HF 4651

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This Document can be made available
in alternative formats upon request  State of Minnesota
  HOUSE OF REPRESENTATIVES
  NINETY-FOURTH SESSION
  H. F. No.     4651
03/25/2026     Authored by Momanyi-Hiltsley
  The bill was read for the first time and referred to the Committee on Human Services Finance and Policy
1.1A bill for an act
1.2relating to human services; modifying program integrity requirements for the
1.3medical assistance program; directing the commissioner of human services to
1.4create a medical assistance program integrity advisory board; directing the
1.5commissioner of human services to make recommendations on provider enrollment
1.6standards, modernizing program integrity infrastructure, and program integrity
1.7interventions; directing the commissioner of human services to conduct audits;
1.8requiring reports; appropriating money; amending Minnesota Statutes 2024, sections
1.9245.095, by adding a subdivision; 256B.064, subdivisions 1b, 1d, 2, 3, 4, 5, by
1.10adding subdivisions; Minnesota Statutes 2025 Supplement, sections 15.013, by
1.11adding a subdivision; 256B.064, subdivision 1a.
1.12BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.13Section 1. Minnesota Statutes 2025 Supplement, section 15.013, is amended by adding a
1.14subdivision to read:
1.15Subd. 7. Exemption. This section does not apply to the medical assistance program
1.16administered by the commissioner of human services.
1.17EFFECTIVE DATE. This section is effective the day following final enactment.
1.18Sec. 2. Minnesota Statutes 2024, section 245.095, is amended by adding a subdivision to
1.19read:
1.20Subd. 7. Exemption. Subdivision 5 does not apply to any individual or entity that receives
1.21payments from medical assistance or provides goods or services for which payment is made
1.22from medical assistance.
1.23EFFECTIVE DATE. This section is effective the day following final enactment.
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2.1    Sec. 3. Minnesota Statutes 2025 Supplement, section 256B.064, subdivision 1a, is amended
2.2  to read:
2.3      Subd. 1a. Grounds for sanctions. (a) The commissioner may impose sanctions against
2.4  any individual or entity that receives payments from medical assistance or provides goods
2.5  or services for which payment is made from medical assistance for any of the following:
2.6      (1) fraud, theft, or abuse in connection with the provision of goods and services to
2.7  recipients of public assistance for which payment is made from medical assistance;
2.8      (2) a pattern of presentment of false or duplicate claims or claims for services not
2.9  medically necessary;
2.10     (3) a pattern of making false statements of material facts for the purpose of obtaining
2.11 greater compensation than that to which the individual or entity is legally entitled;
2.12     (4) suspension or termination as a Medicare vendor;
2.13     (5) refusal to grant the state agency access during regular business hours to examine all
2.14 records necessary to disclose the extent of services provided to program recipients and
2.15 appropriateness of claims for payment;
2.16     (6) failure to repay an overpayment or a fine finally established under this section;
2.17     (7) failure to correct errors in the maintenance of health service or financial records for
2.18 which a fine was imposed or after issuance of a warning by the commissioner; and
2.19     (8) any reason for which an individual or entity could be excluded from participation in
2.20 the Medicare program under section 1128, 1128A, or 1866(b)(2) of the Social Security Act.
2.21     (b) For the purposes of this section, goods or services for which payment is made from
2.22 medical assistance includes but is not limited to care and services identified in section
2.23 256B.0625 or provided pursuant to any federally approved waiver.
2.24     (c) Regardless of the source of payment or other item of value, the commissioner may
2.25 impose sanctions against any individual or entity that solicits, receives, pays, or offers to
2.26 pay any illegal remuneration as described in section 142E.51, subdivision 6a, in violation
2.27 of section 609.542, subdivision 2, or in violation of United States Code, title 42, section
2.28 1320a-7b(b)(1) or (2). No conviction is required before the commissioner can impose
2.29 sanctions under this paragraph.
2.30     (d) The commissioner may impose sanctions against a pharmacy provider for failure to
2.31 respond to a cost of dispensing survey under section 256B.0625, subdivision 13e, paragraph
2.32 (g).
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3.1      (e) The commissioner may impose sanctions against a pharmacy provider for failure to
3.2  respond to a Minnesota drug acquisition cost survey under section 256B.0625, subdivision
3.3  13e, paragraph (i).
