HF3423
Requirements for provider enrollment in medical assistance modified.
Legislative Session 94 (2025-2026)
Related bill: SF4222
AI Generated Summary
Purpose and intent
- Strengthen how providers enroll in Minnesota’s medical assistance program (MA) and improve oversight to reduce fraud, waste, and abuse.
- Expand who counts as a “controlling individual” and add several layers of background checks, site visits, financial safeguards, and mandatory compliance practices.
Key definitions introduced or clarified
- Controlling individual: broad definition of who controls a provider (owners, certain officers, authorized agents, compliance officers, managerial officials, and certain board roles). There are specific exclusions (e.g., banks, state/federal officials in some cases, small shareholders, certain tax-exempt entities, etc.).
- Managerial official: someone with decisionmaking authority over the program’s operation and its ongoing management or policies; a site director with no ownership is not automatically a managerial official.
Main provisions and what they accomplish
- Provider enrollment and background checks
- Enroll providers and each provider-controlled location before offering direct services.
- Require pre-enrollment and post-enrollment checks, including background studies and fingerprinting for anyone with ownership or control interest.
- Revalidate enrollment every few years (typical providers every 5 years; CFSS, EIDBI, and some high-risk categories every 3 years).
- Improve responsiveness requirements: if information is missing, providers have a set window to respond or enrollment can be denied.
- Risk-based provider designations
- Categorize provider types as limited-risk, moderate-risk, or high-risk using CMS criteria; publish the list and criteria in the Minnesota Health Care Program Provider Manual.
- Designations influence what checks, site visits, and oversight apply.
- Site visits and location enrollment
- Require unannounced on-site inspections for enrolled locations.
- Conduct site visits before paying the first claim, within 12 months of the provider beginning to bill, and before revalidating.
- Financial safeguards
- Require surety bonds for certain provider types (e.g., DMEPOS and other high-risk providers) with specific bond amounts depending on enrollment type and prior Medicaid revenue.
- Require cash reserves for providers as a condition of enrollment (minimum amount or a percentage of recent Medicaid payments).
- Compliance programs and officer responsibilities
- Some providers must designate a compliance officer.
- Compliance officers must develop policies and procedures to ensure MA laws are followed, train staff, respond to improper conduct, monitor compliance, report violations, and arrange for recovery of overpayments within 60 days of discovery.
- Ensures core CMS elements for a provider’s compliance program are in place where required.
- Oversight, reporting, and enforcement
- Annual reporting by the state agency (DHS) detailing MA operations, expenditures, and provider site visits by county.
- Allows suspension or termination of enrollment for noncompliance, insufficient documentation, or certain criminal convictions; some suspension actions are not subject to administrative appeal.
- Provides grounds to terminate enrollment if a provider or person with significant ownership is convicted of relevant offenses or has certain Medicare/Medicaid terminations.
- Requires ongoing enforcement tools (unannounced inspections, revalidation, and posting of high-risk designations).
Significant changes to existing law
- Broad expansion of who is considered a controlling individual, pulling in more officers, agents, and managerial roles under enrollment rules.
- Introduction of a formal, risk-based framework for provider enrollment and ongoing oversight (limited-, moderate-, and high-risk categories).
- New or strengthened requirements for:
- Background checks and fingerprinting
- Unannounced site visits and revalidation scheduling
- Surety bonds and cash reserves for various provider types
- Mandatory compliance programs with defined duties and timelines
- More frequent or focused oversight of high-risk providers
- Enhanced DHS reporting obligations and clearer enforcement pathways (including certain non-appealable suspension/termination actions).
Implementation and administration (who does what)
- Minnesota Department of Human Services (DHS) roles
- Classify provider risk levels and publish criteria
- Perform verifications, background checks, and background studies
- Conduct pre-enrollment, post-enrollment, and unannounced site visits
- Require and monitor bonds and cash reserves
- Oversee the revalidation process and sanctions for noncompliance
- Publish annual provider-related information in the MA Provider Manual
- Centers for Medicare and Medicaid Services (CMS) alignment
- Use CMS core elements for compliance programs and reference CMS standards in designations and requirements
Potential impacts
- For providers: higher administrative burden and potential cost increases (bonding, cash reserves, background checks, and compliance program requirements).
- For beneficiaries: tighter controls against improper claims and potential improvements in program integrity and service quality.
