Minnesota ends Housing Stabilization Services after fraud; $100M paid to 700+ providers last year
Minnesota is ending its Medicaid-funded Housing Stabilization Services program effective Oct. 31 amid FBI probes and fraud allegations, with CMS approving the termination; Temporary DHS Commissioner Shireen Gandhi said the agency is working to connect participants to other services and is coordinating with counties, tribes and managed care organizations to redirect those affected. The program paid more than $100 million last year to over 700 providers — far above the original $2.6 million estimate — prompting DHS to say it "cannot afford to wait" and to pledge a redesign with the Legislature, providers, community partners and federal officials, even as tribal leaders called the cancellation an overreaction and Gov. Tim Walz ordered a third‑party audit of 14 high‑risk Medicaid services, including HSS.
đź“Ś Key Facts
- Minnesota ended its Housing Stabilization Services (HSS) program effective Oct. 31, 2025; the termination was formally announced after FBI probes into widespread fraud and was approved by the Centers for Medicare & Medicaid Services (CMS).
- More than 700 providers received over $100 million in HSS Medicaid payments last year — far exceeding the program’s initial $2.6 million first‑year estimate.
- DHS says it is coordinating with counties, tribes and managed care organizations to redirect impacted participants and connect them to other services; Temporary Human Services Commissioner Shireen Gandhi provided an on‑record statement about the termination and outreach efforts.
- DHS officials said alternatives were considered but they 'cannot afford to wait,' and the agency will work with the Legislature, providers, community partners and federal officials to redesign HSS with stronger integrity and service‑quality controls; no timeline was provided.
- Gov. Tim Walz has ordered a third‑party audit of 14 high‑risk Medicaid services, including HSS, and the termination comes amid broader investigations and calls from legislators and auditors for stronger controls.
- The Minnesota Tribal Collaborative criticized the cancellation as an overreaction and urged the state to adopt safeguards and provider training rather than terminate the program.
đź“° Sources (3)
- Confirms HSS formally ended Friday following FBI probes into widespread fraud.
- Scope and cost: more than 700 providers received over $100 million in HSS Medicaid payments last year, far above the initial $2.6 million first‑year estimate.
- DHS says it considered alternatives but 'cannot afford to wait,' and will work with the Legislature, providers, community partners and federal officials to redesign HSS with stronger integrity and service-quality controls; no timeline provided.
- Reaction from the Minnesota Tribal Collaborative in the Twin Cities calling the cancellation an overreaction and urging safeguards/training instead of termination.
- Reiterates that Gov. Tim Walz ordered a third‑party audit of 14 high‑risk Medicaid services, including HSS.
- Official on-record quote from Temporary Human Services Commissioner Shireen Gandhi on the termination and efforts to connect participants to other services.
- DHS says it is coordinating not only with counties and tribes but also with managed care organizations to redirect impacted participants.
- FOX 9 reiterates CMS approval for the termination and situates the decision alongside ongoing fraud investigations and a legislative-auditor push for stronger controls.