3.4      (f) For the purposes of this section, "abuse" means the activities listed in paragraph (a),
3.5  clauses (2), (3), and (7), but does not include billing errors that result in unintended
3.6  overcharges.
3.7    Sec. 4. Minnesota Statutes 2024, section 256B.064, subdivision 1b, is amended to read:
3.8      Subd. 1b. Sanctions available. (a) The commissioner may impose the following sanctions
3.9  for the conduct described in subdivision 1a: suspension or withholding of suspending
3.10 payments to an individual or entity and; withholding payments to an individual or entity;
3.11 suspending or terminating participation in the program,; terminating participation in the
3.12 program; or imposition of imposing a fine under subdivision 2, paragraph (g) 2a.
3.13     (b) When imposing sanctions under this section subdivision, the commissioner shall
3.14 must consider the nature, chronicity, or severity of the conduct and the effect of the conduct
3.15 on the health and safety of persons served by the individual or entity.
3.16     (c) The commissioner shall must suspend an individual's or entity's participation in the
3.17 program for a minimum of five years if the individual or entity is convicted of a crime,
3.18 received a stay of adjudication, or entered a court-ordered diversion program for an offense
3.19 related to a provision of a health service under medical assistance, including a federally
3.20 approved waiver, or health care fraud.
3.21     (d) Regardless of imposition of sanctions, the commissioner may make a referral to the
3.22 appropriate state licensing board.
3.23     EFFECTIVE DATE. This section is effective the day following final enactment.
3.24   Sec. 5. Minnesota Statutes 2024, section 256B.064, subdivision 1d, is amended to read:
3.25     Subd. 1d. Investigative costs. (a) The commissioner may seek recovery of investigative
3.26 costs from any individual or entity that willfully submits a claim for reimbursement for
3.27 services that the individual or entity knows, or reasonably should have known, is a false
3.28 representation and that results in the payment of public funds for which the individual or
3.29 entity is ineligible.
3.30     (b) Billing errors that result in unintentional overcharges shall are not be grounds for
3.31 investigative cost recoupment.
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4.1      EFFECTIVE DATE. This section is effective the day following final enactment.
4.2    Sec. 6. Minnesota Statutes 2024, section 256B.064, subdivision 2, is amended to read:
4.3      Subd. 2. Imposition of monetary recovery and sanctions; generally. (a) The
4.4  commissioner shall must determine any monetary amounts to be recovered and sanctions
4.5  to be imposed upon an individual or entity under this section. Except as provided in
4.6  paragraphs (b) and (d), neither subdivisions 2b to 2d, the commissioner must not obtain a
4.7  monetary recovery nor or impose a sanction will be imposed by the commissioner without
4.8  prior notice and an opportunity for a hearing, according to chapter 14, on the commissioner's
4.9  proposed action, provided that the commissioner may suspend or reduce payment to an
4.10 individual or entity, except a nursing home or convalescent care facility, after notice and
4.11 prior to the hearing if in the commissioner's opinion that action is necessary to protect the
4.12 public welfare and the interests of the program.
4.13     (b) Except when the commissioner finds good cause not to suspend payments under
4.14 Code of Federal Regulations, title 42, section 455.23(e) or (f), the commissioner shall
4.15 withhold or reduce payments to an individual or entity without providing advance notice
4.16 of such withholding or reduction if either of the following occurs:
4.17     (1) the individual or entity is convicted of a crime involving the conduct described in
4.18 subdivision 1a; or
4.19     (2) the commissioner determines there is a credible allegation of fraud for which an
4.20 investigation is pending under the program. Allegations are considered credible when they
4.21 have an indicium of reliability and the state agency has reviewed all allegations, facts, and
4.22 evidence carefully and acts judiciously on a case-by-case basis. A credible allegation of
4.23 fraud is an allegation which has been verified by the state, from any source, including but
4.24 not limited to:
4.25     (i) fraud hotline complaints;
4.26     (ii) claims data mining; and
4.27     (iii) patterns identified through provider audits, civil false claims cases, and law
4.28 enforcement investigations.
