SF4071
High-risk provider types under medical assistance program integrity requirements establishment provision
Legislative Session 94 (2025-2026)
Related bill: HF3546
AI Generated Summary
Purpose
This bill adds new rules and oversight to strengthen program integrity for high‑risk provider types in Minnesota’s Medical Assistance (Medicaid) program. It aims to prevent fraud, waste, and abuse by tightening how providers enroll, operate, and are monitored.
Key definitions and who is affected
- Controlling individual: who must be treated as a program’s controlling person. This includes owners, officers (like CEO and CFO), a designated authorized agent, a compliance officer, managers, and certain board leaders. Certain people and organizations are excluded (for example, some banks and government officials) unless they also have ownership or management roles.
- Managerial official: someone with decision‑making authority and ongoing responsibility for program operations or policies. A site director with no ownership may not count.
- High‑risk providers: provider types that CMS or the state designates as high risk for fraud or abuse, which triggers extra rules (enrollment moratorium, prepayment review, etc.).
Main provisions and objectives
Program oversight and management
- License holders must designate a managerial staff person to oversee program management and compliance.
- The designated manager must ensure understanding of licensing rules, fulfill duties for incident review, staff training, corrective actions, ongoing program improvements, and protecting clients’ rights.
- The designated manager must be competent (education/training) and have at least three years of supervisory experience in a relevant program.
Provider enrollment, background checks, and revalidation
- The commissioner will enroll providers and conduct background studies, including fingerprint‑based checks, for high‑risk providers.
- Revalidation (rechecking) is required at set intervals: every five years for most providers, three years for personal care assistance CFSS providers and certain EIDBI/behavioral programs, and for any other high‑risk category as CMS/commissioner designates.
- If information is requested, providers must respond within set timeframes; failure can lead to suspension of the ability to bill.
- Electronic communication and correspondence may be used for notifications.
Financial protection through surety bonds
- Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) providers must purchase a surety bond, with amounts based on revenue and category (starting around $50,000, up to $100,000, or higher if needed).
- Bonds are renewable and name the Department of Human Services as the obligee. They must allow recovery of costs and fees.
- Some providers are exempt (e.g., certain centers or clinics listed in statute).
- The department can require a bond if a provider fails to show financial viability or there is significant fraud risk.
Prepayment review and payment safeguards
- For high‑risk provider types, the state (and CMS) can impose prepayment review of fee‑for‑service claims for up to 24 months.
- Prepayment review must follow federal rules for timely claim processing.
- The state may withhold payments during high‑risk designation or if noncompliance is found, and withholding decisions are generally not subject to appeal.
Unannounced on‑site inspections and monitoring
- Designated high‑risk providers may be subject to unannounced on‑site inspections by CMS or its agents and the state, at any location where services are delivered.
Compliance programs and the compliance officer
- The state may require certain providers to have a formal compliance program modeled on CMS core elements.
- If a provider designates a compliance officer, that person must develop and enforce policies, train staff, respond to improper conduct, monitor compliance, and report violations promptly (within 60 days for overpayments and related actions).
Enrollment moratoriums and enforcement actions
- If CMS or the state designates a provider type as high‑risk, the state must impose an enrollment moratorium on new enrollments in that category for up to 24 months.
- Before ending the moratorium, the state must revalidate all providers in that category.
- The state may revoke enrollment for patterns of missing documentation or noncompliance, with an emphasis on preventing improper billing.
Termination, denial, and risk‑based exclusions
- Providers terminated from Medicare/Medicaid or similar programs in other states can be denied enrollment, with some exemptions for certain rehab agencies meeting specific criteria.
- The rules also cover situations where providers fail to maintain documentation or refuse access to requested records.
Provider control and location rules
- The bill requires enrollment for each provider‑controlled location where direct services are provided.
Significant changes to existing law
- Expands who counts as a “controlling individual” and adds a formal “managerial official” category with explicit duties.
- Introduces mandatory program oversight roles (designated managers and compliance officers) across certain provider types.
- Creates explicit background study, fingerprinting, and revalidation timelines for high‑risk providers.
- Establishes mandatory prepayment review and potential payment withholds for high‑risk providers.
- Creates mandatory surety bonds for DMEPOS providers, with tiered bond amounts and specific recovery provisions.
- Enables unannounced CMS and state on‑site inspections of high‑risk locations.
- Introduces enrollment moratoriums for high‑risk provider types and requires revalidation before lifting them.
- Requires compliance programs with core CMS elements and ongoing monitoring/reporting duties.
- Tightens rules around documentation, pattern findings, and enrollment termination for noncompliance.
How this would be implemented
- The Minnesota Department of Human Services (DHS) would administer these changes, with guidance and criteria aligned to CMS and federal regulations.
- Provider manuals would include lists of high‑risk provider types and the applicable risk levels; providers would undergo enhanced background checks, revalidation, and, for some, post enrollment obligations like bonds and compliance programs.
- CMS oversight would play a role in designating high‑risk categories and approving certain actions (like on‑site inspections and prepayment reviews).
Potential impacts
- Providers may face more rigorous enrollment, monitoring, and financial requirements (bonds, prepayment reviews, compliance programs).
- High‑risk providers could experience enrollment pauses and payment holds, with heightened scrutiny and faster reporting requirements.
- Closer oversight could reduce improper billing and improve protections for patients.
