Feds Approve Minnesota Medicaid Fix, Opening Door to Release of $243 Million

Overview

• CMS told Minnesota it has approved the state's corrective action plan and expects a revalidation of high‑risk providers by the end of May, though the timing for releasing the $243 million in deferred payments remains unclear.
• The agency said it will ask to pause Minnesota's lawsuit over the funding freeze, and state attorneys sought clarification from the court on when funds might resume.
• The approval follows earlier federal actions that deferred prior payments and threatened withholding more than $2 billion in future Medicaid funds, which Minnesota is appealing.
• At a March 17 House hearing, CMS cited Minnesota data showing adult companion service providers up more than 131% and payments up 234% over a period when beneficiaries rose about 24%.
• A March 19 report by the Minnesota Office of the Legislative Auditor said DHS wrongly believed it lacked authority to investigate kickbacks and noted EIDBI spending jumped from $38.1 million in 2020 to $324.9 million in 2024, as CMS signals similar scrutiny for other states including California, Florida, Maine, and New York.