4.29     (c) The commissioner must send notice of the withholding or reduction of payments
4.30 under paragraph (b) within five days of taking such action unless requested in writing by a
4.31 law enforcement agency to temporarily withhold the notice. The notice must:
4.32     (1) state that payments are being withheld according to paragraph (b);
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5.1      (2) set forth the general allegations as to the nature of the withholding action, but need
5.2  not disclose any specific information concerning an ongoing investigation;
5.3      (3) except in the case of a conviction for conduct described in subdivision 1a, state that
5.4  the withholding is for a temporary period and cite the circumstances under which withholding
5.5  will be terminated;
5.6      (4) identify the types of claims to which the withholding applies; and
5.7      (5) inform the individual or entity of the right to submit written evidence for consideration
5.8  by the commissioner.
5.9      (d) The withholding or reduction of payments will not continue after the commissioner
5.10 determines there is insufficient evidence of fraud by the individual or entity, or after legal
5.11 proceedings relating to the alleged fraud are completed, unless the commissioner has sent
5.12 notice of intention to impose monetary recovery or sanctions under paragraph (a). Upon
5.13 conviction for a crime related to the provision, management, or administration of a health
5.14 service under medical assistance, a payment held pursuant to this section by the commissioner
5.15 or a managed care organization that contracts with the commissioner under section 256B.035
5.16 is forfeited to the commissioner or managed care organization, regardless of the amount
5.17 charged in the criminal complaint or the amount of criminal restitution ordered.
5.18     (e) The commissioner shall suspend or terminate an individual's or entity's participation
5.19 in the program without providing advance notice and an opportunity for a hearing when the
5.20 suspension or termination is required because of the individual's or entity's exclusion from
5.21 participation in Medicare. Within five days of taking such action, the commissioner must
5.22 send notice of the suspension or termination. The notice must:
5.23     (1) state that suspension or termination is the result of the individual's or entity's exclusion
5.24 from Medicare;
5.25     (2) identify the effective date of the suspension or termination; and
5.26     (3) inform the individual or entity of the need to be reinstated to Medicare before
5.27 reapplying for participation in the program.
5.28     (f) (b) Upon receipt of a notice under paragraph (a) or subdivision 2c or 2d that a
5.29 monetary recovery or sanction is to be or has been imposed, an individual or entity may
5.30 request a contested case, as defined in section 14.02, subdivision 3, by filing with the
5.31 commissioner a written request of appeal. The appeal request must be received by the
5.32 commissioner no later than 30 days after the date the notification of monetary recovery or
5.33 sanction was mailed to the individual or entity. The appeal request must specify:
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6.1      (1) each disputed item, the reason for the dispute, and an estimate of the dollar amount
6.2  involved for each disputed item;
6.3      (2) the computation that the individual or entity believes is correct;
6.4      (3) the authority in statute or rule upon which the individual or entity relies for each
6.5  disputed item;
6.6      (4) the name and address of the person or entity with whom contacts may be made
6.7  regarding the appeal; and
6.8      (5) other information required by the commissioner.
6.9      (g) The commissioner may order an individual or entity to forfeit a fine for failure to
6.10 fully document services according to standards in this chapter and Minnesota Rules, chapter
6.11 9505. The commissioner may assess fines if specific required components of documentation
6.12 are missing. The fine for incomplete documentation shall equal 20 percent of the amount
6.13 paid on the claims for reimbursement submitted by the individual or entity, or up to $5,000,
6.14 whichever is less. If the commissioner determines that an individual or entity repeatedly
6.15 violated this chapter, chapter 254B or 245G, or Minnesota Rules, chapter 9505, related to
6.16 the provision of services to program recipients and the submission of claims for payment,
6.17 the commissioner may order an individual or entity to forfeit a fine based on the nature,
6.18 severity, and chronicity of the violations, in an amount of up to $5,000 or 20 percent of the
6.19 value of the claims, whichever is greater.
6.20     (h) The individual or entity shall pay the fine assessed on or before the payment date
6.21 specified. If the individual or entity fails to pay the fine, the commissioner may withhold
6.22 or reduce payments and recover the amount of the fine. A timely appeal shall stay payment
6.23 of the fine until the commissioner issues a final order.
