Providers operating under the Minnesota Department of Human Services-administered (DHS) Integrated Community Supports (ICS) program and leadership with the Residential Providers Association of Minnesota (RPAMN) say a change in state law this year meant, in part, to crack down on fraud may threaten the entire program.

ICS programs in Minnesota served 2,500 individuals in 2024, according to DHS.

“We are teetering on the edge of collapse, and nobody seems to be focusing on the real issue,” said Josh Berg, director of Minnesota services and strategic growth for nonprofit Accessible Space, Inc. (ASI).

5 EYEWITNESS NEWS met with Berg at Roselawn Village, where ASI provides ICS services.

DHS reimburses providers for the cost of those services, but does not assist with the cost of rent.

Roselawn Village is income-subsidized housing, but other providers have had to get more “creative” to help their lower-income clients cover the cost of rent, Berg said.

“So there are some providers, nonprofit providers, that raise money to cover the costs that some of their individuals can’t afford,” he said.

Then DHS began suspending some ICS provider payments.

The state agency also sent a bulletin out to providers as updated guidance “…on a new state law prohibiting kickbacks…” One provided example of a potential kickback included, “Covering or paying a portion of a recipient’s rent.”

“It hasn’t been an issue for the last four years of this program’s existence, and now we’re second-guessing everything,” Berg said of the bulletin.

Matthew Bergeron, who provides legislative & legal counsel for RPAMN, said providers have been wondering if that example of a “potential kickback” could explain why some ICS provider payments have been suspended.

“So that’s been some of the sort of informal assumptions on the problem,” Bergeron said. “But again, because none of these notices lay out, ‘This is the problem,’ it’s really hard to know concretely what they’ve identified.”

“…And at the moment, it feels like that regulatory ambiguity is being resolved quite strongly against the providers,” he continued.

5 EYEWITNESS NEWS asked DHS: “Is it considered a ‘kickback’ if the provider helps to cover partial rent for the recipient, but does not bill for ICS fund reimbursement for it…?”

In response, a spokesperson wrote, “DHS is unable to provide any legal guidance on the hypothetical you provided,” adding that providers cannot offer money or in any way incentivize someone to choose their company.

As for why providers have been helping pay for rent in some cases, Berg said there’s a significant lack of affordable options for ICS clients and in general.

DHS did not fully address the question of whether a provider, through fundraising or other non-ICS-related means of funding, can cover part of the housing cost for their clients.

“Yeah, and I think so many providers just don’t know, and so now they’re stuck thinking, ‘I’m better off potentially getting out of this,’ because there is no systemic solution,” Berg said.

As of the latest update, 11 providers have had their ICS payments paused.

Berg said he and other providers alerted DHS to the lack of available affordable housing and have been asking for guidance on how to navigate it in a way that complies with laws and program regulations for at least four years prior.

See the full statement attributed to DHS below:

DHS is unable to provide any legal guidance on the hypothetical you provided below. The relationship between housing funding and health care services is nuanced and depends on the specific facts of each individual situation.

We would point you to Minnesota Statutes section 609.542, which makes it illegal to “offer or receive money, discounts, credits, waivers, or any other form of remuneration in exchange for referrals or services related to state-funded healthcare programs.”

In other words, a provider cannot give any form of remuneration in exchange for the individual choosing them as their service provider. In addition, the law prohibits the use of Medicaid funding to pay for rent or room and board, except in certain medical institutions, which does not include ICS settings.

See the full question 5 EYEWITNESS NEWS posed, referenced above by DHS as a “hypothetical”:

“Is it considered a ‘kickback’ if the provider helps to cover partial rent for the recipient, but does not bill for ICS fund reimbursement for it, and they do not have the recipient ‘commit to an inflated number of ICS service hours per week’?”

Source: KSTP-TV