Governor Tim Walz announced a proposal to transform Minnesota’s human services system, outlining a major structural overhaul of the state’s administration of human services. The proposal would streamline Minnesota’s service delivery model, moving away from the complex, layered administration managed by a patchwork of counties, Managed Care Organizations, and state agencies to a single, centralized entity.
The proposal would also modernize Medicaid administration, consolidate administrative functions, and initiate independent reviews to strengthen program integrity and improve how services are delivered to Minnesotans.
“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,” said Governor Walz. “But systems built decades ago must evolve to meet today’s challenges. This proposal begins the work of modernizing how we deliver human services so we can strengthen oversight, increase efficiency, and improve the quality of services Minnesotans rely on. This is about asking whether the way our system is organized today best supports accountability, transparency, and effective service delivery for the future.”
The Governor’s proposal builds on recent efforts to strengthen fraud prevention and accountability in state programs, including a comprehensive anti-fraud package introduced in February, the permanent appointment of Commissioner Gandhi to lead the state Department of Human Services’ ongoing efforts to combat fraud, and the implementation of a nine-part fraud prevention roadmap developed by Director of Program Integrity Tim O’Malley.
Governor Walz unveiled the proposal alongside Minnesota Department of Human Services Commissioner Shireen Gandhi, Inspector General James Clark, Deputy Commissioner and State Medicaid Director John Connolly, and Minnesota Management and Budget (MMB) State Budget Director Ahna Minge.
Modernizing Medicaid Administration
A central component of the proposal would change how Minnesota administers Medicaid. Currently, about 45 percent of Medicaid spending and nearly 80 percent of basic care services are administered through eight Managed Care Organizations (MCOs).
Under the Governor’s proposal, Minnesota would transition from the MCO model and establish a single statewide Administrative Service Organization (ASO) responsible for administrative duties such as claims processing, financial transactions, and provider services.
This change would allow Minnesotans receiving Medicaid to access the same provider networks, rates, and billing rules regardless of where they live, while strengthening consistency and program controls.
Strengthening Eligibility Oversight
The Governor’s proposal also calls for shifting the Medicaid eligibility determination process for health care and long-term services from counties to the state, streamlining eligibility processes, and improving oversight.
Under the proposal, the state would assume responsibility for eligibility determinations and certain specialized Medical Assistance eligibility processes by July 1, 2028. The state would also pilot assuming some MnCHOICES eligibility functions related to long-term care, disability, and older adult services.
Evaluating the Future Structure of Human Services
The Governor’s plan also includes funding for a comprehensive study examining how human services programs are administered across Minnesota. Counties and Tribal Nations play a critical role in delivering services, but Minnesota is one of a small number of states that continues to operate a large county-administered human services system.
The study will review how responsibilities are currently shared between the state, counties, and Tribal Nations and examine how other states structure their systems. It will also assess the administration of programs, including Medicaid (also known as Medical Assistance), MinnesotaCare, behavioral health services, housing support, economic assistance, child support, and child care programs.
The goal is to develop recommendations for a more transparent, efficient, and accessible system for Minnesotans.
The Minnesota Department of Human Services today announced a Request for Proposals (RFP) to re-evaluate and restructure its organization, operations, and the work culture of the 2,300 people who provide funding for social services across the state. The state is seeking proposals from independent consulting firms to provide recommendations on improving the effectiveness of the department serving as the state’s Medicaid agency.
The request for proposal kicks off an extensive process review of agency operations that was ordered last fall by Governor Tim Walz in an executive order to combat fraud in state programs.
Governor Walz emphasized that the proposal marks the continuity of a long-term effort to modernize Minnesota’s human services system and ensure programs remain strong, accountable, and effective for the Minnesotans who rely on them.
