MN Adult Day Care Licenses Halted Amid Fraud Probe

The Minnesota Department of Human Services is temporarily suspending new licenses for adult day care centers for a period of two years, effective February 1, 2028. This measure is a direct response to an oversupply of providers compared to the number of individuals requiring these services. Over the past five years, provider capacity has surged by 43%, far outpacing the 7% increase in service recipients.

This initiative allows the agency to concentrate on ensuring program integrity and compliance among current licensed facilities. The pause occurs as the department faces intense scrutiny regarding its handling of Medicaid program fraud. Previous federal actions have targeted providers of autism treatment and housing stabilization services, highlighting systemic issues within state-funded programs.

Officials are also investigating allegations of 'kickbacks' used to incentivize clients to switch providers. This practice is seen as a symptom of market oversaturation, where legitimate business growth is impossible. Both the temporary commissioner and the inspector general are scheduled to testify before the Minnesota House Fraud and State Oversight Committee regarding these ongoing investigations.