How Two July 20 Decisions — and Fraud Review Dysfunction — Impact Disabled Minnesotans

 

As a disabled Minnesotan, Kristen Ellingson has one simple question: Why do I have waiver services if I cannot actually use them?

Hutchinson area resident Ellingson is an activist focused on Lyme disease and networking for others affected by the disabling condition. She lives with severe musculoskeletal conditions, neurological issues, and cognitive and memory impairments. At one point, she was nearly paralyzed.

When Ellingson qualified for waiver services and caseworker support, she assumed that she had found an advocate and support to help her live in her chosen community. “My experience has been the opposite,” she says. “Instead of support making things easier, I have found myself having to fight constantly for basic needs and services.”

Her experience is not unique. In Minnesota, waiver services (often called Home and Community-Based Services or HCBS) allow individuals with disabilities or older adults to receive personalized care in their own homes or community settings rather than an institution. Five waiver programs are offered in Minnesota. Four are for people with disabilities; the fifth is an elder waiver.

Programs are funded through Medical Assistance and Medicaid.

Ellingson’s experience mirrors that of many others, whose services and support have been caught up in a perfect storm of fraud allegations and related federal funding deferrals, staff shortages, and political infighting.

 

 

Two blows came July 20.

1. The U.S. Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) announced that approximately $199 million in federal Medicaid payments to Minnesota are being deferred while the state provides additional documentation supporting certain high-risk claims. This is the third deferral of Medicaid funds related to alleged Minnesota program integrity concerns. The latest deferral applies to funding owed to Minnesota by the federal government for services paid for in the quarter ending on March 31, 2026. The previous quarterly deferrals were for $260 million and $91 million.
2. A second blow was when the Federal Register included a notice from the Department of Justice. The notice was that past guidance on the Olmstead Plan will no longer be relied on to enforce part of the Americans with Disabilities Act (ADA). Olmstead and the ADA are federal measures meant to ensure the civil rights of disabled people. Federal civil rights protections used to be triggered if cuts were found to put a person at serious risk of institutionalization. The July 20 change is seen as removing those protections and making it harder to challenge cuts. Several disability advocacy groups are sounding an alarm.

Waiver Service Changes

At the state level, proposed disability waiver service changes have sparked controversy, especially the Minnesota Department of Human Services’ (DHS) Waiver Reimagine project. Waiver Reimagine has been working for several years to merge the four waiver programs into two in order to streamline and simplify services.

DHS presents changes as a matter of equity. But critics — including the nonprofit Disability Voice Advocates (DiVA), and the Facebook group Waiver Reimagine Minnesota DHS Disability RIGHTS Issues — contend that proposed changes will force disabled people to leave their homes.

A key concern is that the two new waiver categories are based on where an individual lives rather than a specific diagnosis. Many objections center on the possibility that people living in congregate settings, such as group homes, can receive much higher budgets than those living on their own or with family members. This raises worries about forced institutionalization.

In a commentary published recently in the disability newspaper Access Press, DiVA stated: “The risks are not theoretical — they are deeply personal. A 50 percent budget cut can mean losing the supports that make independent living possible: personal care assistance, help with daily tasks, or transportation. Without those services, individuals may be forced out of their apartments and into group homes — not by choice, but by necessity.”

The specter of fraud hangs over everything. This spring DHS finished a five-month review of 5,583 service providers whose work is funded through Medicaid and Medical Assistance. The review was undertaken to protect Minnesota from having up to $2 billion withdrawn from its Medicaid program. Providers considered high risk had to prove that they met heightened legal and eligibility standards required to operate and serve vulnerable people.

“More than 1 million Minnesotans deserve to have confidence and trust in the Medicaid providers they depend on for lifesaving and life-affirming care,” said outgoing DHS Commissioner Shireen Gandhi in a statement. “We are grateful to the providers who successfully completed the revalidation process and will continue to provide quality care.”

More than 3,400 providers were notified of pending disenrollment. Most had failed to submit complete paperwork and documentation.

Providers were given 60 days to appeal. DHS has also worked with lead agencies — including counties, tribes, and managed care plans — to help clients find new providers if needed.

DHS is reaching out directly to Minnesotans who do not have case managers and who receive services from providers who may be disenrolled.

Service providers and disability rights advocates have pushed back, saying that thousands of legitimate providers were disenrolled as of June 1. They contend that the fraud crackdown is hurting the wrong people.

As the fraud issues spool out, other longstanding concerns about waivers remain. One complaint about waivers is that participants must repeatedly resubmit documentation even though their needs have been certified.

Kristen Ellingson

“Even when eligibility is clear, it often feels like the burden is placed back on the individual to prove themselves over and over again,” says Ellingson. “You have to fight tooth and nail to advocate for yourself. It’s exhausting when you have a waiver and cannot use it. There’s such a lack of coordination. Communication is poor.”

Ellingson had faced challenges in trying to get her home bathroom modified, and in getting basic mobility aids. She has a waiver to cover mobility needs and home modifications. She was a given a Life Alert button to get help in case of a fall.

“But I cannot get a $100 walking stick to prevent me from falling,” she said. Instead, she was told to opt for more costly items, such as a scooter or electric dolly.

“From my perspective, the system is not functioning in a way that supports independence or dignity,” she says. “Instead, it creates exhaustion, confusion, and barriers to care for people who are already living with significant disabilities and health challenges.”

 

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From The Politics Chicks
The fraud was real. The crisis built on top of it was manufactured: selective enforcement, a historic ICE operation, and Medicaid cuts converging in one state.

From Heather Cox Richardson, July 21, 2026

Today Secretary of Health and Human Services Robert F. Kennedy Jr. told reporters the federal government is withholding more than a billion dollars in Medicaid funding from California and Minnesota, saying they want to see proof that payments there aren’t fraudulent. Sarah Kliff of the New York Times notes that the administration was already withholding money from those two Democratic states. It has withheld $1.3 billion from California since May and $243 million from Minnesota since February. Now Kennedy says it will withhold more than $867 million from California and more than $200 million from Minnesota.

The front page of yesterday’s New York Times featured some of the 440,000 Americans from Arizona alone who have lost Supplemental Nutrition Assistance Program (SNAP) benefits since the Republicans’ One Big Beautiful Bill Act made the deepest cuts to SNAP in its history, expanded work rules, and shifted costs to the states even as cuts to federal grant programs have forced Arizona to lay off a third of its caseworkers.

Those Arizona residents include Dee McDonald, a 65-year-old cancer survivor who weighs 69 pounds and skips meals to feed her three teenaged grandsons.

SNAP falls under the Department of Agriculture, and Agriculture Secretary Brooke Rollins celebrates the cuts, claiming the program is rife with fraud. Like other Republicans, she cites error rates. But error rates usually reflect mistakes in classification numbers by caseworkers, not fraudulent use of services.

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