Human services finance bill focused on federal compliance, program integrity

The House Human Services Finance and Policy Committee’s work this session has included prioritizing program integrity to fight fraud, while also updating systems to comply with federal standards.

Its omnibus human services finance bill looks to tackle those things. The committee walked through HF4338, as amended, Wednesday and plans to take action Thursday. Rep. Joe Schomacker (R-Luverne) is the sponsor.

[MORE: Read nonpartisan House Research summary]

John Connolly, deputy commissioner and Medicaid director at the Department of Human Services, highlighted provisions that would:

• codify a definition of fraud in Medicaid statute to clarify the department’s authority;
• require the department to consult with counties and tribal nations to recommend strategies that transform the human services system;
• provide funding for pre- and post-payment review and require managed care organizations to conduct prepayment review and publish information on program integrity actions and outcomes;
• require adults and youth exiting correctional settings to be provided with pre- and post-release case management services; 
• provide funding to comply with federal home and community-based services access rule requirements;
• align the state with federal regulations that prohibit Federal Bureau of Investigation background studies for household members of adult day service and adult foster care providers;
• study waiver case management reimbursement rates and core functions;
• accelerate the implementation of recovery residence standards and access to supportive housing;
• transition unlicensed services to a licensing framework by implementing Mental Health Uniform Service Standards;
• establish billing thresholds for disability, older adult, and behavioral health services;
• expand the use of Electronic Visit Verification  to more high-risk service types; and
• establish a team at the state-level to support counties on addressing MnCHOICES assessment backlogs.

The bill is expected to save $141.3 million in Fiscal Year 2027 and $197 million in following years. Testifiers expressed concern with billing limits for Early Intensive Developmental and Behavioral Intervention and requirements that some providers obtain surety bonds.

Eric Larsson, chair of the Autism Treatment Association of Minnesota, asked legislators to deliberate further on EIDBI billing limits outlined in the bill. “The limits offered today were first presented to us one week ago with no opportunity for public input or scrutiny. They therefore come with a risk of unanticipated repercussions that can both create the risk of fraud and harm.”

[MORE: Read written testimony]

Jay O’Neill, president of the Autism Treatment Association of Minnesota, also expressed concern about the billing limits. “Placing caps on services may prevent some children from ever reaching their full potential,” said Jay O’Neill, president of the Autism Treatment Association of Minnesota. “Providers will be limited in the services they provide and, in many cases, the children needing the most support will not be served and it will cost families untold stress and the state incredible financial costs if proposed caps are implemented.”

Jen Diederich, chief compliance officer at MAC Midwest, is worried the bill could put many providers out of business if they do not have enough capital up front. “Requiring providers to secure additional capital through surety bonds and maintaining 90 days of reserves is not realistic and it’s not attainable for most nonprofits and community-based providers.”

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The following are bills and amendments that have been incorporated in part or in whole into the omnibus human services finance bill:

• HF2354 (Norris)
• HF3423 (Hicks)
• HF3666 (Fischer)
• HF4068 (Noor)
• HF4338 (Schomacker)
• HF4491 (Schomacker)
• HF4525 (Hicks)
• HF4638 (Noor)
• HF4902 (Noor)
• HF4969 (Bierman)