A massive and truncated provider revalidation effort within Minnesota’s Medicaid program has led to many providers being terminated from the program. Minnesota could be a bellwether for other states that face revalidation efforts signaled by the federal government.
Local providers and advocates estimate that the state has terminated thousands of otherwise compliant organizations that are recognized by the state for offering services in 14 high-risk areas of care. This development sets a grim expectation for a potential revalidation effort across all other states, as hinted at by federal leaders. It could also be a dire blow to behavioral health providers who have a lot of their cash flow tied up in Medicaid.
Some providers are being terminated from the program over alleged failures identified during a random site visit. The CEO of one multimodal addiction treatment provider in the state said site visit contractors did not appear to follow a standardized process, nor was the visit process explained to providers beforehand.
“Each one was like a fire drill, and what appears to be true is that they were just finding reasons to say, ‘Not valid,’” the addiction treatment CEO told BHB, who spoke on conditions of not being named for fear of retribution from the state.
Several providers told BHB that they were not given direction on what the site visit would entail and that the reviewers that conducted the site visit were enlisted from other parts of the state government or were contractors with little training.
According to local media reports, these are common experiences for providers in the revalidation process that are not behavioral health providers.
Providers who are terminated have the ability to appeal. However, termination from the program cuts providers off from claims processing, leaving them unable to get paid for services provided to Medicaid recipients. Providers are allowed to continue seeing patients during the appeals process.
For this provider, the termination is especially noxious. While the provider is enrolled in Medicaid and some of its locations could bill for certified peer support services, the company has never done so because of the ambiguity on when billing for services is appropriate. It has provided peer support to Medicaid patients without ever seeking to collect claims for that service.
“They’re going to clean it up in the appeal process, but understand that the invalidation stops payments,” the CEO said. We obviously want to fight fraud with everybody else, but if the process doesn’t work and we don’t get paid, we have big troubles in that way.”
The Minnesota Department of Human Services said that it set out in October 2025 to revalidate 5,583 providers who were enrolled in Medicaid that offered services that were in the 14 previously identified high-risk areas. Some of these include early intensive developmental and behavioral intervention (EIDBI, an autism therapy service), certified peer support services, housing stabilization, as well as, several services for adults with disabilities.
As of May 27, only 18% of provider applications had been designated as approved, while 61% were in some form of pending status. The remaining 21% had been disenrolled. The state has not updated that data.
A spokesperson for the Minnesota Department of Human Services told BHB that they are compiling the results of the effort. The corrective action plan approved by the federal government in March to release $243 million in deferred Medicaid funds requires the revalidation effort to be completed by May 1.
“This reminds me of an old saying about a man having a bad day at work and kicking the dog when he gets home. The federal government beat up the state government, the state government beat up DHS and DHS is beating us up,” the CEO said.
In April, U.S. Centers for Medicare & Medicaid Services (CMS) Administrator Dr. Mehmet Oz said the organization would send notice to all state Medicaid agencies asking them to submit a plan for a provider revalidation effort zeroed in on high-risk services on the pain of additional scrutiny by the federal government. The letters sent to the governor’s office and Medicaid programs did not define what areas of care it considered high-risk: “However, CMS expects that your definition includes any provider without a National Provider Identifier,” the letter states.
It is highly likely that autism therapy services will be included in these plans. Several states have been reviewed with the U.S. Department of Health and Human Services’ Office of Inspector General. Generally, the report finds that documentation for a huge portion of claims paid is so poor as to limit their ability to assess the underlying care, let alone justify payment by the state. These reports, while not attesting to fraud in these states, are seen as proof of structural weakness within Medicaid programs, allowing for fraudsters to proliferate.
A years-long international benefits fraud prosecution has revealed massive systemic weakness in Minnesota’s complaint and fraud prevention systems. Autism therapy programs have also been included. Earlier in the month, prosecutors charged two people, alleging they defrauded the EIDBI program of $47 million.
In the meantime, Minnesota providers terminated through the process will have 60 days to submit notice of appeal, according to copies of notices reviewed by BHB. It’s not clear how long it will take for appeals to be heard and adjudicated.
The interruption could be devastating to providers that specialize in supporting Medicaid patients. Medicaid rates generally are known to be low and a challenge for many provider organizations. In 2024, a study commissioned by the state to study Medicaid rates for outpatient behavioral health services recommended increases in rates for most services, in some cases an increase of 100% or more.