Minnesota DHS moves to terminate housing stability program amid fraud investigation
DHS' Temporary Commissioner Shireen Gandhi wrote a letter Friday to the federal Centers for Medicare and Medicaid Services requesting to end the program.
Housing Stabilization Services is a newer Minnesota Medical Assistance benefit meant to help find and maintain homes for people with disabilities or the elderly. But a search warrant filed earlier this month in the U.S. District Court of Minnesota details a "massive scheme to defraud" the program.
"DHS is rooting out fraud wherever we find it. We cannot allow one more cent of taxpayer money going out the door to providers who claim to serve Minnesotans in need of stable housing while lining their pockets for personal gain," said DHS Temporary Commissioner Shireen Gandhi. "As I made clear in my letter to CMS, our own data analysis has shown that this program does not have the necessary controls to stop bad actors, and we are urging CMS to approve our request to end this program as swiftly as possible."
What was originally estimated in 2020 to cost taxpayers about $2.5 million a year ended up costing $104 million in 2024. The FBI in the warrant called the housing program "extremely vulnerable to fraud."
Earlier this week, Gov. Tim Walz said he'd stopped payments to 50 program recipients. DHS said it has since issued 11 payment withholds to HSS providers.
DHS Inspector General James Clark said a data analysis revealed "too many fraudulent, unqualified bad actors have likely stolen money from our state's taxpayers, and also cheated Minnesotans who need housing services."
The human services department added that it intends to redesign and relaunch the benefit, working with the legislature and providers to create a robust program.
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