The Minnesota Department of Human Services (DHS) announced last week that it has disenrolled about 800 Medicaid providers who had not billed for services in more than a year.
The move targets providers certified before April 1, 2024, who have not billed since that date. The number excludes 621 providers in the fraud-ridden Housing Stabilization Services (HSS) program because it is set to end Oct. 31, according to an Oct. 16 DHS press release.
“We must reduce risk and increase efficiencies wherever we can,” said Temporary Human Services Commissioner Shireen Gandhi. “Taking this first step to streamline the pool of inactive providers will strengthen the integrity of Minnesota’s Medicaid programs and services.”
The disenrollments align with executive order 25-10, issued last month, in which Gov. Tim Walz directed agencies to intensify fraud prevention measures, including the immediate removal of non-billing Medicaid providers “within the bounds of the law.”
Additional rounds of disenrollments are planned, and affected providers will receive notification letters with appeal instructions, according to DHS.
Walz ‘will not tolerate’ fraud
In the executive order, Walz defended his administration’s response to fraud, writing that “fraud perpetrated against the State is unacceptable and my administration will not tolerate the abuse or misuse of public funds.”
He acknowledged that “programs prioritized access, but did not always include the safeguards necessary to protect programs against predatory or fraudulent providers,” and blamed part of the problem on silence from “leaders in communities where fraud is prevalent.”
The order directs agencies to strengthen oversight in response to the “criminal schemes focused on taking advantage of Minnesota’s programs and our culture of generosity.”
The executive order was issued one day before eight defendants were federally charged with wire fraud for their roles in “a massive fraud in Minnesota’s housing stabilization program,” according to former Acting U.S. Attorney Joe Thompson.
“The level of fraud in these programs is staggering. Unfortunately, our system of trust but verify no longer works. These programs have been abused over and over to the point where the fraud has overtaken the legitimate services,” Thompson said while speaking about HSS and other Medicaid programs.
Republicans argue that taxpayers have been defrauded of hundreds of millions of dollars during Walz’s tenure — making the governor’s recent efforts to address fraud seem like a late response to a long-brewing crisis a year before Minnesota’s next gubernatorial election.
“The Governor’s executive order yesterday does little to address this problem. Minnesotans deserve an independent office of inspector general within the executive branch with real investigative authority and subpoena power. Agencies have proven they cannot be trusted to police themselves; the fox cannot guard the hen house,” Rep. Kristin Robbins, R-Maple Grove, said last month.
Licenses denied for suspected fraudsters
Federal charging documents describe an elaborate scheme that defrauded the state’s HSS program, which provided Medicaid-funded help to Minnesotans with disabilities, mental illness, and substance-use disorders.
“I want to be clear on the scope of the crisis. What we see are schemes stacked upon schemes, draining resources meant for those in need. It feels never ending,” Thompson said in a Sept. 18 press release.
Prosecutors said the program’s “low barriers to entry” and “minimal requirements for reimbursement” made it “susceptible to fraud.”
The program was projected to cost $2.6 million annually, but ballooned to $21 million in 2021, $42 million in 2022, $74 million in 2023, $104 million in 2024, and another $61 million in the first half of 2025.
Among the charged providers are Asad Adow of Leo Human Services LLC, Moktar Aden of Brilliant Minds Services LLC, and Christopher Falade of Faladcare Inc.
All three were denied state licenses earlier this month by DHS, including one that Falade applied for under a company name called Fadmetrocare Inc.
“Based on the pending criminal investigations, DHS does not have faith that you are able to operate a license that would comply with applicable statutes and rules. In addition, DHS cannot ensure that public funds that would be received by your program will be obtained in compliance with relevant statutes and rules and that persons served by the program would receive the care to which they are entitled,” DHS wrote in the denial letters.
Additionally, DHS has suspended a license for 24hrs Home Care LLC, a St. Cloud company operated by Anwar Adow, another defendant in the case, and for Faladcare.
Prosecutors allege that Brilliant Minds submitted about $2.3 million in false claims, ranking among the state’s 10 highest-billing providers in 2024.
Faladcare allegedly billed over $2.2 million for roughly 100 clients, while Leo Human Services allegedly took in $2.7 million for fake or inflated services tied to about 250 beneficiaries.
“I have spent my career as a fraud prosecutor and the depth of the fraud in Minnesota takes my breath away,” Thompson said. “The fraud must be stopped.”
Jenna Gloeb
Jenna Gloeb is an Edward R. Murrow Award-winning journalist, media producer, public speaker, and screenwriter. Most recently, she worked as a reporter and on-air host for CCX Media. Jenna is a Minnesota native and resides in the Twin Cities with her husband, son, daughter, and two dogs.
