The Minnesota Department of Human Services is seeking to terminate Housing Stabilization Services amid allegations of widespread fraud in the program intended to help people find and keep housing.
The agency announced Friday that it is taking the unprecedented step to end the program. A letter sent by DHS to the federal Centers for Medicare and Medicaid Services asks to stop the Medicaid-funded benefit.
DHS said it intends to redesign and relaunch the program.
“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,” DHS temporary Commissioner Shireen Gandhi said in a prepared statement. “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.”
The state has been halting payments to individual providers, but now wants sign-off from the federal government to end the benefit altogether.
Gov. Tim Walz said Monday that the state stopped payments to “most of the people involved in this program.” State officials said Friday they have suspended payments to 77 Housing Stabilization Services providers “based upon credible allegations of fraud,” with 11 of those payment withholds newly effective Thursday.
“As our [Office of Inspector General] data and investigations have revealed, too many fraudulent, unqualified bad actors have likely stolen money from our state’s taxpayers, and also cheated Minnesotans who need housing services,” DHS Inspector General James Clark said in a statement. “The termination of this program, while regrettable for those who need these services, is the necessary step at this time.”
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