A Minnesota law that took effect on August 1 lets the head of any state agency stop paying a provider or an individual caregiver based on a fraud allegation the agency has not proven, for as long as the investigation lasts. The law is 2026 Chapter 122, House File 3629, signed by the governor on May 26. It rewrites Minnesota Statutes section 15.013, which until Friday capped these freezes at 60 days and gave the target a right to appeal.

What the Law Changed

The old version required a preponderance of the evidence that the participant "has committed fraud," notice 24 hours before the first missed payment, a stated end date, and the right to file a contested case under chapter 14 or petition a court for relief.

All of that is gone. Under the new subdivisions, an agency head may withhold payments if the participant "is the subject of a credible allegation of fraud under investigation," and a credible allegation means one the agency head has verified "from any source," including tips, audit patterns, and court filings. Notice now goes out within five days after the money has already stopped, and it "need not disclose specific information concerning an ongoing investigation." There is no end date, because the withholding continues until the agency decides the evidence is insufficient or the legal proceedings finish.

The appeal is gone too. The statute now reads that withholding "is a temporary action and is not subject to appeal under chapter 14." What replaces it is administrative reconsideration by the same agency that froze the money. You submit a written request "stating with specificity the reasons the payment withholding decision is in error," and the agency head has 60 days to review it.

A program participant used to mean an entity, or an individual acting on behalf of an entity. It now means "any entity or individual," which reaches a person paid directly to provide care. One agency can also freeze payments because a different agency's investigation named the same person.

Why This Lands on Disability Services

Minnesota's human services agency has been using this tool at scale, issuing more than 500 payment pauses in a year, a 240% jump over 2024. Minnesota Management and Budget Commissioner Erin Campbell asked legislators to drop the 60-day limit and lower the evidence standard, saying current law "ties some agencies' hands."

Those pauses have repeatedly landed on disability services. Between September 4 and 23 last year, the department suspended payments to 11 Integrated Community Supports providers, a Medicaid service for adults with disabilities, and the holds reached 17 more affiliated providers. In the Housing Stabilization Services program, 115 providers were suspended and 55 appealed. When a prepayment review system rolled out in January, payments to providers of 14 Medicaid services stalled at once, and one home health agency warned staff it couldn't make payroll.

A personal care assistant sued the department in October after her payments for caring for her own disabled son were frozen for two years with no explanation and no timeline. The department resumed her payments about a week after she filed. Her attorney, Joseph Dixon, said the state "simply withdrew the payment suspension" rather than defend it, which ended the case.

What This Means for Families

Your child's Medicaid eligibility does not change when a provider's payments stop. What stops is that provider's ability to pay the people who show up at your door.

The law does carry one protection written for you rather than for the provider. Following notice, and "to the extent practicable," the agency "must ensure that any person whose public funds are interrupted and who is not implicated in the suspected fraud receives notice of their rights to continued receipt of the public funds, services, or programs for which they are eligible." The same paragraph requires the agency head to provide a point of contact for the people affected.

The new statute also doesn't override the Medicaid-specific withholding rules at sections 245.095 and 256B.064, which carry their own notice and appeal frameworks. A Medical Assistance provider still has those routes. What section 15.013 no longer offers anyone is a hearing before a judge.

What Families Can Do Now

• If your provider tells you payments have been frozen, ask the agency for the named point of contact the statute requires, and get the notice of your continued-services rights in writing.
• Call your county or tribal waiver case manager the same week. Case managers are the ones who arrange an alternate provider, and the wait for a replacement is what interrupts care.
• Keep your own service records current: authorized hours, the provider's National Provider Identifier, and dated notes of missed visits. A reconsideration request has to state specifics, and so does an ombudsman complaint.
• If you're paid directly as a caregiver and your payments stop, contact the Minnesota Disability Law Center, the state's federally designated protection and advocacy agency, at 1-800-292-4150 before the 60-day reconsideration clock runs.

The state disenrolled 61% of its Medicaid disability providers last year and then reinstated 2,100 of them. The steps for replacing a provider who stops taking your child are the same ones that apply when payments freeze.

Starting November 30, 2026, the human services commissioner must report to the legislature every year on program integrity, including how many provider investigations the department has run over the previous five years.