- For DHS and CMS: clearer, standardized oversight and enforcement tools, with more frequent verification and monitoring.
Plain-language overview
- The bill tightens who must be checked and monitored when enrolling in MA, adds stronger financial safeguards, requires formal compliance programs, increases oversight (including unannounced site visits), and gives DHS tools to suspend or terminate enrollment when providers do not meet requirements or fail to keep proper documentation.
Relevant terms
- controlling individual
- managerial official
- authorized agent
- compliance officer
- provider enrollment
- medical assistance (MA)
- background study
- fingerprinting
- pre-enrollment/post-enrollment checks
- revalidation
- unannounced site visit
- DMEPOS (durable medical equipment, prosthetics, orthotics, and supplies)
- surety bond
- cash reserves
- compliance program
- high-risk provider
- Minnesota Health Care Program Provider Manual
- CMS core elements
- risk levels (limited, moderate, high)
- licensing and licensure verifications
- preenrollment and postenrollment databases checks
- termination/suspension of enrollment
- administrative appeal (not always applicable)
Bill text versions
- Introduction PDF PDF file
Past committee meetings
- Human Services Finance and Policy on: February 26, 2026 08:15
Actions
| Date | Chamber | Where | Type | Name | Committee Name |
|---|---|---|---|---|---|
| February 17, 2026 | House | Action | Introduction and first reading, referred to | Human Services Finance and Policy | |
| March 05, 2026 | House | Action | Author added | ||
| March 26, 2026 | House | Action | Author added |
Citations
[
{
"analysis": {
"added": [
"Adds or clarifies individuals considered 'controlling' to include specified officers and agents."
],
"removed": [],
"summary": "Amends the definition of 'Controlling individual' for providers licensed under chapter 142B.",
"modified": [
"Updates the controlling individual concept to align with related licensing provisions."
]
},
"citation": "142B.01",
"subdivision": "8"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "References the designation of the authorized agent under section 142B.10, affecting who is recognized for enrollment purposes.",
"modified": [
"Consistency with other defined roles in provider enrollment and oversight."
]
},
"citation": "142B.10",
"subdivision": "1, paragraph b"
},
{
"analysis": {
"added": [
"Expands cross-references to CMS requirements for compliance officers."
],
"removed": [],
"summary": "Amends provider enrollment provisions related to the compliance officer and related responsibilities.",
"modified": [
"Harmonizes compliance officer duties with national standards."
]
},
"citation": "256B.04",
"subdivision": "21, paragraph g"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cross-reference to compliance officer definitions used elsewhere in 256B chapters.",
"modified": [
"Ensures uniform terminology across enrollment provisions."
]
},
"citation": "256B.044",
"subdivision": "8, paragraph b"
},
{
"analysis": {
"added": [
"Includes additional individuals in the controlling category for eligibility and enrollment."
],
"removed": [],
"summary": "Amends 'Controlling individual' definition for 245A licensure framework.",
"modified": [
"Coordinates 245A with 142B and other enrollment provisions."
]
},
"citation": "245A.02",
"subdivision": "5a"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Background study requirements referenced in provider enrollment across 245A providers.",
"modified": [
"Aligns background study references with CMS and state background check requirements."
]
},
"citation": "245A.04",
"subdivision": "1, paragraph b"
},
{
"analysis": {
"added": [
"Inclusion of annual reporting and related statistics and site visit information."
],
"removed": [],
"summary": "Annual report requirement updated for providers exercising MA enrollment.",
"modified": [
"Clarifies reporting expectations for the licensing agency."
]
},
"citation": "256B.04",
"subdivision": "5"
},
{
"analysis": {
"added": [
"New enrollment/categorization criteria in the 256B.0759 framework."
],
"removed": [],
"summary": "Adds provision affecting provider enrollment categorization under 256B.0759.",
"modified": [
"Updates provider risk assessment and enrollment conditions."
]
},
"citation": "256B.0759",
"subdivision": "4"
},
{
"analysis": {
"added": [
"Additional high-risk determinations tied to enrollment and bonding requirements."
],
"removed": [],
"summary": "Specifies additional high-risk provider criteria under 256B.0949.",
"modified": [
"Expands the scope of high-risk designations for fraud prevention."
