On April 23, the CMS Administrator, Dr. Mehmet Oz, issued a letter to State Medicaid Directors “formally asking that your state develop and submit a comprehensive two-year provider revalidation (PR) strategy….” This SMD is not posted on Medicaid.gov with all the other SMDs, but you can view it on the Fox News website. The state strategies were due by the first week of June. CMS has not posted them but a number of states have embraced transparency by posting them online, including California, North Dakota, and Vermont. (KFF is tracking federal actions relating to Medicaid program integrity.) The implementation of these strategies has important implications for provider participation in Medicaid and access to covered services by Medicaid enrollees.
The focus of the SMD is off-cycle revalidation of “high-risk” providers. This has to do with the provider screening and enrollment requirements enacted in the Affordable Care Act in 2010. A detailed explanation of these provisions is in the most recent report to Congress by the Medicaid and CHIP Payment and Access Commission (MACPAC). The short of it is that in order to bill Medicaid (or Medicare), a provider must be screened for program integrity risk. The screening process is intended to identify bad actors and keep them out of the program before they can defraud it. There are three risk levels: low, moderate, and high. High-risk providers are subject to state licensure and federal database checks, site visits, and criminal background checks. States have flexibility to assign risk levels to types of providers, or to individual providers. They must revalidate – i.e., re-screen – each provider at least once every five years.
As it happens, Minnesota is in the midst of an off-cycle revalidation of “high-risk” providers. While the state’s process is ongoing, the early results contain important lessons for providers, Medicaid agencies, and enrollees in other states.
Minnesota’s revalidation effort began months before the SMD was issued. It is one element of the state’s January 30 Corrective Action Plan (CAP) approved by CMS on March 19 to resolve the compliance action that CMS took against the state on January 6. (This matter is currently on the back burner). The state Medicaid agency, which calls this undertaking “Minnesota Revalidate 2026,” views it as “the centerpiece of our efforts to meet federal officials’ expectations.” Under the terms of the CAP, Minnesota’s Medicaid agency agreed to revalidate all providers in 13 high-risk service areas: adult companion services; adult day services; adult rehabilitative mental health services; assertive community treatment; community first services and supports; early intensive developmental and behavioral intervention (EIDBI); individualized home supports; integrated community supports; intensive residential treatment services; night supervision services; nonemergency medical transportation (NEMT) services; recovery peer support; and recuperative care. The revalidation of providers of these services involved “an in-person site visit, fingerprint background study for individuals with a controlling interest in the provider organization, and verification of provider credentials.” (The Governor designated these services high-risk in October 2025).
In late January, the agency sent notices of revalidation requirements to about 5,600 providers of these 13 high-risk services. All providers seeking to revalidate were required to submit an application with supporting documentation; individuals with an ownership interest of 5% or more in a high-risk provider were required to undergo a fingerprint-based criminal background check. Those providers with approved applications were then subject to an unannounced site visit. The deadline for completion of all revalidations (and deactivation of non-compliant providers) was May 31.
The agency has posted the initial results as of June 9. Of the 5,583 providers that were required to revalidate, only 2,061, or 37 percent, successfully revalidated. 111 providers were “removed from review” because they no longer furnish a high-risk service. Of the remaining 3,411 providers that received disenrollment notices, 2 were disenrolled because they failed the criminal background check, 916 were disenrolled because they failed the unannounced site visit, and 2,491—45 percent of all those required to revalidate—were disenrolled because of incomplete or inaccurate applications. The agency referred 59 providers—1 percent of all those required to revalidate—to the state’s Office of Inspector General “for further review.”
The large number of terminations triggered an outcry from affected providers. The state announced that it would lift the payment suspensions for those filing an appeal by June 16, allowing them to continue to treat Medicaid patients and bill for those services while the state considered their appeals. According to press reports, as of June 24, 2,600 providers had filed appeals, 2,100 of whom have their payment suspensions lifted. The Medicaid agency had revalidated 200 of those that appealed.
There’s much that is not yet known about Minnesota Revalidate 2026. We don’t know how many of the providers required to revalidate fell into each of the 13 high-risk provider types; how many people covered by Medicaid those providers were treating and how much they were billing the program when revalidation began; or how many of the providers in each provider type were successfully revalidated, how many in each provider type failed the site visit, and how many in each provider type were referred to the Office of Inspector. Of course, the outcomes of the appeals are not yet available, and the net effect of revalidation on provider participation and enrollee access to care is still unknown.
Even at this early stage, however, two things are clear. First, four months is not nearly enough time to revalidate nearly 5,600 high-risk providers. According to press reports, some providers received termination notices because the state agency was not able review their applications before the May 31 deadline.
Second, Minnesota Revalidate 2026 has so far uncovered relatively few cases of suspected fraud. Only 59 providers—1 percent of the 5,583 presenting the highest level of program integrity risk—have been referred to the state’s Office of Inspector General for investigation. Among the reasons for the referrals were “concerning connections between providers” and “failures to disclose people with ownership interests in a business.” We don’t yet know the outcomes.
There is, indisputably, fraud against Minnesota’s Medicaid program, as there is against other states’ Medicaid programs and Medicare. But the early results of this provider revalidation do not remotely support the White House’s accusations of “staggering” and “widespread” fraud against Minnesota’s program.
Medicaid enrollees have a strong interest in keeping bad actor providers out of the program. For state Medicaid agencies trying to protect their enrollees and their programs, provider screening and enrollment, including periodic revalidation, are the first lines of defense. It’s critical that, as state agencies implement their 2-year provider revalidation strategies, they get this right. The Minnesota experience has the potential to provide important operational lessons for such efforts. It deserves close examination by consumer advocates, providers, and other state agencies going forward.