6.24     EFFECTIVE DATE. This section is effective the day following final enactment.
6.25   Sec. 7. Minnesota Statutes 2024, section 256B.064, is amended by adding a subdivision
6.26 to read:
6.27     Subd. 2a. Imposition of fines. (a) The commissioner may order an individual or entity
6.28 to forfeit a fine for failure to fully document services according to standards in this chapter
6.29 and Minnesota Rules, chapter 9505. The commissioner may assess fines if specific required
6.30 components of documentation are missing. The fine for incomplete documentation equals
6.31 20 percent of the amount paid on the claims for reimbursement submitted by the individual
6.32 or entity, or up to $5,000, whichever is less. If the commissioner determines that an individual
6.33 or entity repeatedly violated this chapter, chapter 245G or 254B, or Minnesota Rules, chapter
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7.1  9505, related to the provision of services to program recipients and the submission of claims
7.2  for payment, the commissioner may order an individual or entity to forfeit a fine based on
7.3  the nature, severity, and chronicity of the violations, in an amount of up to $5,000 or 20
7.4  percent of the value of the claims, whichever is greater.
7.5      (b) The individual or entity must pay the fine assessed on or before the payment date
7.6  specified by the commissioner. If the individual or entity fails to pay the fine, the
7.7  commissioner may withhold or reduce payments and recover the amount of the fine. A
7.8  timely appeal stays payment of the fine until the commissioner issues a final order.
7.9      EFFECTIVE DATE. This section is effective the day following final enactment.
7.10   Sec. 8. Minnesota Statutes 2024, section 256B.064, is amended by adding a subdivision
7.11 to read:
7.12     Subd. 2b. Mandatory suspension or termination after exclusion from participation
7.13 in Medicare. (a) The commissioner must suspend or terminate an individual's or entity's
7.14 participation in the program without providing advance notice and an opportunity for a
7.15 hearing when the suspension or termination is required because of the individual's or entity's
7.16 exclusion from participation in Medicare.
7.17     (b) Within five days of taking an action under paragraph (a), the commissioner must
7.18 send notice of the suspension or termination. The notice must:
7.19     (1) state that the suspension or termination is the result of the individual's or entity's
7.20 exclusion from Medicare;
7.21     (2) identify the effective date of the suspension or termination; and
7.22     (3) inform the individual or entity of the need to be reinstated to Medicare before
7.23 reapplying for participation in the program.
7.24     EFFECTIVE DATE. This section is effective the day following final enactment.
7.25   Sec. 9. Minnesota Statutes 2024, section 256B.064, is amended by adding a subdivision
7.26 to read:
7.27     Subd. 2c. Imposition of monetary recovery and sanctions before a hearing. (a) Except
7.28 as provided in paragraph (b), the commissioner may withhold or reduce payment to an
7.29 individual or entity after notice but before a hearing if, in the commissioner's opinion,
7.30 withholding or reducing payment is necessary to protect the public welfare and the interests
7.31 of the program.
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8.1      (b) The commissioner must not withhold or reduce payments to a nursing home or
8.2  convalescent care facility before a hearing.
8.3      EFFECTIVE DATE. This section is effective the day following final enactment.
8.4    Sec. 10. Minnesota Statutes 2024, section 256B.064, is amended by adding a subdivision
8.5  to read:
8.6      Subd. 2d. Imposition of monetary recovery and sanctions without prior notice. (a)
8.7  Except when the commissioner finds good cause not to suspend payments under Code of
8.8  Federal Regulations, title 42, section 455.23(e) or (f), the commissioner must withhold or
8.9  reduce payments to an individual or entity without providing advance notice of the
8.10 withholding or reduction if either of the following occurs:
8.11     (1) the individual or entity is convicted of a crime involving the conduct described in
8.12 subdivision 1a; or
8.13     (2) the commissioner determines there is a credible allegation of fraud for which an
8.14 investigation is pending under the program. Allegations are considered credible when they
8.15 are supported by a preponderance of the evidence and the state agency has reviewed all
8.16 allegations, facts, and evidence carefully and acts judiciously on a case-by-case basis. A
8.17 credible allegation of fraud is an allegation supported by a preponderance of the evidence
8.18 that has been verified by the state, from any source, including but not limited to:
8.19     (i) fraud hotline complaints;
8.20     (ii) claims data mining; and
8.21     (iii) patterns identified through provider audits, civil false claims cases, and law
8.22 enforcement investigations.
