Anoka home care provider says months-long DHS payment freeze forced closure despite law enforcement declining case

Anoka home care provider says months-long DHS payment freeze forced closure despite law enforcement declining case Renée Cooper KSTP Provider closes due to Medicaid payment withholding despite no active investigation into it An Anoka in-home care provider says a months-long state Medicaid payment freeze forced it to close after 25 years, even though no active law enforcement investigation is underway. Avalon Home Care owner Jonathon Hansen said he shut down the business in June after the Minnesota Department of Human Services (DHS) stopped reimbursing his company for services in April, citing a “credible allegation of fraud.” Hansen said 160 people lost jobs and 99 had their care disrupted. “It’s taken me 25 years, you know, to build this company where it’s been now, and my company’s ruined. Like, there’s no surviving this,” Hansen said. Hansen sued, arguing the payment hold continued for months without explanation or a criminal investigation. “There’s no fraud happening at Avalon, and if there is, it should be referred. And if it’s being referred, why isn’t it being investigated? And so I’m just caught in this loop,” Hansen said. Court filings say two state agencies declined referrals from DHS to investigate the company. Emails in those court records show the Minnesota Attorney General’s Medicaid Fraud Control Unit (MFCU) declined referrals in June and again in September, saying DHS gave them “limited new information.” The Attorney General’s office on Friday confirmed the MFCU received and declined “several referrals from DHS on the entity Avalon.” A spokesperson added that a decision to decline an investigation should not be interrupted as proof a provider did nothing wrong, nor does it mean DHS couldn’t take administrative action. “The standard of proof to bring criminal charges for fraud is much higher than is necessary for DHS to take administrative action against a provider for waste or abuse,” a spokesperson said. The Minnesota Bureau of Criminal Apprehension (BCA) said it forwarded a July DHS referral to the MFCU “with the offer to assist them should they open the case.” “We have not received a request for assistance from the AG’s office,” a BCA spokesperson said. A spokesperson for DHS did not directly address questions related to Avalon Home Care on Friday, saying, “Whether DHS has an open investigation, is withholding payment on a specific provider or has referred the case to other authorities is protected from disclosure under state law with limited exception.” “DHS is acting aggressively to detect and prevent fraud and will shut off money to providers when credible allegations of fraud come to light,” they added. Hansen said DHS has never told him exactly what those allegations are. “If they can just do these payment withholds and not need a reason as to why, make me spend $200,000 in legal fees to try and figure out why, why would I ever want to become business partners with them again?” Hansen said. “Who would want to be a service provider in the state?” A Ramsey County judge denied Hansen’s request to force DHS to release the money, writing, “DHS’s obligation to do so now is not clear and indisputable.” The judge also wrote that it is unclear to the court whether DHS is investigating Avalon despite claims the agency is conducting its own investigation, adding, “The court remains concerned that DHS’s payment withholding appeared to have been based on its referrals to law enforcement, which have not gotten traction…” Hansen said he plans to appeal the ruling.