HF3546

Program integrity requirements for high-risk provider types under medical assistance established, and report required.
Legislative Session 94 (2025-2026)

Related bill: SF4071

AI Generated Summary

Purpose

Strengthen program integrity for medical assistance by adding stricter rules for high-risk providers. The bill creates new definitions, enrollment checks, oversight requirements, and enforcement tools to reduce fraud, waste, and abuse in Minnesota’s Medicaid program.

Main provisions and intent

Define who is a controlling individual
- Expands who counts as a controlling individual to include owners, officers (CEO/CFO), authorized agents, compliance officers, and other managerial officials.
- Includes criteria to exclude certain entities and individuals (e.g., banks, many government officials, some small shareowners, or exempt organizations) from the definition.
- Establishes that “managerial official” is someone with decision-making authority and ongoing management responsibilities; clarifies that a site director with no ownership is not automatically a managerial official.
Strengthen program management for licensed providers
- Requires license holders to designate a managerial staff person or team to oversee program management.
- The designated manager is responsible for understanding licensing requirements, ensuring duties are fulfilled, implementing corrective actions after incident reviews, evaluating service quality and rights protections, ensuring staff competency and training, and driving ongoing program improvements.
- The designated manager must be competent and have at least three years of supervisory experience in relevant care or education settings.
Provider enrollment, background checks, and revalidation
- Revisions to provider enrollment include background studies (fingerprint-based or equivalent), with review of state/federal databases.
- High-risk providers or those with material ownership interests must consent to criminal background checks when required by law or CMS.
- Introduces or strengthens revalidation schedules (e.g., every five years for most providers, every three years for CFSS-related providers and certain agencies, with CMS-designated high-risk categories potentially revalidated more frequently).
- Requires provider locations to enroll where direct services are provided; enhances handling of incomplete enrollment applications; imposes timeframes for submitting information and for responding to deficiencies.
Surety bonds for certain providers
- Durable Medical Equipment (DME) providers and suppliers must purchase surety bonds, with amounts tied to revenue or a fixed minimum, and with DHS as the obligee.
- Exceptions apply for certain types of providers (e.g., Indian Health Service, FQHCs, pharmacies, rural health clinics, etc.).
- The bond is intended to cover costs and fees related to claims and enforcement actions; recovery periods are defined; bonding requirements can be waived if an existing bond meets other state requirements.
Compliance programs and on-site inspections
- DHS may require providers to implement CMS-core-compliance programs, including:
- Designating a compliance officer (or equivalent) to develop policies, train staff, respond to improper conduct, monitor compliance, and report overpayments within a set timeframe.
- Using evaluation techniques to monitor adherence to medical assistance laws.
- Prompt reporting of violations to DHS and repayment of identified overpayments.
- DHS or CMS-designated agents may conduct unannounced on-site inspections of provider locations (with requirements to publish designated high-risk provider lists for reference).
Enrollment moratorium, prepayment review, and payment controls for high-risk providers
- When CMS or DHS designates a provider type as high-risk, DHS must issue an enrollment moratorium within 15 days, lasting up to 24 months.
- Prepayment review of fee-for-service claims for high-risk providers must be established within 15 days and last up to 24 months; must comply with federal timely claims processing rules.
- CMS-designated high-risk status may allow DHS or CMS to withhold payments during the enrollment process or as allowed by law.
- High-risk providers may be subject to ongoing enrollment conditions, with potential denial or suspension for noncompliance, and possible termination for pattern of missing documentation or failure to meet requirements.
Revalidation and suspension/termination procedures
- Revalidation schedules and procedures are specified, including notice requirements, deficiency timelines, and suspension with no right to an appeal for certain enrollment actions.
- DHS may suspend or terminate enrollment for lack of documentation or noncompliance, with defined patterns (e.g., multiple occasions of missing documentation).
Alignment with federal rules and provider manuals
- The bill requires alignment with CMS core elements and places certain designations and procedures outside some typical state appeal processes.
- It references the Minnesota Health Care Program Provider Manual for provider type designations and criteria.

