Minnesota Medicaid Director Disputes CMS's $112M Claims Denial
Minnesota's Department of Human Services says CMS notified the state it will deny reimbursement for more than $112 million in Medicaid funds already paid, tied to a February CMS freeze of $259 million in funding for high-risk services. Medicaid director and acting DHS commissioner John Connolly says CMS flagged only 330 claims totaling roughly $112,000 out of 6 million high-risk claims submitted from July through September 2025, calling the $112 million denial "1,000 times greater" than the flagged amount and questioning CMS's extrapolation methodology and claims-selection process. DHS says the denial was based on administrative paperwork deficiencies rather than fraud, and two additional funding freezes totaling $350 million for subsequent quarters remain undecided. The state has 60 days to appeal.