Purpose

To strengthen the integrity and oversight of Minnesota’s medical assistance (Medicaid) program by expanding provider screening, requiring site visits, adding background checks and compliance requirements, and adding financial safeguards for certain providers.

Main provisions

• Provider enrollment and screening

  • The state will enroll providers and perform required screening for each provider-controlled location where direct services are given.
  • Background checks are required under federal rules (42 C.F.R. 455 subpart 1 E), including fingerprint-based studies when appropriate.
  • The commissioner must revalidate each provider at least every five years, with more frequent revalidation (every three years) for certain provider types (e.g., personal care assistance agencies, CFSS provider agencies, CFSS financial management services, EIDBI agencies), and potentially more often for high-risk providers.
  • The commissioner may require additional information and will deny incomplete applications if the provider does not respond within 60 days.

• Revalidation process and billing safeguards

  • The revalidation process includes a 30-day due date notice, a 30-day extension if needed, and a 60-day termination notice if deficiencies aren’t fixed, after which the provider’s ability to bill can be suspended.
  • If a provider fails to meet any provider requirement, the commissioner may suspend billing until compliance; some suspension decisions are not subject to an administrative appeal.
  • Correspondence may be delivered electronically to the provider’s MNITS mailbox (with certain exceptions for background studies).
  • If CMS designates a provider as high-risk, the state may withhold payment for up to 90 days after the first claim submission.

• Compliance requirements for enrolled providers

  • Enrolled providers (or their designated compliance officers) must develop and implement programs to ensure compliance with medical assistance laws, train staff, respond to improper billing, monitor compliance, and report violations.
  • Providers must report any identified overpayments within 60 days and work with the commissioner to recover overpayments.

• Documentation and enforcement

  • The commissioner may revoke enrollment for patterns of missing documentation or failure to provide needed access to orders, certifications, or referrals.
  • If a pattern is found (more than one instance), the commissioner can take action; these provisions supplement existing sanctions authorities.

• High-risk designations and unannounced inspections

  • The commissioner may require unannounced onsite inspections of all provider locations as a condition of enrollment, reenrollment, and revalidation.
  • A published list (in the Minnesota Health Care Program Provider Manual) will identify provider types designated as limited, moderate, or high-risk under CMS criteria (42 C.F.R. 424.518). These determinations are not subject to administrative appeal.
  • High-risk designations may be used to trigger extra oversight and enforcement measures.

• Background checks for owners and certain entities

  • Providers with high-risk designation or with five percent or greater ownership must consent to criminal background checks (including fingerprinting when required by law or CMS) as a condition of enrollment.

• DMEPOS surety bonds (bonding requirement)

  • Durable Medical Equipment (DME) providers/suppliers must obtain a surety bond at initial enrollment or reenrollment, and as a condition for continued enrollment, with DHS named as obligee.
  • Bond amounts vary by revenue and are tiered (e.g., $50,000 for lower-revenue cases; $100,000 for higher-revenue cases; a specific $50,000 bond if annual Medicaid revenue is up to $300,000; $100,000 if above $300,000; exceptions apply to certain provider types).
  • Bonds must cover costs and fees in pursuing bond claims; claims must be brought within six years of a final agency decision.
  • Certain providers are exempt from the bond requirement (e.g., federally qualified health centers, home health agencies, Indian Health Service, pharmacies, rural health clinics).

• Additional enrollment protections and authority

  • CMS, CMS agents, or designated contractors may conduct unannounced onsite inspections at any provider location, in line with federal rules.
  • The commissioner has authority to suspend or withhold enrollment or payments and to enforce related conditions consistent with federal regulations.

• Fee for provider screening

  • The commissioner will collect a nonrefundable application fee to cover provider screening costs, deposited into a provider screening account funded by the special revenue fund.
  • The fee schedule is tied to a CPI-adjusted amount that historically began at $532 (for 2013) and increases annually; the fee applies to initial enrollment, new practice locations, reenrollment where applicable, and revalidation.
  • Certain exemptions apply, such as providers already enrolled in Medicare or enrolled elsewhere (if qualification criteria are met), providers enrolling as individuals, and group practices with reassigned billing.

Significant changes from prior law

• All enrolled medical assistance providers would be subject to site visits (unannounced onsite inspections) before enrollment, reenrollment, and revalidation.
• Introduction of mandatory background checks and ongoing revalidation cycles (5-year for most providers; 3-year for specific high-risk or designated providers).
• Creation of a formal compliance program requirement with a designated compliance officer for many enrolled providers.
• New financial safeguards, notably DMEPOS surety bonds, with bonding amounts scaled to provider revenue and specific exemptions.
• Implemented payment-withholding and denial/suspension authorities for noncompliance, including some actions not subject to appeal.
• Establishment of a provider screening fee and a dedicated provider screening account to fund enforcement and screening activities.
• Expanded enforcement tools and CMS coordination for high-risk providers.

Implementation considerations

• The changes would increase administrative and financial responsibilities for providers, especially those with multiple locations or designated high-risk status.
• Providers may face increased upfront costs (bonding, screening fees) and ongoing compliance obligations (compliance programs, training, audits).
• Some enforcement actions bypass traditional appeals processes, potentially affecting provider rights in disputes.
• The scope of “high-risk” is tied to CMS criteria, which could cover a broad range of provider types.

Relevant Terms - medical assistance, Medicaid, Minnesota Health Care Program - provider enrollment, provider screening - background study, fingerprint-based background check, 42 C.F.R. 455 subpart 1 E - revalidation, enrollment locations, provider-controlled location - CFSS, CFSS provider agency, CFSS financial management services provider - EIDBI, home care provider, DMEPOS, durable medical equipment, prosthetics, orthotics, supplies - compliance program, compliance officer, CMS, Centers for Medicare and Medicaid Services - unannounced onsite inspections, pre-enrollment, pre-reenrollment, pre-revalidation - high-risk designation, moderate-risk designation, limited-risk designation - withhold payments, suspension, termination, denial - ownership interest, 5 percent or higher - criminal background checks, fingerprinting - surety bond, bond amount, obligee, recovery of costs and fees - provider screening account, nonrefundable application fee, CPI adjustment - administrative appeal, due process (note: some actions are not subject to appeal)