]
},
"citation": "256B.0949",
"subdivision": "16"
},
{
"analysis": {
"added": [
"New criteria related to high-risk designation and CMS determinations."
],
"removed": [],
"summary": "Further criteria for high-risk designation and related Enrollment actions.",
"modified": [
"Strengthens oversight of high-risk roles in MA enrollment."
]
},
"citation": "256B.0949",
"subdivision": "17"
},
{
"analysis": {
"added": [
"Clarifies designation of primary provider of care in special family child care settings."
],
"removed": [],
"summary": "Defines the primary provider of care for a special family child care program under 142B.41(4)(d).",
"modified": [
"Improves clarity of responsibility for care provision."
]
},
"citation": "142B.41",
"subdivision": "4, paragraph d"
},
{
"analysis": {
"added": [
"Requires designation of a managerial staff person to oversee program management."
],
"removed": [],
"summary": "Program management and oversight provisions for licensed providers.",
"modified": [
"Strengthens oversight and accountability requirements in program management."
]
},
"citation": "245D.081",
"subdivision": "3"
},
{
"analysis": {
"added": [
"Explicit competency and training requirements for staff."
],
"removed": [],
"summary": "Staff competency and training requirements under 245D.09.",
"modified": [
"Aligns staff development with program oversight provisions."
]
},
"citation": "245D.09",
"subdivision": "4"
},
{
"analysis": {
"added": [
"Detailing orientation and training expectations."
],
"removed": [],
"summary": "Staff orientation and training provisions under 245D.09, subdivisions 4a and 5.",
"modified": [
"Refines staff preparation standards."
]
},
"citation": "245D.09",
"subdivision": "4a"
},
{
"analysis": {
"added": [
"Ongoing training requirements integrated into program operations."
],
"removed": [],
"summary": "Ongoing training requirements for program staff.",
"modified": [
"Strengthens ongoing staff development provisions."
]
},
"citation": "245D.09",
"subdivision": "5"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cross-references to 245D program oversight provisions.",
"modified": [
"Conforms oversight language with other sections."
]
},
"citation": "245D.07",
"subdivision": "7"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cross-reference to additional 245D program requirements.",
"modified": [
"Aligns related enforcement and oversight mechanisms."
]
},
"citation": "245D.071",
"subdivision": "71"
},
{
"analysis": {
"added": [
"Incorporates procedural requirements for reporting maltreatment and service delivery concerns."
],
"removed": [],
"summary": "Incorporates maltreatment reporting standards from 245A.65 into enrollment oversight.",
"modified": [
"Harmonizes maltreatment reporting with program oversight."
]
},
"citation": "245A.65",
"subdivision": ""
},
{
"analysis": {
"added": [
"Clarifies sanctions are not limited and may cover documentation failures."
],
"removed": [],
"summary": "Authority to sanction providers for noncompliance clarified.",
"modified": [
"Broadens enforcement discretion in enrollment sanctions."
]
},
"citation": "256B.064",
"subdivision": ""
},
{
"analysis": {
"added": [
"Formalizes revalidation timelines and procedures."
],
"removed": [],
"summary": "Provider Revalidation Subdivision 1 established in MA enrollment context.",
"modified": [
"Aligns revalidation with federal expectations."
]
},
"citation": "256B.0441",
"subdivision": "1"
},
{
"analysis": {
"added": [
"Outlines suspension and termination processes for noncompliance."
],
"removed": [],
"summary": "Provider enrollment suspensions and terminations authority clarified.",
"modified": [
"Standardizes enforcement actions."
]
},
"citation": "256B.0442",
"subdivision": "1"
},
{
"analysis": {
"added": [
"States bond requirements and exceptions across related sections."
],
"removed": [],
"summary": "Surety bond requirements and exemptions enumerated.",
"modified": [
"Harmonizes bonding obligations with related sections (256B.0659, 256B.0701, 256B.85)."
]
},
"citation": "256B.051",
"subdivision": ""
},
{
"analysis": {
"added": [
"Provides specific exemptions from bonding requirements."
],
"removed": [],
"summary": "Exemption provisions for surety bonds specified.",
"modified": [
"Consistent treatment of exemptions across bonding provisions."
]
},
"citation": "256B.0659",
"subdivision": ""
},
{
"analysis": {
"added": [
"Additional provider categories exempt from surety bonds."
