Yet another fraud scandal brewing in state government
Yesterday, the Minnesota Star Tribune committed an act of journalism in reporting on another significant fraud scandal in state government. This one involves a program called Housing Stabilization Services (HSS) and is overseen by the state Dept. of Human Services (DHS). As DHS explains:
Housing Stabilization Services is a new Minnesota Medical Assistance benefit to help people with disabilities, including mental illness and substance use disorder, and seniors find and keep housing.
Like many DHS programs, HSS doesn’t “help people” directly, instead, it provides cash to nonprofits and for-profit companies to provide services on behalf of DHS.
As far as I can tell, HSS doesn’t do anything as simple as housing the homeless. It mostly pays for homeless “counseling.” Perhaps some moving expenses get reimbursed.
Drearily, HSS is following the same pattern as other new or expanded “benefit” programs like Feeding Our Future and autism clinics. Longtime nonprofit providers working in the field find the new benefit program impossible to navigate or access, but hundreds of new “providers” pop up overnight to snag the lion’s share of the available money. The Star Tribune headline sums it up:
Housing program dogged with complaints of wait times, potential fraud
Housing Stabilization Services was supposed to help Minnesotans find housing and keep it, but the fast-growing Medicaid benefit has had a difficult rollout.
Somehow, the program manages to combine months-long-wait times with explosive growth in cash out the door.
In this case, “hundreds of new providers” add up to 1,500 (!), the Star Tribune reports. Some 14,100 people are enrolled in the program, according to the state’s Dept. of Management and Budget (MMB), nearly double the number the program was designed to serve (7,800).
The program has been billed $248 million from July 2020 until the end of last year.
Gov. Walz’s solution is to hire more bureaucrats to process applications faster. But sending money out the door more quickly to fraudsters doesn’t seem like a win from where I’m sitting. MMB writes about the ever-lengthening application processing times:
The financial strain and uncertainty caused by these delays lead some providers to stop providing Housing Stabilization Services altogether, further limiting service options for individuals in need.
It’s like that old Yogi Berra joke that the program is so popular no one is using it anymore. Somebody is getting the money, though.
Doing some simple math on the above numbers and you quickly come to the conclusion that both the state and the homeless themselves would be better off if the state just rented them apartments directly.
Indeed, MMB documents estimate that DHS will spend $270 million this year across all of its fifteen (15) homelessness programs. Assuming an average rent of $2,000 per month, DHS alone could house more than 11,000 people.
HSS appears tailor-made as a new addition to ScandalTracker 2025TM. However, for now, we lack a specific dollar amount for the fraud portion of the program.
I’m sure we haven’t heard the last of this.