DHS to pause new HCBS disability licenses Jan. 1, 2026–Dec. 31, 2027; limited exceptions
The Minnesota Department of Human Services will pause accepting and issuing new Home and Community‑Based Services (HCBS/245D) disability license applications from Jan. 1, 2026, through Dec. 31, 2027, may retroactively cancel existing applications, and will bar current providers from adding new services during the moratorium. DHS frames the freeze as a response to fraud investigations and the need for greater oversight after a roughly 283% surge in new applications (with participants up ~25% and active provider licenses up ~55% over five years), while allowing limited exceptions for requests from counties, tribal nations or case managers.
📌 Key Facts
- Minnesota DHS will pause new disability-services licensing (commonly 245D/HCBS categories) from Jan. 1, 2026 through Dec. 31, 2027.
- During the pause DHS will stop accepting new HCBS license applications, stop issuing new licenses, may retroactively cancel existing applications, and existing providers cannot add new services.
- DHS frames the pause as necessary for program integrity and increased oversight and says it is occurring amid active fraud investigations into disability-services providers.
- Most of the services affected are funded under Minnesota’s Medicaid waiver programs.
- Over the past five years DHS says participants rose about 25%, active provider licenses grew about 55%, and new license applications increased 283%, metrics cited to justify the moratorium.
- Limited exceptions may be considered for requests from counties, tribal nations, or case managers.
📊 Relevant Data
Minnesota has the largest Somali population in the United States, with 64,354 Somalis making up 1.12% of the state's total population.
Somali Population by State 2025 — World Population Review
In the first wave of federal charges for fraud in Minnesota's Housing Stabilization Services program, 6 out of 8 defendants have names suggesting Somali origin.
Defendants Charged in First Wave of Housing Stabilization Fraud Cases — U.S. Department of Justice
Fraud in Minnesota's social services programs, including housing assistance, has involved scores of individuals from the Somali diaspora, contributing to schemes that siphoned over $1 billion from federal programs.
Government watchdog says evidence in Minnesota fraud cases 'overwhelming' — News3LV
The Housing Stabilization Services program in Minnesota saw costs escalate from a predicted $2.6 million annually to over $104 million in 2024 and $61 million in the first half of 2025 due to fraud.
Defendants Charged in First Wave of Housing Stabilization Fraud Cases — U.S. Department of Justice
📰 Sources (3)
- Effective window: moratorium begins Jan. 1 and runs through Dec. 31, 2027.
- Scope details: DHS will stop accepting new HCBS license applications, stop issuing new licenses, and may retroactively cancel existing applications; existing providers cannot add new services during the pause.
- Exceptions: limited requests may be considered from counties, tribal nations, or case managers.
- Rationale metrics: over five years, participants rose ~25% while active provider licenses grew ~55% and new license applications rose 283%.
- Most affected services are funded under Minnesota’s Medicaid waiver programs; DHS frames the pause as necessary for program integrity/oversight.
- The pause is explicitly framed as occurring during active fraud investigations into disability-services providers.
- Clarifies that the licensing freeze applies to disability-services licensing (commonly 245D/HCBS categories), not just a general HCBS application surge.