Significant changes to existing law

Expanded definition of controlling individuals and managerial officials, increasing accountability for more people involved in provider operations.
New and enhanced requirements for program management oversight, including a qualified designated manager with defined duties and experience.
Stronger enrollment and oversight for providers through:
- Mandatory background studies and fingerprint checks for high-risk providers.
- Structured revalidation timelines.
- Required compliance officers and formal compliance programs.
- Unannounced on-site inspections and annual or periodic prepayment reviews for high-risk providers.
Introduction of risk-based enrollment actions:
- Provider enrollment moratorium for high-risk categories (up to 24 months).
- Ability to withhold or suspend payments during enrollment actions.
- Mandatory surety bonds for certain DMEPOS providers, with specific bond amounts and exemptions.
New enforcement tools for high-risk providers:
- Clear suspension/termination authorities for documentation gaps or noncompliance.
- Prepayment review and moratorium provisions intended to curb fraudulent, wasteful, or abusive practices.
Increased use of CMS guidelines and federal rules in state enforcement and provider oversight.

Relevant terms

highrisk providers
moderate-risk providers
limited-risk providers
provider enrollment
background studies / fingerprinting
revalidation
controlling individual
managerial official
compliance officer
compliance program (CMS core elements)
on-site inspections (unannounced)
prepayment review
enrollment moratorium
withhold payments
durable medical equipment and supplies (DMEPOS)
surety bond
Centers for Medicare and Medicaid Services (CMS)
Minnesota Department of Human Services (DHS)
Minnesota Health Care Program Provider Manual
pattern of lack of documentation
authorization / disclosures for compliance

Relevant Terms highrisk, enrollment moratorium, prepayment review, background studies,Fingerprinting, surety bond, DMEPOS, compliance officer, CMS core elements, on-site inspections, provider enrollment, revalidation, managerial official, controlling individual, DHS, Minnesota Health Care Program Provider Manual.

Bill text versions

Introduction PDF PDF file

Past committee meetings

Human Services Finance and Policy on: March 17, 2026 08:15

Actions

Date	Chamber	Where	Type	Name	Committee Name
February 19, 2026	House		Action	Introduction and first reading, referred to	Human Services Finance and Policy

