It got lost in the shuffle of a news week that included a federal immigration agent killing Renee Good. But at the start of January, Minnesota Department of Human Services officials rang the alarm that the Trump administration was poised to cut off more than $2 billion over the course of the year in Medicaid funds.
The unprecedented withdrawal was because federal Centers for Medicare and Medicaid Services, or CMS, officials declared that Minnesota had not taken the steps needed to root out fraud in 13 Medicaid programs identified as vulnerable to graft.
The 13 programs under scrutiny run the gamut, including everything from early intervention autism services to nonemergency medical transportation.
Then weeks after that, Mehmet Oz, director of CMS, and Vice-President JD Vance said that they would take away another $243 million from Minnesota Medicaid.
Related: Minnesota nursing homes fed up as they await federal backing of pay hike
But on Thursday, CMS sent a letter to the Department of Human Services indicating a sea change in their plan to claw back Medicaid dollars.
“Minnesota submitted a revised corrective action plan on Jan. 30 that addressed the deficiencies CMS identified to the state on Jan. 12,” wrote Kimberly Brandt, deputy administrator and chief operating office for CMS. “Therefore, the [corrective action plan] is approved.”
Brandt also wrote that Minnesota hit key milestones on Feb. 1 and March 1 to implement the corrective plan.
The CMS official does not come out and write: Don’t worry, we’re exiting the business of not paying Minnesota Medicaid money that Congress appropriated.
But Brandt comes close, urging an administrative appeal filed by Minnesota officials to be stayed, because it would be rendered “moot” if the corrective plan continues to be executed.
(Multiple messages left with CMS were not returned by Monday afternoon.)
That administrative appeal concerns the $2 billion.
The $243 million withholding, meanwhile, is tied up in federal court. But Oz said at a press conference three weeks ago that if Minnesota implements this corrective plan they should see this money.
What is this corrective plan that seems to hold the secret of Minnesota’s Medicaid program restabilizing?
Related: Minnesota Medicaid explained: Who’s on it, how much it costs, what could change
The state Department of Human Services has pulled 168 workers from other departments across state agencies to perform “revalidation” of what it says are no less than 5,800 providers who bill Medicaid. The process includes checking their licenses and doing on-site inspections.
The feds want the Department of Human Services to complete this work by May 31.
Should the corrective plan hold, state budget worries expressed by Gov. Tim Walz and legislative DFLers could also be mitigated. Despite a state budget surplus, DFLers have said it is hard to introduce new spending with federal funds up in the air.
The Trump administration is still sparing with Minnesota regarding child care assistance and Supplemental Nutrition Assistance Program payments.
