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Governor Tim Walz released his 2026 supplemental budget proposal (PDF) on March 17. The budget prioritizes lowering costs for middle class families, helping Minnesotans through workforce disruptions caused by artificial intelligence, and responding to Operation Metro Surge, while making responsible cuts to continue Minnesota's record of balanced budgets.
Fraud prevention and financial integrity are among key components. The supplemental budget builds on extensive action already taken to protect taxpayer dollars and strengthen program integrity with increased detection and oversight, strengthened investigative and enforcement authority, and increased criminal penalties.
The budget also establishes a Statewide Office of Inspector General; prohibits legislatively named grants; adds capacity for fraud prevention at the Attorney General’s Medicaid Fraud Unit; strengthens program integrity at managed care organizations; and allocates $30 million over three years to update legacy IT systems.
The governor also plans to work with the legislature to preserve Hennepin Healthcare’s Hennepin County Medical Center, an important statewide asset.
More information is in the:
On March 10, Governor Tim Walz announced a proposal to transform Minnesota’s human services system (PDF), outlining a major structural overhaul of the state’s administration of human services.
The proposal would streamline Minnesota’s service delivery model, moving away from the complex, layered administration managed by a patchwork of counties, managed care organizations and state agencies to a single, centralized entity.
The proposal would also modernize Medicaid administration, consolidate administrative functions, and initiate independent reviews to strengthen program integrity and improve how services are delivered to Minnesotans.
"This proposal begins the work of modernizing how we deliver human services so we can strengthen oversight, increase efficiency, and improve the quality of services Minnesotans rely on,” said Governor Walz. "This is about asking whether the way our system is organized today best supports accountability, transparency, and effective service delivery for the future.”
More details are in the governor's news release.
A new initiative will enable people who are incarcerated to access Medicaid for behavioral health services in the months leading up to, and after, their release.
In 2023, the federal Centers for Medicare & Medicaid Services (CMS) developed new guidance that allows states to provide reimbursement for certain Medicaid-covered behavioral health services, as well as medical care for chronic health conditions, for up to 90 days before release for people who are incarcerated. This initiative is called the 1115 Reentry Services Demonstration.
We are in the process of seeking CMS approval to participate in this demonstration.
A new webpage detailing this initiative, including information on eligibility, services covered and a timeline for launch is now available.
The initiative’s primary goals are to reduce overdose deaths, improve public safety, and increase the continued use of needed behavioral health services post-release.
To receive the latest news, sign up for 1115 Reentry Demonstration News and Updates.
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