Minnesota Pauses Medicaid Payments, Hires UnitedHealth Optum

Gov. Tim Walz ordered a third-party audit of billing for 14 high-risk Medicaid and human services programs and paused payments to providers for up to 90 days so the Department of Human Services can perform pre-payment reviews. The state contracted UnitedHealth-owned Optum on a one-year, $2.3 million deal to run AI- and data-driven analyses to flag missing documentation, unusually high billing patterns, or other anomalies for DHS to verify. Programs under review include Housing Stabilization Services (which the state is terminating), autism services, integrated community supports, nonemergency medical transportation, peer recovery services, adult day services and others that serve children, people with disabilities and older adults. Officials said the action responds to programmatic vulnerabilities and past fraud schemes — including the Feeding Our Future pandemic scam and recent housing and autism fraud cases — and that DHS will refer suspected fraud to its Office of Inspector General, which could lead to additional criminal charges. Families and providers who depend on these services reported fear and uncertainty about care continuity and payment delays, while DHS said it will follow federal payment rules and review Optum-flagged claims before taking enforcement action.