8.23     (b) The commissioner must send notice of the withholding or reduction of payments
8.24 under paragraph (a) within five days of withholding or reducing payment unless requested
8.25 in writing by a law enforcement agency to temporarily withhold the notice. The notice need
8.26 not disclose specific information concerning an ongoing investigation. The notice must:
8.27     (1) state that payments are being withheld according to paragraph (a);
8.28     (2) set forth the allegations as to the nature of the withholding action, which must specify:
8.29     (i) each disputed item, and for each disputed item the reason for the dispute and an
8.30 estimate of the dollar amount involved;
8.31     (ii) the computation that the commissioner believes is correct;
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9.1      (iii) the statute or rule the commissioner believes the individual or entity violated; and
9.2      (iv) other information necessary to aid the individual or entity when providing written
9.3  evidence under clause (5) or filing an appeal under section 256B.064, subdivision 2;
9.4      (3) except in the case of a conviction for conduct described in subdivision 1a, state that
9.5  the withholding is for a temporary period not to exceed 60 days and cite the circumstances
9.6  under which withholding will be terminated;
9.7      (4) identify the types of claims to which the withholding applies; and
9.8      (5) inform the individual or entity of the right to submit written evidence for consideration
9.9  by the commissioner.
9.10     (c) The commissioner must cease to withhold or reduce payments under this subdivision
9.11 after 60 days have passed, after the commissioner determines there is insufficient evidence
9.12 of fraud by the individual or entity, or after legal proceedings relating to the alleged fraud
9.13 are completed, unless the commissioner has sent notice of intention to impose monetary
9.14 recovery or sanctions.
9.15     EFFECTIVE DATE. This section is effective the day following final enactment.
9.16   Sec. 11. Minnesota Statutes 2024, section 256B.064, is amended by adding a subdivision
9.17 to read:
9.18     Subd. 2e. Forfeiture of withheld payments upon criminal conviction. Upon conviction
9.19 for a crime related to the provision, management, or administration of a health service under
9.20 medical assistance, a payment held pursuant to this section by the commissioner or a managed
9.21 care organization that contracts with the commissioner under section 256B.035 is forfeited
9.22 to the commissioner or managed care organization, regardless of the amount charged in the
9.23 criminal complaint or the amount of criminal restitution ordered.
9.24     EFFECTIVE DATE. This section is effective the day following final enactment.
9.25   Sec. 12. Minnesota Statutes 2024, section 256B.064, subdivision 3, is amended to read:
9.26     Subd. 3. Mandates on prohibited payments. (a) The commissioner shall must maintain
9.27 and publish a list of each excluded individual and entity that was convicted of a crime related
9.28 to the provision, management, or administration of a medical assistance health service, or
9.29 suspended or terminated under subdivision 2 2b. Medical assistance payments cannot be
9.30 made by an individual or entity for items or services furnished either directly or indirectly
9.31 by an excluded individual or entity, or at the direction of excluded individuals or entities.
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10.1      (b) The entity must check the exclusion list on a monthly basis and document the date
10.2  and time the exclusion list was checked and the name and title of the person who checked
10.3  the exclusion list. The entity must immediately terminate payments to an individual or entity
10.4  on the exclusion list.
10.5      (c) An entity's requirement to check the exclusion list and to terminate payments to
10.6  individuals or entities on the exclusion list applies to each individual or entity on the
10.7  exclusion list, even if the named individual or entity is not responsible for direct patient
10.8  care or direct submission of a claim to medical assistance.
10.9      (d) An entity that pays medical assistance program funds to an individual or entity on
10.10 the exclusion list must refund any payment related to either items or services rendered by
10.11 an individual or entity on the exclusion list from the date the individual or entity is first paid
10.12 or the date the individual or entity is placed on the exclusion list, whichever is later, and an
10.13 entity may be subject to:
10.14     (1) sanctions under subdivision 2 this section;
10.15     (2) a civil monetary penalty of up to $25,000 for each determination by the department
10.16 that the vendor employed or contracted with an individual or entity on the exclusion list;
10.17 and
10.18     (3) other fines or penalties allowed by law.
10.19     EFFECTIVE DATE. This section is effective the day following final enactment.
10.20   Sec. 13. Minnesota Statutes 2024, section 256B.064, subdivision 4, is amended to read:
10.21     Subd. 4. Notice. (a) The department shall must serve the notice required under subdivision
10.22 subdivisions 2 and 2d using a signature-verified confirmed delivery method to the address
10.23 submitted to the department by the individual or entity. Service is complete upon mailing.
10.24     (b) The department shall must give notice in writing to a recipient placed in the Minnesota
10.25 restricted recipient program under section 256B.0646 and Minnesota Rules, part 9505.2200.
