Minnesota freezes new providers in 13 Medicaid programs amid fraud probe
Minnesota’s Department of Human Services has imposed an immediate freeze on new provider enrollment across 13 Medicaid-funded programs it deems at high risk for fraud, saying current clients should keep receiving services while the state and federal government audit billing and tighten oversight. The move, announced Jan. 8, 2026, follows the shutdown of Housing Stabilization Services and CMS’s decision to defer payment on billions in claims, and will slow or block new providers and some service expansions in programs heavily used by Twin Cities residents, including disability, personal care and housing supports.
📌 Key Facts
- DHS froze new provider enrollment (and, for some programs, new service lines by existing providers) in 13 high‑risk Medicaid programs effective Jan. 8, 2026.
- The freeze comes on top of CMS’s deferral of about $3.75 billion annually in federal payments for 14 high‑risk programs and Minnesota’s earlier decision to end Housing Stabilization Services.
- State officials say the action is temporary and aimed at curbing large‑scale fraud while audits and an Optum billing analytics review proceed, but warn it will affect how quickly new providers can serve Medicaid clients in the Minneapolis–Saint Paul metro.
📊 Relevant Data
The Somali-ancestry population in Minnesota numbered over 75,000 in 2024, representing approximately 0.8% of all households, 0.7-0.9% of adults, and 2.5% of children in the state.
Somali Immigrants in Minnesota — Center for Immigration Studies
37.5% of adult Somali immigrants in Minnesota live in poverty, compared to 6.9% of adult natives, a ratio of 5.0 times higher per capita; Somalis account for 3.7% of the state's adult poor despite being 0.7% of adults.
Somali Immigrants in Minnesota — Center for Immigration Studies
52.3% of children in Somali immigrant-headed households in Minnesota live in poverty, compared to 7.6% in native-headed households, a ratio of 5.2 times higher per capita; Somalis represent 12.8% of the state's children in poverty despite being 2.5% of all children.
Somali Immigrants in Minnesota — Center for Immigration Studies
81% of Somali households in Minnesota receive some form of welfare (cash, food stamps, or Medicaid), compared to 21% of native households, a ratio of 3.5 times higher per capita; Somalis are 2.8% of the state's welfare households despite being 0.8% of all households.
Somali Immigrants in Minnesota — Center for Immigration Studies
73% of Somali households in Minnesota receive Medicaid, compared to 18% of native households, a ratio of 3.6 times higher per capita; Somalis are 3.0% of Medicaid cases despite being 0.8% of households.
Somali Immigrants in Minnesota — Center for Immigration Studies
Somalis in Minnesota have been implicated in welfare fraud schemes stealing over $1 billion in children's food aid during the pandemic, with fraud taking root in pockets of the Somali diaspora where individuals set up companies billing for unprovided services.
Somali Immigrants in Minnesota — Center for Immigration Studies
The Somali population in Minnesota grew primarily through refugee resettlement from Somalia's clan wars starting in the 1990s, with agencies deciding initial placements, leading to socioeconomic disparities.
Somali Immigrants in Minnesota — Center for Immigration Studies
Federal prosecutors are investigating three plots involving more than $1 billion in stolen taxpayers' money from Minnesota's social services, with 59 people convicted so far, largely members of the Somali diaspora.
How Fraud Swamped Minnesota’s Social Services System on Tim Walz’s Watch — The New York Times
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