by Minnesota – Minnesota’s Department of Human Services (DHS) is seeking federal assistance to terminate its Housing Stabilization Services (HSS) program, citing “large-scale fraud” as the reason for ending the initiative. The program, designed to help seniors and people with disabilities—including those with mental illness or substance use disorders—find and maintain housing, will be redesigned and relaunched under stricter oversight.
Program Termination and Redesign
The HSS program is a Minnesota Medical Assistance benefit administered by DHS. A spokesperson for the program told The Center Square that DHS plans to collaborate with the legislature, service providers, community partners, and the Centers for Medicare and Medicaid Services (CMS) to redesign the program with enhanced integrity and quality controls.
“Once that work is complete, DHS will then work with CMS to submit a new program framework for approval,” the HSS statement said.
Despite the termination process, current providers may continue delivering services, and new applicants are still eligible to enroll.
Fraud Investigation
The decision follows findings from the DHS Office of Inspector General (OIG), which uncovered widespread fraud through data analysis and investigations. DHS Temporary Commissioner Shireen Gandhi requested CMS assistance on August 1 to end the program, emphasizing the need to safeguard Medicaid enrollees and protect taxpayer funds.
“We cannot allow one more cent of taxpayer money going out the door to providers who claim to serve Minnesotans in need of stable housing while lining their pockets for personal gain,” Gandhi said.
Inspector General James Clark added that terminating the program, while regrettable for participants, is necessary to address the fraudulent activity.
Political and Public Reactions
Minnesota State Rep. Kristin Robbins called the shutdown a “stunning admission of just how deeply broken this program has become under the Walz administration’s watch.” She noted that the program, initially expected to cost $2.6 million annually, ballooned to over $100 million due to widespread fraud.
“DHS has failed in its duty to protect taxpayers and vulnerable Minnesotans, and there must be full accountability for the mismanagement that allowed this to happen,” Robbins said.
DHS confirmed that the redesigned program will include stricter safeguards to prevent future abuse and ensure that housing support reaches those who genuinely need it.
