News from DHS for February 2026

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NEWS FROM DHS

February 2026

News from DHS archive

In this issue:


Governor announces comprehensive anti-fraud package

Commissioner Gandhi with Gov. Walz, James Clark and John Connolly at the anti-fraud package announcement

On Feb. 26, Governor Tim Walz introduced a comprehensive legislative package aimed at preventing, detecting, investigating, and holding accountable those who commit fraud in Minnesota’s state programs.

“Fraud steals from the people of Minnesota and undermines the programs we all rely on,” said Governor Walz. “This package strengthens oversight, improves detection, expands enforcement, and increases penalties to protect every dollar Minnesotans depend on. We’ve followed the experts, audits, and proven roadmaps; now it’s time for the Legislature to act.”

The Governor was joined by Department of Human Services (DHS) Commissioner Shireen Gandhi, DHS Inspector General James Clark, DHS Deputy Commissioner and State Medicaid Director John Connolly, and Bureau of Criminal Apprehension (BCA) Superintendent Drew Evans.  

Commissioner Gandhi sees an opportunity to make Minnesota a national model for combatting fraud, waste and abuse. “Governor Walz is leading that effort, and for the past year I have been working to do this, and I will continue to accelerate change within DHS to prevent and fight fraud," she said.

More details are in the Governor's news release.


​​Minnesota advances work on Medicaid anti-fraud systems

Work to update Minnesota’s Medicaid claims processing systems using advanced analytics has cleared its first hurdle. The state expects to have a complete pre-payment review process in place by the end of the year.

Over the last three months, Optum has been working with the department to develop an automated system to review fee-for-service Medicaid claims before they are paid, flagging items that need additional review before they are paid.

To guide that work, the company reviewed nearly four years of past Medicaid claims in 14 high-risk services to test software algorithms. Optum also reviewed Minnesota’s policies for paying Medicaid claims. While the first phase of that work is complete, the testing found areas where the state and Optum need to revise some data sets for the system and consider policy updates to improve efficiency. 

More information is in a department news release.


​​State kicks off big push to inspect Medicaid providers​​

Minnesota officials are beginning a massive statewide push to ensure Medicaid providers in 13 high-risk services have the qualifications required by law.

Revalidation of Medicaid eligibility is done for all providers on a regular basis. The process involves a review of the provider’s paperwork and billing and is followed up with an unannounced site visit. 

“Performing an unannounced site visit on every provider in 13 high-risk services is a major step forward in ensuring Minnesota’s Medicaid providers are of high-quality and meet the requirements of the law. We’re pulling in resources from multiple state agencies to make this happen as quickly as possible,” said John Connolly, deputy commissioner and state Medicaid director. “Minnesotans need to have confidence that the money being spent on these programs is helping the people it’s intended to help.” 

The off-cycle revalidation is a cornerstone of the state’s efforts to convince the Centers for Medicare & Medicaid Services to reverse course on a highly unusual action to withhold over $2 billion in annual Medicaid funding.

More information is in a department news release.


First Medicaid Program Integrity Update newsletter issued

This month, we distributed the first issue of our new Medicaid Program Integrity Update newsletter, designed to increase transparency around our efforts to prevent and fight fraud.

To stay up to date on the latest actions, sign up for our program integrity email list.

And you can always get information on our Medicaid Program Integrity webpage and our fact check page.


In social media: Protecting autism services

Screenshot of Instagram post on steps to fight fraud in autism services


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Commissioner issues statement on federal Medicaid funds deferral

On Feb. 25, the federal government notified the Minnesota Department of Human Services it is deferring $259 million in federal Medicaid funding.

"Wednesday's announcement by the federal government is part of a broad and sustained attack on Medicaid in Minnesota," Human Services Commissioner Shireen Gandhi said.

"Deferring $259 million will significantly harm the state's health care infrastructure and the 1.2 million Minnesotans who depend on Medicaid. The federal government chose to ignore more than a year of serious and intensive work to fight fraud in our state."

This deferral of funds is on top of federal action to withhold more than $2 billion in annual Medicaid funding to Minnesota. The state has submitted a corrective action plan to convince the Centers for Medicare & Medicaid Services to reverse course and is appealing.


Governor appoints Gandhi permanent commissioner

Commissioner Shireen Gandhi

On Feb. 23, Governor Tim Walz announced the appointment of Shireen Gandhi to serve as commissioner for the Minnesota Department of Human Services.

Gandhi has served as temporary commissioner since February 2025.

“Commissioner Gandhi understands that protecting public programs and delivering high-quality care go hand in hand,” said Governor Walz. “Over the past year, she has demonstrated steady, decisive leadership at the Minnesota Department of Human Services, strengthening program integrity, rooting out fraud, and ensuring taxpayer dollars reach the Minnesotans who rely on these services.”

More information is in the Governor's news release.


New webpage separates fraud facts from fiction​

Screenshot from fact check webpage

Accurate, fact-based information is critical in the fight against fraud. On Feb. 11, the department launched a new fact check webpage to correct misleading information and false claims about Medicaid fraud in Minnesota. 

“Speculation, intentional misinformation and amateur investigations will not stop fraud in our state,” said Commissioner Shireen Gandhi.

"While we continue to tighten oversight, we’re also making sure people have a place to go for facts when they hear claims that are intended to justify the defunding of social services programs.” 

More information is in a department news release.


In the news

newspaper beside a coffee cup

Two Harbors hospital launches CNA training program amid rural healthcare crisis: With the help of state funding, a northern Minnesota hospital aims to eliminate barriers to entering the health care industry by providing training close to home and covering all student expenses. Learn more in a Northern News Now story.

Walz appoints Shireen Gandhi to lead embattled Department of Human Services: Gandhi’s tenure leading the department coincides with a period of intense scrutiny from the public and lawmakers related to the agency’s oversight of Medicaid-backed programs, which became targets of fraudsters. Learn more in a Star Tribune article.

Minnesota isn’t alone, fraud uncovered in other states too: Fraud continues to be a prevalent statewide topic in 2026. KTTC reviewed U.S. Department of Justice documents that describe instances of large-scale fraud investigations in other states.

'Fraud tourists' plead guilty to Minnesota Medicaid scheme: Two men from Philadelphia admitted their roles in a $3.5M fraud scheme involving Minnesota’s Housing Stability Services Program. Learn more in a FOX 9 story.