The Minnesota Department of Human Services has issued a two-year moratorium on licensing for Home and Community-Based Services, a Medicaid program that helps people with disabilities receive care in their home or a community, such as group homes, instead of in nursing homes or hospitals.
DHS will stop issuing new licenses and cancel existing applications starting in January, according to a letter from the agency’s Temporary Commissioner Shireen Gandhi to lawmakers dated Monday. The Legislature passed a law this year allowing DHS to pause licensing if it finds that new applications are growing beyond program needs.
There are currently 2,549 active licenses and 2,314 pending applications as of mid-November, according to the letter. Compared to 2015-2019, the past five years have seen an increase in disability waiver recipients, i.e., people who need services, of 25%, much smaller than the 55% increase in the average annual number of licenses and 283% increase in new applications for licenses. Gandhi said DHS compared the growth in provider licenses to the growth in people seeking services to conclude that it should no longer accept new applications.
Still, providers warned that the decision will harm the disability community. A statement from the Association of Residential Resources in Minnesota, which represents disability service providers, said they were only notified Tuesday, and that the “sweeping, system-altering policy” decision was made “in complete secrecy.”
Josh Berg, a service director at Accessible Space, an assisted independent living provider, said that the decision to stop licensing new providers is “a really clear example of [DHS] saying that they don’t have things under control.”
ARRM, in the statement, said that home and community care providers have been blindsided by DHS twice in just over a month now: Once when the governor’s office and DHS released an audit program with a press release that left providers confused and panicked, and again with the licensing moratorium this week.
DHS appears to be tightening controls in the same programs. For example, the moratorium will affect Integrated Community Supports, a program that DHS has already been pausing payments for and investigating.
Fraud in Minnesota’s human services has become a high-profile political issue, recently drawing attention from President Donald Trump after the publication of an article claiming — with little evidence — that Somali-American immigrants accused of defrauding Minnesota’s public programs are sending the money to the terrorist group al-Shaabab. Trump’s administration is now planning to launch an “intensive immigration enforcement operation” targeting the Somali-American community in Minnesota.
Following federal charges against dozens of people alleging they defrauded a child nutrition program, an autism treatment program and Housing Stabilization Services, DHS moved to address fraud in other services, turning its attention to ICS starting in September and13 other programs starting in December.
Berg said that he understands why DHS would pause licensing for programs they “can’t oversee effectively,” but was upset at the decision to retroactively cancel existing applications.
“There’s gonna be some providers that have bought properties that have been teeing up to be able to start services once they get their license approved that are now stuck,” Berg said.
