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Gov. Tim Walz on Tuesday out rolled a plan to remake the way Minnesota provides Medicaid services that includes centralizing much of the work handled now by counties and the state’s managed health care organizations.

The Minnesota Department of Human Services would take over determining eligibility for Medicaid programs, and the state would take the lead in modernizing what’s become “a bit of a Frankenstein monster,” Walz told reporters. 

The governor said the state’s Medicaid services had become increasingly difficult for counties to administer and police.

“The system is growing too complex,” Walz said. “This is not putting blame on counties or managed care organizations. It’s just stating a reality.” In the long-run it will remake “the most outdated system you can ever imagine” and save counties money in the long run, he added, noting that other states have moved to more centralized systems.

“The ultimate goal is to get the resources to the people who need it,” he said. 

Tuesday’s announcement comes after Walz last month 

 aimed at reducing the likelihood of fraudulent actors taking advantage of state programs. 

The focus on fraud in Minnesota has increased over the past few years, in the wake of the large-scale Feeding our Future scheme.

The second-term DFL governor has faced scrutiny over his response to fraud from Republicans. The issue also informed his decision to opt out of the race for a third term as governor earlier this year. 

When he announced he was leaving the race in early January, Walz said his goal in his final year in office is to set the state up to prevent any future fraud.

“This is my top priority,” he said when rolling out his anti-fraud package in late February. “When I leave next January, I do want that designation, that Minnesota's programs have the best program integrity, the best safeguards, the best pre-prevention work that we can depend on and that more people can continue to go to prison if they do this.”

Key DFLer ‘disappointed’ by Walz’s approach

The changes Walz proposed Tuesday would need lawmaker approval, which could be difficult in a narrowly split Legislature.

Walz’s approach drew quick criticism Tuesday from a key member of his own party.

“I was disappointed to learn about this proposal just last night without a thorough conversation with the committee that has primary jurisdiction over Minnesota’s human services system,” Senate Human Services Committee John Hoffman, DFL–Champlin, said in a statement prior to Walz’s remarks.

“Moving forward, I hope the administration will engage directly with the Legislature so we can work together to improve outcomes, strengthen accountability” and protect people who need the programs, he added.

State Sen. Jordan Rasmusson, the ranking Republican on the Senate Human Services Committee, dismissed Walz’s proposal as “yet another attempt to paper over the state’s fraud problem.”

Minnesotans are “still staring at this administration’s failures to protect taxpayers and the Minnesotans who rely on these services,” Rasmusson, R-Fergus Falls, said in a statement.

Legislative Democrats and Republicans have put out their own anti-fraud proposals. Those packages mirror each other in some areas, and have clear differences in others.

The GOP package includes increasing electronic verification processes, funding cuts for agency budgets and administrators when fraud is found, and more power for the Senate in confirming governor-appointed commissioners.

The DFL package includes more site visits to providers, modernization of IT systems and adding more investigators and prosecutors.

For both parties and the governor, those proposals include starting an inspector general’s office.

But the inspector general bill has been one of the areas of contention so far this session, as Republicans would like the bill passed in a bipartisan vote last session. 

Under that bill, the head of that office would be appointed by the governor from a list of approved candidates from the Senate. There would also be an independent law enforcement authority housed under that watchdog agency.

In the DFL House bill, the governor could appoint the head of that office from the Senate list though they could also opt to appoint someone from outside the list. In the DFL bill, the office would have subpoena powers, but cases would be referred to the Minnesota Bureau of Apprehension.

Minnesota News

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Fraud in Minnesota

Peter Cox

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Dana Ferguson

Gov. Tim Walz on Tuesday out rolled a plan to remake the way Minnesota provides Medicaid services that includes centralizing much of the work handled now by counties and the state’s managed care organizations.

Walz unveils plan to 'transform' Minnesota's human services system

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