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Housing Stabilization Services (HSS) has been a life-changing resource for many Minnesotans since its launch in summer 2020. As the program has grown, certain challenges have come to light, prompting leadership and state legislators to take action to strengthen the program — ensuring participants receive high-quality services and taxpayer dollars are used responsibly.
In May, the Minnesota Department of Human Services (DHS) announced that it would tighten screening requirements for providers who bill Medicaid for HSS starting June 1, 2025. Then, in June, legislators agreed to a series of reforms intended to improve oversight, strengthen anti-fraud efforts, and increase program integrity.
Below is key information for providers regarding the recent changes.
Increased screening level
The federal government sets three levels of screening for providers who bill Medicaid: limited, moderate and high risk. States may choose to move providers into higher risk categories, and on June 1, Minnesota re-categorized Housing Stabilization Services as a “high risk” provider type.
The change will strengthen oversight by:
- Mandating enhanced fingerprint background studies for owners
- Requiring screening visits before Medicaid enrollment and when enrollment is renewed
- Allowing DHS to make unannounced site visits.
New providers will need to comply with the requirements beginning June 1, 2025. Existing providers will be phased into the new requirements when they renew their Medicaid enrollment.
Legislative changes
On June 14, 2025, Gov. Tim Walz signed into law a budget that includes a strong slate of strategies to better detect, investigate and penalize fraud. These strategies include increased screening and enhanced oversight activities, using new technology to detect fraud, strengthening investigation authority, and tightening regulatory oversight. These changes will not only provide new tools for protecting taxpayer dollars – they will also help ensure that providers are offering high-quality services to Minnesotans in need.
One key change involves the requirement to conduct pre-enrollment risk assessments (PERA).
Starting July 1, 2025, all new and current providers must complete a pre-enrollment risk assessment. Any housing stabilization services provider enrolled before July 1, 2025, that billed for services on or after January 1, 2024, must complete the pre-enrollment risk assessment on a schedule determined by the commissioner and no later than July 1, 2026, to remain eligible. Any provider enrolled before July 1, 2025, that has not billed for services on or after January 1, 2024, must complete the pre-enrollment risk assessment to remain eligible. Additional information on the PERA process will be provided soon.
Below are other legislative changes that will affect HSS providers:
- HSS owners and managers involved in day-to-day operations will be required to complete a compliance class before enrolling that includes training on billing, documentation and service delivery requirements; enrollment requirements; provider program integrity, including fraud prevention, detection and penalties; and more.
- Owners with at least 5% ownership stake in the provider, operators of the provider, and employees and volunteers for the provider who have direct contact with people receiving services will need to complete a DHS background study.
- Increased documentation requirements will require recipients to provide a signature verifying the accuracy of services being billed.
- Providers must show proof of a surety bond. Upon new enrollment, or if the provider’s Medical Assistance revenue in the previous calendar year is $300,000 or less, the provider agency must purchase a surety bond of $50,000. If the provider’s Medical Assistance revenue in the previous year is over $300,000, the provider agency must purchase a surety bond of $100,000.
- Providers must provide HSS services using employees of the agency and not by using a subcontractor or reporting agent. “Employee” does not include an independent contractor.
- All controlling individuals and employees of an agency must complete annual vulnerable adult training.
- Pending federal approval, billing limits will be capped at 100 hours annually per recipient. Remote support will be limited to no more than 20% of transition and sustaining services provided to a client in a calendar month and limited to audio-only and accessible video-based platforms. If a recipient requires services exceeding these limits, a provider may request authorization for additional hours in a format prescribed by the commissioner.
The Housing Stabilization Services team at the Minnesota Department of Human Services is committed to working with providers to help them navigate these new requirements. In the coming months, the HSS team will host a webinar to answer questions about the new program requirements.
Thank you for your continued dedication to serving Minnesotans, and for your patience as we all adjust to these important program changes. The work you do is saving lives and improving communities across Minnesota, and we are proud to partner with you in the fight to end homelessness in our state.
Please email dhshousingstabilization@state.mn.us if you have questions about this message.
Visit our webpage for more information about Housing Stabilization Services.
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