DHS shuts down fraud-ridden HSS program

Joe Thompson gets results. The acting United States Attorney for Minnesota launched an investigation into the fraud-riddled Medicaid program Housing Stabilization Services (HSS).

Don’t be confused. HSS doesn’t provide actual housing or anything else that would be considered useful. Instead, the program, operated by the state Dept. of Human Services (DHS), offers counseling services to Medicaid program participants.

Actually, it doesn’t do that either, as Thompson has documented. The “vast majority” of the $100 million in annual spending (of taxpayer funds) goes to outright fraud.

Today, state DHS took the correct step to shut down the program entirely, you can read their letter to the U.S. Medicaid office here. The Minnesota Star Tribune has a report on this major development:

Minnesota moves to terminate housing program amid FBI fraud investigation.

It’s about time. Thompson issued a statement this afternoon:

We welcome today’s news. Fraud has been eating away at Minnesota’s public programs for years, costing taxpayers billions. Ending the Housing Stabilization Services program cuts off a major source of abuse, but this is just the beginning. The fight against fraud continues, and a broader reckoning is long overdue.

The Star Tribune reports:

DHS said it intends to redesign and relaunch the benefit.

Why? The program was flawed from its inception. Just admit defeat and move on.

The state has been halting payments to individual providers, but it is seeking sign-off from the federal government to end the stabilization program entirely.

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.

The state needs to go much further. An inquest, perhaps conducted by the state’s Office of the Legislative Auditor (OLA), needs to be conducted. The Star Tribune poses the $billion question:

Several people said concerns were passed along to DHS years ago and it isn’t clear why the state hasn’t addressed the issues sooner.

Why not? It’s clear that under Gov. Tim Walz state agencies have turned a blind eye to the industrial-scale fraud taking place right in front of them.

At this point, with the fraud ticker now running above $1 billion under Walz, we need answers before the next massive fraud scandal breaks. Is it nonfeasance, misfeasance, or malfeasance?

First came the childcare scandal, next was Feeding Our Future, and now we have HSS. Recall the old Ian Fleming James Bond quote:

Once is happenstance. Twice is coincidence. Three times is enemy action.

Also deserving credit for the day’s developments is reporter A.J. Lagoe of KARE-11. He has been on the case from the beginning.