4 of these services (3,4,5, and 9) were critical in discharge planning for hospitalized patients.  That could mean the difference between a timely discharge and either no discharge or a suboptimal plan.  These resources are clearly in place for assisting disabled population with few resources.  The Trump administration has already prioritized tax cuts for the wealthy over health care for the disabled and low-income adults most notably by cutting an estimated $1 trillion in Medicaid spending over the next 10 years. Much of those cuts are backloaded into the last 5 years of the bill.  As estimated 10 million people will lose healthcare coverage.  

The threatened cuts to Minnesota apparently occurred on the basis that the Trump administration Centers for Medicare and Medicaid Services (CMS) demanded the state implement a corrective action plan and they threatened to withhold up to $2 billion in Medicaid funding and froze over $200 million in payments. There are clear problems with that idea at the both the local and federal levels. 

The first problem is the determination of waste, fraud, and abuse in Minnesota.  How is it measured and are there any problems with the metrics?   CMS does keep ongoing records for Improper Payment Rates by year.  From the CMS page for the 2025 report just released:

“The Medicaid estimated improper average payment rate (comprised of the past three cycles of approximately 17 states per cycle from reviews in 2023, 2024, and 2025) was 6.12%, or $37.39 billion, compared to the FY 2024 reported rate of 5.09%, or $31.10 billion. Of the FY 2025 Medicaid improper payments, 77.17% were the result of insufficient documentation, which is generally not indicative of fraud or abuse.”

The improper payment rates for Medicaid/CHIPS in Minnesota was 2.2% in both 2022 and 2025 – the most recent years surveyed.  That compares to a nationwide average improper payment rate of 15.62% and 6.12% respectively.  It is also below a national threshold established in H.R. 1 of 3% for financial penalties that will apply to all states starting in 2030.  The author of this article (dated January 30, 2026) clearly states that this indicates the action against Minnesota is partisan (1).

All of this occurs in the context of unprecedented personal and political attacks by President Trump and his cabinet.  Waste, fraud, and abuse is one of their common attacks.  It was the basis for the initial DOGE purges of 300,000 federal employees, that saved no money, eliminated considerable expertise and institutional knowledge and impacted the safety of the American people to the point that 25,000 had to be called back immediately.  The firings include 40,000 VA employees including 3,000 nurses and 1,000 physicians.  Part of those firings included 17 Inspector Generals whose job it is to determine waste, fraud, and abuse.  A subsequent report showed that the effects of the Inspectors General on waste, fraud, and abuse dwarfed the impact of DOGE. It is remarkable that the main selling points of DOGE were gross exaggerations of waste, fraud, and abuse. The goal of 1-2 trillion in savings was unrealistic from the outset.  At one point the White House spokesperson and Elon Musk both claimed that $2.7 trillion in Medicaid and Medicare benefits had been diverted to foreign nationals overseas.  In actual fact this was an estimate of improper payments by numerous government agencies since 2003. 

Apart from the lack of government savings and efficiency, destruction of government infrastructure, and destruction of federal employee morale – there has been a massive human cost that is hardly mentioned in the United States. Defunding USAID and PEPFAR will result in an estimated 500,000 to 1,000,000 deaths annually, 4.2 million deaths due to AIDS, and as many as 14.1 million deaths by 2030.  The excess mortality will primarily be from AIDS, malaria, tuberculosis, nutritional deficiencies, and diarrheal diseases (4).  

To be clear, fraud is always occurring at some level whether it is government programs or internet schemes designed to steal money from citizens. There are no fraud free zones in the United States and the protections for private citizens are minimal. Medicaid Fraud Control Units under the Inspector General are charged with investigating fraud and recovering money if possible.  Since Medicaid is a joint federal and state program each state also has an Inspector General or Medicaid Fraud Control Unit (MFCU).

It should be clear to any objective observer that rage and faux rage are all part of the Trump and MAGA ethos.  It is more commonly referred to as bullying and intimidation directed at anyone Trump dislikes.  Waste, fraud, and abuse is their war cry despite the fact that Trump has granted clemency to persons who have been convicted of fraud and in many cases ordered to pay penalties and restitution for a total of $2 billion. That is $2 billion just excused by an administration who claims to be concerned with fraud.

That is what is really going on in Minnesota.  It is the only explanation for the great precipitous disenrollment of MHCP providers and Vance’s latest demand to investigate the Governor and Attorney General for “fraud”.  This pattern will continue until this contentious government is either voted out or shut down by Congress or the Judicial branch.      

 

George Dawson, MD, DFAPA

 

References:

1:  Schneider A.  CMS Quietly Releases Medicaid State Improper Payment Rates for 2025: How Did Minnesota Do?.  January 30, 2026  https://ccf.georgetown.edu/2026/01/30/cms-quietly-releases-medicaid-state-improper-payment-rates-for-2025-how-did-minnesota-do/

2:  Clemency Grants by President Donald J. Trump (2025-Present).  Office of the Pardon Attorney:  https://www.justice.gov/pardon/clemency-grants-president-donald-j-trump-2025-present

3:  Minnesota Litigation Tracker (Attorney General Web Site).  Minnesota is currently or was a party in 61 lawsuits against the federal government. https://www.ag.state.mn.us/Rule-Of-Law/Litigation/

4:  Cavalcanti D, de Oliveira Ferreira de Sales L, da Silva A et al.  Evaluating the impact of two decades of USAID interventions and projecting the effects of defunding on mortality up to 2030: a retrospective impact evaluation and forecasting analysis.  The Lancet, 2025; 406, 283-29  https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(25)01186-9/fulltext

 

 

 

Supplementary 1:  Lawsuits between states and the federal government under each administration

Presidential Administration	Total Multistate Lawsuits Filed by States
Ronald Reagan (1981–1989)	15 lawsuits
George H.W. Bush (1989–1993)	8 lawsuits
Bill Clinton (1993–2001)	18 lawsuits
George W. Bush (2001–2009)	76 lawsuits
Barack Obama (2009–2017)	78 lawsuits
Donald Trump (First Term) (2017–2021)	138 lawsuits
Joe Biden (2021–2025)	Approximately 100 lawsuits
Donald Trump (Second Term) (2025–Present)	100 in the first 18 months

 

Supplementary 2:  I received the following notice by email today from the Minnesota Department of Human Services.  My interpretation of it is that they are seeking to provide relief to providers by lifting the payment suspension based on an appeal.  This is obviously one small part of a massive and unnecessary drama initiated by the Trump administration.