Minnesota's Medicaid provider crackdown hits small home-care agencies

Minnesota is running one of the country's first large tests of intensified Medicaid provider screening. Under a corrective action plan CMS approved in March, the state Department of Human Services began revalidating every provider in 13 'high-risk' service categories, requiring new applications, fingerprint-based background checks for owners holding a 5% or greater stake, and unannounced site visits. Notices went to about 5,600 providers in late January, with a May 31 deadline to comply or be deactivated. The effort aligns with an April 23 letter from CMS Administrator Mehmet Oz asking every state to submit a two-year revalidation strategy. Separately, a Minneapolis agency, Agape Home Health Services, has pushed its fight over frozen Medicaid reimbursements into federal court, arguing DHS suspended payments over shared ownership with a provider under investigation rather than any finding against Agape itself. Local reporting says the state has sharply increased payment withholds, and that some clients have lost in-home support or been readmitted to hospitals when agencies halted care.