10.26 The department shall must send the notice by first class mail to the recipient's current address
10.27 on file with the department. A recipient placed in the Minnesota restricted recipient program
10.28 may contest the placement by submitting a written request for a hearing to the department
10.29 within 90 days of the notice being mailed.
10.30     EFFECTIVE DATE. This section is effective the day following final enactment.
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11.1    Sec. 14. Minnesota Statutes 2024, section 256B.064, subdivision 5, is amended to read:
11.2      Subd. 5. Immunity; good faith reporters. (a) A person who makes a good faith report
11.3  is immune from any civil or criminal liability that might otherwise arise from reporting or
11.4  participating in the investigation. Nothing in this subdivision affects an individual's or
11.5  entity's responsibility for an overpayment established under this subdivision.
11.6      (b) A person employed by a lead investigative agency who is conducting or supervising
11.7  an investigation or enforcing the law according to the applicable law or rule is immune from
11.8  any civil or criminal liability that might otherwise arise from the person's actions, if the
11.9  person is acting in good faith and exercising due care.
11.10     (c) For purposes of this subdivision, "person" includes a natural person or any form of
11.11 a business or legal entity.
11.12     (d) After an investigation is complete, the reporter's name must be kept confidential.
11.13 The subject of the report may compel disclosure of the reporter's name only with the consent
11.14 of the reporter or upon a written finding by a district court that the report was false and there
11.15 is evidence that the report was made in bad faith. This subdivision does not alter disclosure
11.16 responsibilities or obligations under the Rules of Criminal Procedure, except that when the
11.17 identity of the reporter is relevant to a criminal prosecution the district court shall must
11.18 conduct an in-camera review before determining whether to order disclosure of the reporter's
11.19 identity.
11.20     EFFECTIVE DATE. This section is effective the day following final enactment.
11.21   Sec. 15. DIRECTION TO COMMISSIONER OF HUMAN SERVICES; MEDICAL
11.22 ASSISTANCE PROGRAM INTEGRITY ADVISORY BOARD.
11.23     (a) By January 1, 2027, the commissioner of human services must establish a medical
11.24 assistance program integrity advisory board. The board must oversee medical assistance
11.25 program integrity efforts, evaluate the efforts, and provide recommendations, including but
11.26 not limited to legislative changes, to the commissioner on ways to improve medical assistance
11.27 program integrity. The board must advise the commissioner on enforcement proportionality,
11.28 analytics governance, and program integrity metrics.
11.29     (b) The board must consist of seven members appointed by the commissioner of human
11.30 services and must include:
11.31     (1) at least one member who is a forensic accountant;
11.32     (2) at least one member who is a data scientist;
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12.1      (3) at least one member who is a long-term services and supports program expert;
12.2      (4) at least one member who is a program design and evaluation specialist; and
12.3      (5) at least one member of the public.
12.4      (c) The commissioner must annually select a board chair from among the members. The
12.5  commissioner must develop procedures for appointing new members, compensation for
12.6  members, and term length, if any, for members.
12.7    Sec. 16. DIRECTION TO COMMISSIONER OF HUMAN SERVICES; MEDICAL
12.8  ASSISTANCE PROVIDER ENROLLMENT STANDARDS.
12.9      (a) By January 1, 2027, the commissioner of human services must make recommendations
12.10 to the chairs and ranking minority members of the legislative committees with jurisdiction
12.11 over human services policy and finance regarding statutory and program changes to ensure
12.12 only qualified, prepared, and financially stable providers are permitted to enroll as a medical
12.13 assistance provider type designated by the commissioner as high-risk under Minnesota
12.14 Statutes, section 256B.04, subdivision 21.
12.15     (b) The commissioner must include in the recommendations enhanced provider enrollment
12.16 screening standards related to the provider's regulatory knowledge, operational readiness,
12.17 internal controls, financial liquidity and solvency, and capacity to comply with state and
12.18 federal Medicaid requirements.
12.19     (c) In developing the recommendations, the commissioner must consult with the Health
12.20 Law Section of the Minnesota State Bar Association, representatives of the medical assistance
12.21 providers subject to the recommendations being considered, and other impacted groups.