],
"removed": [],
"summary": "Additional exceptions to bonding requirements (MA enrollment).",
"modified": [
"Integrates with 256B bonding framework."
]
},
"citation": "256B.0701",
"subdivision": ""
},
{
"analysis": {
"added": [
"Lists final set of exemptions linked to bonding rules."
],
"removed": [],
"summary": "Final bonding exceptions referenced in enrollment provisions.",
"modified": [
"Ensures cross-section consistency in bonding rules."
]
},
"citation": "256B.85",
"subdivision": ""
},
{
"analysis": {
"added": [
"Requires surety bond for DMEPOS suppliers meeting criteria under MA enrollment."
],
"removed": [],
"summary": "DMEPOS surety bond requirement linked to home care licensing.",
"modified": [
"Aligns bonding with federal provider standards."
]
},
"citation": "144A.484",
"subdivision": ""
},
{
"analysis": {
"added": [
"Incorporates cross-reference to licensing standards for ALFs."
],
"removed": [],
"summary": "References to assisted living facility licensing under chapter 144G in enrollment rules.",
"modified": [
"Promotes alignment of enrollment with licensing frameworks."
]
},
"citation": "144G",
"subdivision": ""
},
{
"analysis": {
"added": [
"Notes tax-exempt status considerations in enrollment.\n"
],
"removed": [],
"summary": "Tax status reference for provider organizations; exemptions relevant to enrollment.",
"modified": [
"Links tax status to provider eligibility criteria."
]
},
"citation": "80A.45",
"subdivision": ""
},
{
"analysis": {
"added": [
"Cites tax-exemption clauses informing enrollment eligibility."
],
"removed": [],
"summary": "Additional tax-exemption references affecting enrollment.",
"modified": [
"Ensures consistent treatment of tax-exempt organizations."
]
},
"citation": "80A.46",
"subdivision": ""
},
{
"analysis": {
"added": [
"Cross-reference to tax-exempt status under 290.05 in enrollment context."
],
"removed": [],
"summary": "Exemption provisions for organizations exempt from taxation.",
"modified": [
"Consolidates tax-exemption references in provider enrollment provisions."
]
},
"citation": "290.05",
"subdivision": ""
},
{
"analysis": {
"added": [
"Incorporates CMS Part 455 Subpart E screening requirements."
],
"removed": [],
"summary": "Federal enrollment screening standards referenced for providers.",
"modified": [
"Aligns state enrollment with federal background check standards."
]
},
"citation": "42 CFR 455 Subpart E",
"subdivision": ""
},
{
"analysis": {
"added": [
"Mandates federal-regulation-based license verifications prior to enrollment."
],
"removed": [],
"summary": "Background checks and licensure verifications referenced per federal regulation.",
"modified": [
"Syncs state background study requirements with federal standards."
]
},
"citation": "42 CFR 455.412",
"subdivision": ""
},
{
"analysis": {
"added": [
"Requires ongoing database checks to maintain enrollment eligibility."
],
"removed": [],
"summary": "Pre-enrollment and postenrollment database checks aligned with federal standard.",
"modified": [
"Ensures continuous compliance with federal enrollment criteria."
]
},
"citation": "42 CFR 455.436",
"subdivision": ""
},
{
"analysis": {
"added": [
"Uses CMS designation criteria in state provider manual for risk categorization."
],
"removed": [],
"summary": "CMS designation list and criteria for Medicare provider designations incorporated.",
"modified": [
"Formalizes use of Medicare-based provider categories in MA enrollment."
]
},
"citation": "42 CFR 424.518",
"subdivision": ""
},
{
"analysis": {
"added": [
"Mandates background study review and fingerprinting where applicable."
],
"removed": [],
"summary": "Background study requirements under chapter 245C specified for enrollment.",
"modified": [
"Harmonizes background study protocols across provider types."
]
},
"citation": "245C.08",
"subdivision": "1"
},
{
"analysis": {
"added": [
"Unannounced site visit requirements tied to revalidation schedule."
],
"removed": [],
"summary": "Site visit requirements for provider locations prior to revalidation.",
"modified": [
"Strengthens on-site oversight preceding revalidation."
]
},
"citation": "256B.044 subdivision 4",
"subdivision": ""
}
]Progress through the legislative process
In Committee