The Housing Stabilization Services program in Minnesota experienced a dramatic increase in costs, ballooning from an expected $2.5 million annually to $104 million. The FBI has identified significant fraud vulnerabilities within this program, with investigators noting several businesses involved in fraudulent activities targeting Medicaid-eligible individuals in need of assistance. These companies misled individuals recovering from drug addiction, promising stable housing while billing for services that were not provided. The Minnesota Department of Human Services is working with various agencies to investigate and address these issues.
Originally expected to cost $2.5 million per year, the costs of Minnesota's Housing Stabilization Services program surged to $21 million in 2021 and reached $104 million last year. Investigators believe the program is exceedingly vulnerable to fraud and identified multiple business locations tied to fraudulent activities across the Twin Cities metro area. Companies created to provide housing support have exploited the housing and addiction crisis, preying on vulnerable individuals by promising stable housing and billing for services not provided.
The FBI's investigation revealed that after signing up Medicaid-eligible individuals from treatment centers, companies billed extensively for services that were never rendered. The participating companies took advantage of the ongoing crises in Minnesota, capitalizing on the plight of those recovering from drug addiction.
The Minnesota Department of Human Services (DHS) is administering the criticized program, and temporary commissioner Shireen Gandhi announced the execution of federal search warrants against Housing Stabilization Services providers as part of a collaborative effort to ensure Medicaid program integrity. This initiative reflects a commitment among various agencies including the DHS, Minnesota Department of Public Safety, and federal offices.
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