12.22   Sec. 17. DIRECTION TO COMMISSIONER OF HUMAN SERVICES; PROGRAM
12.23 INTEGRITY TECHNOLOGY MODERNIZATION.
12.24     By January 1, 2027, the commissioner of human services must develop recommendations
12.25 on how to modernize program integrity infrastructure within the Department of Human
12.26 Services. The recommendations must include the infrastructure's capability to provide
12.27 near-real-time analytics and risk scoring; prepayment review and anomaly detection;
12.28 cross-matching of enrollment data, licensure data, and claims data; and security dashboards
12.29 for audits and investigations with privacy safeguards. By January 15, 2027, the commissioner
12.30 must provide recommendations to the chairs and ranking minority members of the legislative
12.31 committees with jurisdiction over human services program integrity functions.
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13.1    Sec. 18. DIRECTION TO COMMISSIONER OF HUMAN SERVICES; PROGRAM
13.2  STRUCTURE AND DESIGN AUDITS.
13.3      (a) By August 1, 2026, the commissioner of human services must select and contract
13.4  with an independent research entity to conduct comprehensive program structure and design
13.5  audits on the services listed in paragraph (b). Each audit must identify structural incentive
13.6  misalignments; undue compliance burdens on good-faith providers; regulatory and billing
13.7  ambiguities; and gaps in utilization controls. Each audit must also provide evidence-based
13.8  redesign recommendations.
13.9      (b) The services that must be audited by the independent research entity include:
13.10     (1) adult companion services;
13.11     (2) adult day services;
13.12     (3) adult rehabilitative mental health services;
13.13     (4) assertive community treatment;
13.14     (5) community first services and supports;
13.15     (6) early intensive developmental and behavioral intervention;
13.16     (7) individualized home supports;
13.17     (8) integrated community supports;
13.18     (9) intensive residential treatment services;
13.19     (10) night supervision services;
13.20     (11) nonemergency medical transportation services;
13.21     (12) peer recovery support services; and
13.22     (13) recuperative care.
13.23     (c) Each audit must be completed by January 1, 2027. The commissioner must submit
13.24 each completed audit report within 30 days of receipt to the chairs and ranking minority
13.25 members of the legislative committees with jurisdiction over human services program
13.26 integrity functions.
 Sec. 18.  13
 03/04/26   REVISOR  AGW/EN  26-06966
14.1    Sec. 19. DIRECTION TO COMMISSIONER OF HUMAN SERVICES;
14.2  PROPORTIONAL MEDICAL ASSISTANCE PROGRAM INTEGRITY
14.3  INTERVENTIONS.
14.4      (a) By January 1, 2027, the commissioner of human services must make recommendations
14.5  to the chairs and ranking minority members of the legislative committees with jurisdiction
14.6  over human services policy and finance on modernizing medical assistance program integrity
14.7  efforts to strengthen fraud deterrence and promote clarity, proportionality based on the
14.8  severity of an infraction, provider education, client protection, and continuity of care.
14.9      (b) The commissioner must include in the recommendations a comprehensive approach
14.10 to proportional medical assistance program integrity interventions commensurate with the
14.11 severity of an infraction of a medical assistance program requirement.
14.12     (c) For the purposes of the recommendations, the commissioner must consider three
14.13 levels of severity:
14.14     (1) low-severity conduct, which includes clerical or documentation deficiencies with no
14.15 evidence of intent to defraud;
14.16     (2) moderate-severity conduct, which includes repeat errors, evidence of weak internal
14.17 controls, or other behavior that results in a pattern of improper payment; and
14.18     (3) high-severity conduct, which includes intentional actions by a provider to defraud
14.19 and gain unearned payment.
14.20     (d) For the purposes of the recommendations, the commissioner must consider three
14.21 levels of intervention:
14.22     (1) provider education for low-severity conduct;
14.23     (2) targeted audits for moderate-severity conduct; and
14.24     (3) suspended provider enrollment for high-severity conduct.
14.25     (e) In developing the recommendations, the commissioner must consult with the Health
14.26 Law Section of the Minnesota State Bar Association, representatives of the medical assistance
14.27 providers subject to the recommendations being considered, and other impacted groups.
14.28   Sec. 20. APPROPRIATION; MINNESOTA ATTORNEY GENERAL.
14.29     $391,000 in fiscal year 2027 is appropriated from the general fund to the attorney general
14.30 to increase the number of staff within the Medicaid Fraud Control Unit to improve program
14.31 integrity and increase the Medical Fraud Control Unit's capacity for compliance efforts.
 Sec. 20.  14