Minnesota’s “Housing Stabilization Services” program receives federal Medicaid dollars with the goal of providing housing for the neediest of the Minnesota population. Anyone who demonstrates a need for assistance with communication, mobility, decision-making, or managing challenging behaviors, along with those experiencing housing instability. This tends to be seniors, people with disabilities, and people with mental illness because they are most likely to be poor. This also sadly tends to be a program that fraudsters don’t ignore.
Minnesota Governor Tim Walz announced this week that his administration had frozen payments to providers for this state housing program after acting U.S. Attorney Joe Thompson said they’re actively investigating it for fraud. The Minnesota Department of Human Services (DHS) confirmed they recently identified 50 Housing Stabilization Services providers with billing anomalies suggestive of fraud and issued stopped payments to 43 of these providers, with seven previously put in place. The governor froze payments to these suspect providers, using a newly enacted law that allows agencies to stop payment for up to 60 days if they suspect fraudulent activity. The governor indicated he would have stopped payments sooner but needed to be sure of the logistics behind the new policy.
Walz was adamant that the program is a valiant one, but that it needs a closer look. “This program is well-intentioned and good,” he said. “But it simply has too many loopholes.” But it looks like any HSS providers plotting to steal from public programs are at the very least temporarily delayed in their fraud due to nonpayment of their schemes. In the meantime, the state needs to close those loopholes with provider integrity software.
Today’s Fraud of The Day is based on article “Minnesota suspends Medicaid payments to 50 providers amid fraud probe” published by KARE 11 News on July 28, 2025.
In a move aimed at curbing taxpayer losses, Minnesota Governor Tim Walz says he has ordered the suspension of Medicaid payments to 50 of the largest providers in the state’s troubled Housing Stabilization Services (HSS) program.
The decision comes on the heels of KARE 11’s months-long “Housing Hustle” investigation that uncovered widespread allegations of fraud in the $100-million-per-year program, which is intended to help elderly and disabled Minnesotans at risk of homelessness find and keep housing. “Payments that were scheduled to go today are not going out,” the Governor said of his action to cut off payments to companies flagged in ongoing investigations. Speaking to reporters at an event Delano, Walz added, “I fully expect some of those folks will sue the state of Minnesota.”