Citations

[
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Defines Controlling individual for providers licensed under chapter 142B, enumerating who qualifies (owners, officers, compliance officer, etc.).",
      "modified": []
    },
    "citation": "142B.01",
    "subdivision": "8"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Provides a Controlling individual definition for provider licensing under chapter 245A, mirroring changes in 142B.01.",
      "modified": []
    },
    "citation": "245A.02",
    "subdivision": "5a"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Secures program management and oversight requirements for license holders under 245D.081, including designation of a managerial staff person and duties.",
      "modified": []
    },
    "citation": "245D.081",
    "subdivision": "3"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Amends provisions related to provider enrollment/high-risk designation under 256B.0949 (subdivision 17).",
      "modified": []
    },
    "citation": "256B.0949",
    "subdivision": "17"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Provider enrollment provisions; background checks, enrollment screening, and background studies aligned with CMS requirements.",
      "modified": []
    },
    "citation": "256B.04",
    "subdivision": "21"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Adds or modifies requirements related to provider enrollment or related oversight under 256B.0759, subdivision 4.",
      "modified": []
    },
    "citation": "256B.0759",
    "subdivision": "4"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Amends 256B.0949, subdivision 16, in the context of provider enrollment/high-risk provider framework.",
      "modified": []
    },
    "citation": "256B.0949",
    "subdivision": "16"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References the authorized agent under section 142B.10, subsection 1, paragraph b, relevant to controlling individuals or compliance officers.",
      "modified": []
    },
    "citation": "142B.10",
    "subdivision": "1"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Provider enrollment provisions citing background checks and compliance officer requirements under 245A.04, subdivision 1, paragraph b.",
      "modified": []
    },
    "citation": "245A.04",
    "subdivision": "1"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Background studies for enrollment under 245C.08, including references to fingerprinting and databases.",
      "modified": []
    },
    "citation": "245C.08",
    "subdivision": "1"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Defines incident and emergency reporting requirements and related program evaluations under 245D.11, subdivision 2, clause 7.",
      "modified": []
    },
    "citation": "245D.11",
    "subdivision": "2"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Internal review and protections relating to maltreatment reporting and service delivery under 245A.65, subdivision 1.",
      "modified": []
    },
    "citation": "245A.65",
    "subdivision": "1"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Provider enrollment: designates risk levels and enrollment requirements mirroring CMS criteria (limited/moderate/high risk).",
      "modified": []
    },
    "citation": "256B.0441",
    "subdivision": "1"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Provider enrollment: outlines revalidation procedures and timelines for high-risk provider types.",
      "modified": []
    },
    "citation": "256B.0441",
    "subdivision": "2"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Provider enrollment: delineates requirements for submission of materials and consequence for deficiencies.",
      "modified": []
    },
    "citation": "256B.0441",
    "subdivision": "3"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Provider enrollment: background studies requirements and criminal background checks for high-risk providers.",
      "modified": []
    },
    "citation": "256B.0441",
    "subdivision": "4"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Provider enrollment suspensions: general authority to suspend enrollment for noncompliance.",
      "modified": []
    },
    "citation": "256B.0442",
    "subdivision": "1"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Provider enrollment: revocation for lack of documentation or access to documentation.",
      "modified": []
    },
    "citation": "256B.0442",
    "subdivision": "2"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Provider enrollment: termination or denial duties for entities terminated from Medicare/Medicaid participation; exemptions for certain rehab providers.",
      "modified": []
    },
    "citation": "256B.0442",
    "subdivision": "3"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Program integrity for high-risk providers: provider enrollment moratorium when CMS designates high risk.",
      "modified": []
    },
    "citation": "256B.0443",
    "subdivision": "1"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Program integrity for high-risk providers: post-designation prepayment review for high-risk categories.",
      "modified": []
    },
    "citation": "256B.0443",
    "subdivision": "2"
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Acknowledges CMS/agency sanction authority under 256B.064 for certain providers.",
      "modified": []
    },
    "citation": "256B.064",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Note that certain provisions designated by the bill are not subject to the requirements of statute chapter 14.386.",
      "modified": []
    },
    "citation": "14.386",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Federal requirement: enrollment screening and provider background checks alignment with CMS Title 42 CFR Part 455 Subpart E.",
      "modified": []
    },
    "citation": "42 CFR 455 Subpart E",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "CMS designation criteria for provider risk levels and associated standards (Medicare provider designations referenced).",
      "modified": []
    },
    "citation": "42 CFR 424.518",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Timely processing of claims requirements referenced for prepayment review of high-risk providers.",
      "modified": []
    },
    "citation": "42 CFR 447.45",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Specifies surety bond requirements for certain providers; CMS guidelines referenced at bonding level.",
      "modified": []
    },
    "citation": "42 CFR 455.450",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Surety bond requirements specified for high-risk providers; thresholds based on Medicaid payments or fixed amount.",
      "modified": []
    },
    "citation": "256B.0659",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Existing bonding requirements for certain providers; cross-reference in the provider enrollment governance.",
      "modified": []
    },
    "citation": "256B.051",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Bonding and enrollment provisions cross-referenced with 256B.0701; related to provider risk mitigation.",
      "modified": []
    },
    "citation": "256B.0701",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Bonding requirements and related enrollment provisions referenced under 256B.85.",
      "modified": []
    },
    "citation": "256B.85",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Home care license framework; DMEPOS and home health provisions linked to provider enrollment filings.",
      "modified": []
    },
    "citation": "144A.484",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Chapter 144G referenced concerning home and community-based services designation for licensed providers.",
      "modified": []
    },
    "citation": "144G",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Tax-exemption reference for certain organizations noted in provider definitions.",
      "modified": []
    },
    "citation": "290.05",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Tax/organization exemption reference used in defining ownership and beneficial interests for controlling individuals.",
      "modified": []
    },
    "citation": "80A.45",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Exemption provisions related to tax status referenced in ownership interest exclusions for controlling individuals.",
      "modified": []
    },
    "citation": "80A.46",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Reference to Minnesota Statutes Chapter 14 generally; not a specific subchapter but cited in relation to administrative appeals.",
      "modified": []
    },
    "citation": "14",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "References to program evaluations and service delivery under 245D.07; paired with 245D.071 for outcomes.",
      "modified": []
    },
    "citation": "245D.07",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Program evaluation and outcomes tied to 245D.071; used for monitoring service delivery and progress.",
      "modified": []
    },
    "citation": "245D.071",
    "subdivision": ""
  },
  {
    "analysis": {
      "added": [],
      "removed": [],
      "summary": "Federal bonding and enrollment-related requirements referenced via CMS guidance.",
      "modified": []
    },
    "citation": "42 CFR § 455.450",
    "subdivision": ""
  }
]

Progress through the legislative process

17%

In Committee