Minnesota Governor Tim Walz announced a proposal to restructure how the state administers its human services system, moving away from a model managed by counties, Managed Care Organizations, and state agencies toward a single, centralized entity. The proposal aims to modernize Medicaid administration, consolidate administrative functions, and initiate independent reviews to strengthen program integrity and improve service delivery.
Medicaid Restructuring
Currently, about 45% of Medicaid spending and nearly 80% of basic care services are administered through eight Managed Care Organizations. Under the proposal, Minnesota would transition to a single statewide Administrative Service Organization responsible for claims processing, financial transactions, and provider services. This change would allow Medicaid recipients to access the same provider networks, rates, and billing rules regardless of where they live. The proposal also calls for moving Medicaid eligibility determination for health care and long-term services from counties to the state by July 1, 2028. The state would also pilot assuming some MnCHOICES eligibility functions related to long-term care, disability, and older adult services.
Comprehensive Program Review
The plan includes funding for a comprehensive study examining how human services programs are administered across Minnesota, reviewing how responsibilities are shared between the state, counties, and Tribal Nations, and examining how other states structure their systems. Programs under review include Medicaid (Medical Assistance), MinnesotaCare, behavioral health services, housing support, economic assistance, child support, and child care programs.
Fraud Prevention Context
The proposal builds on recent anti-fraud efforts, including a comprehensive package introduced in February, the permanent appointment of Commissioner Shireen Gandhi to lead fraud-prevention efforts, and implementation of a nine-part fraud prevention roadmap. This comes as the federal government withholds $259 million in Medicaid funding pending a state plan to combat fraud. Governor Walz stated: “Minnesota is consistently ranked as one of the best states to live because we invest in programs that support children, seniors, people with disabilities, and families. But systems built decades ago must evolve to meet today’s challenges.”
This article is an AI-assisted summary. All facts and figures are drawn from the original report: https://www.valleynewslive.com/2026/03/10/walz-proposes-overhaul-minnesotas-human-services-system/