Summary of notable terms from the bill
- highrisk
- provider enrollment
- background study / background checks / fingerprinting
- revalidation
- prepayment review
- CMS / Centers for Medicare and Medicaid Services
- unannounced onsite inspections
- compliance program
- compliance officer
- controlling individual
- managerial official
- enrollment moratorium
- withhold payments / withholding
- pattern of documentation
- durable medical equipment (DME) / DMEPOS
- surety bond
- provider location / provider controlled location
- CFSS (Community First Services and Supports)
- EIDBI (Early Intensive Developmental and Behavioral Intervention)
Relevant Terms highrisk, provider enrollment, background study, fingerprinting, revalidation, prepayment review, CMS, Centers for Medicare and Medicaid Services, on-site inspections, compliance officer, compliance program, controlling individual, managerial official, enrollment moratorium, withhold payments, DMEPOS, surety bond, provider location, CFSS, EIDBI, medical assistance, Medicaid, pattern of documentation, termination, suspension, accountability, improper billing
Bill text versions
- Introduction PDF PDF file
Actions
| Date | Chamber | Where | Type | Name | Committee Name |
|---|---|---|---|---|---|
| March 02, 2026 | Senate | Action | Introduction and first reading | ||
| March 02, 2026 | Senate | Action | Referred to | Health and Human Services |
Citations
[
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 142B.01 Subd.8 in defining Controlling individual for licensing and program integrity requirements.",
"modified": []
},
"citation": "142B.01",
"subdivision": "8"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 245A.02 Subd.5a related to Controlling individual for service providers.",
"modified": []
},
"citation": "245A.02",
"subdivision": "5a"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 245D.081 Subd.3 concerning program management and oversight.",
"modified": []
},
"citation": "245D.081",
"subdivision": "3"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 256B.0949 Subd.17 in relation to high-risk provider provisions.",
"modified": []
},
"citation": "256B.0949",
"subdivision": "17"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 256B.04 Subd.21 (provider enrollment) as basis for enrollment and background checks.",
"modified": []
},
"citation": "256B.04",
"subdivision": "21"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 256B.0759 Subd.4 in the context of provider enrollment and oversight.",
"modified": []
},
"citation": "256B.0759",
"subdivision": "4"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 256B.0949 Subd.16 regarding high-risk provider requirements.",
"modified": []
},
"citation": "256B.0949",
"subdivision": "16"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 144A.484 regarding surety bonds for DME providers when enrolling in Medicaid.",
"modified": []
},
"citation": "144A.484",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes Chapter 144G related to assisted living facility licensing and designation of home care licenses.",
"modified": []
},
"citation": "144G",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites federal regulation 42 CFR 455.450 regarding provider enrollment background checks and high-risk designations.",
"modified": []
},
"citation": "42 CFR 455.450",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites federal regulation 42 CFR 424.518 as the basis for Medicare provider enrollment determinations.",
"modified": []
},
"citation": "42 CFR 424.518",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites federal regulation 42 CFR 447.45 regarding timely processing of claims in prepayment review.",
"modified": []
},
"citation": "42 CFR 447.45",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 245C.08 Subd.1 (background studies) in enrollment provisions.",
"modified": []
},
"citation": "245C.08",
"subdivision": "1"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 245A.04 Subd.1 in context of background checks and compliance officer requirements (paragraphs b and e referenced).",
"modified": []
},
"citation": "245A.04",
"subdivision": "1"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 245D.11 Subd.2 (incident and maltreatment reporting and review requirements).",
"modified": []
},
"citation": "245D.11",
"subdivision": "2"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 245D.07 (program evaluation and service delivery requirements).",
"modified": []
},
"citation": "245D.07",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 245D.071 (outcome and progress evaluation provisions).",
"modified": []
},
"citation": "245D.071",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 14.386 regarding limitations on administrative appeals related to provider designations.",
"modified": []
},
"citation": "14.386",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 256B.064 (sanctions for providers) in relation to enrollment and participation.",
"modified": []
},
"citation": "256B.064",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 256B.051 (surety bonds/participation) in provider enrollment context.",
"modified": []
},
"citation": "256B.051",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 256B.0659 in relation to surety bonds for enrollment and ongoing participation.",
"modified": []
},
"citation": "256B.0659",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 256B.0701 in connection with surety bonds and provider enrollment.",
"modified": []
},
"citation": "256B.0701",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 256B.85 in relation to limitations on enrollment actions and exemptions.",
"modified": []
},
"citation": "256B.85",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 256B.0441 (Provider Revalidation) governing provider revalidation schedules and procedures.",
"modified": []
},
"citation": "256B.0441",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 256B.0442 (Provider Enrollment Suspensions and Terminations) governing suspension and termination procedures.",
"modified": []
},
"citation": "256B.0442",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 256B.0443 (Program Integrity for High-Risk Providers) detailing enrollment moratorium and compliance requirements.",
"modified": []
},
"citation": "256B.0443",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 290.05 (organization exemption) as part of tax-exemption references related to provider designations.",
"modified": []
},
"citation": "290.05",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 80A.45 related to bonds/financial requirements for providers in enrollment context.",
"modified": []
},
"citation": "80A.45",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 80A.46 related to transactions for provider enrollment and compliance.",
"modified": []
},
"citation": "80A.46",
"subdivision": ""
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 245A.65 Subd.1 (appeals and enforcement procedures) in maltreatment/safety contexts.",
"modified": []
},
"citation": "245A.65",
"subdivision": "1"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 245A.04 Subd.1 regarding background checks and compliance officer requirements (continued in 245A.04 cross-reference with other sections).",
"modified": []
},
"citation": "245A.04",
"subdivision": "1"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "Cites Minnesota Statutes 256B.04 Subd.21 paragraph g (controlling individual exclusions/definitions) within the provider enrollment context.",
"modified": []
},
"citation": "256B.04",
"subdivision": "21 paragraph g"
}
]Progress through the legislative process
In Committee