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You are receiving this message as an HCBS provider to provide you updated information on a new state law prohibiting kickbacks in Medicaid and other publicly funded programs. While examples below apply to ICS, kickbacks are illegal in any type of HCBS program.
On June 14, 2025, Governor Walz signed a package of anti-fraud measures that included an anti-kickback law. This anti-kickback law went into effect on August 1, 2025, and makes it illegal in the state of Minnesota for service providers to financially incentivize individuals to sign up for ICS services. The new law also prohibits service providers from financially incentivizing entities to refer individuals. Kickbacks have long been illegal at the federal level, and as of August 1, 2025, state agencies are now empowered to more directly intervene when they uncover kickbacks, rather than waiting on federal agencies.
Knowingly participating in a kickback is fraud. Kickback schemes exploit the Medicaid program, can create worse outcomes for recipients, and erode public trust in Medicaid. If you are aware of a kickback scheme or of any other form of fraud, waste or abuse, you can report by filling out the Program Integrity Oversight team’s hotline form, by calling 1-800-657-3750, or by emailing OIG.investigations.DHS@state.mn.us. DHS keeps all reporters’ names confidential, even after an investigation is complete. Anyone who reports fraud in good faith is immune from civil or criminal liability that might otherwise arise from reporting or participating in the investigation. If a provider or an individual is found to have been involved in providing a kickback, they could face an administrative action against their license or Medicaid enrollment, civil penalties, or even criminal charges if the conduct is found by law enforcement to have violated the criminal kickback statute under section 609.542.
Examples of Potential Kickbacks in ICS Programs
- Giving a recipient a onetime or recurring cash payment for choosing the 245D license holder to provide their ICS services
- Covering or paying a portion of a recipient’s rent if they use the 245D license holder to provide ICS services or to commit to a certain number of ICS service hours per week or per day
- Using a sliding rent scale, based upon the number of ICS service hours per week or per day
- Allowing friends or family members to live in the ICS setting. These friends or family members typically do not need or receive ICS services but may need a place to live, and the 245D license holder provides a living space while billing Medicaid for unnecessary ICS services.
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