Committee report: Integrated Community Supports

Integrated Community Supports (ICS) Hearing Date: Wednesday, September 17, 202585

Background:

ICS is a relatively new Medicaid or Medical Assistance(MA)-funded service established in 2021 to provide services for disabled individuals in a provider-controlled setting, often apartments that the provider subleases to clients. The service has been discussed in several pieces of investigative journalism often including allegations of housing kickbacks and billing for services not received. The Committee was interested in investigating the program after a whistleblower, who has resided in multiple ICS settings, reached out to warn about widespread fraud.

Shortly after the hearing, DHS announced a payment freeze for eleven ICS providers on September 26, 2025.86 The service is among the 14 designated high- risk programs. The U.S. Attorney’s Office (USAO) in the District of Minnesota noted the explosive growth in providers and reimbursements in ICS and announced their investigation into the program in December of 2025.87

Note: From USAO 12/18/2025 Press Conference

Finding: Whistleblower made credible claim of fraud, but DHS took insufficient action to stop the fraud.

Prior to the hearing, a whistleblower residing in an ICS setting named Cain Pence reached out to the committee. Committee staff met with Pence who described a scheme in which his ICS provider, American Home Healthcare, would provide clients housing within their setting at a

85 YouTube video, House Fraud Prevention and State Agency Oversight Policy Committee 9/17/25. 86 Eric Rasmussen, “DHS Suspends Payments to Disability Service Providers Citing ‘Credible Allegations of Fraud,’” KSTP, Sept. 26, 2025, updated Oct. 15, 2025. 87 YouTube video, FULL PRESS CONFERENCE: U.S. Attorney's oTice announces new fraud charges in Minnesota, Dec 18, 2025.

reduced rate, but bill for services that were not delivered. Pence described his time at American Home Healthcare as a continuous fight with the company’s owner, Jama Mohamed, to receive any services at all. These demands for service were allegedly met with threats and insults from Mr. Mohamed. Mr. Pence was invited to testify before the Committee, and he described his experience below:

Mr. Pence: “What they do is they charge this unbelievable daily rate, $276 a day in my case, and they don’t do jack. They do nothing. So, they give you a rebate on the rent. In my case it was an $1800 apartment I was getting for $600, and within five days they make up for it by charging for all of these services they don’t give. And there's a lot of people in the program who need things who don’t say anything because they are scared of the providers. They threaten you, they intimidate you, they tell you you’re not going to have housing.”

Pence provided the committee with billing records, along with date, time, and location stamped photos that showed he was being billed continuously at his maximum daily rate, even when he was not in the state and could not have possibly received said services. Pence also provided two letters he received from DHS’ Office of Inspector General (OIG) acknowledging receipt of the complaints he submitted dated 10/16/24 and 5/27/2025. He also shared a similar notice sent to his case manager for a report she submitted on his behalf dated 7/2/2025.

Additional documentation was also collected showing other concerns, such as duplicated daily logs for Pence’s service generated by American Home Healthcare and an extensive timeline created by his case manager documenting the several efforts she made with multiple agencies, including DHS, seeking accountability for the provider’s alleged maltreatment of Pence. The case manager’s report also documents her own observations of visiting Pence in the ICS setting, where she was unable to find any staff present. Another incident she described stated that Pence was in need of assistance with a medical issue, but no staff were available to respond.

Pence eventually met with a KSTP reporter who interviewed him.88 When the story was released, it publicly shared many of the details Pence already provided to the Committee staff and highlighted inaction by DHS after nearly a year of complaints. Pence commented on the lack of communication from the Department until his story went public during the hearing:

Mr. Pence: “Channel 5 did a story on me, and after a year of trying to contact DHS and explain to them the massive fraud that is going on in ICS, the next day they happen to call me. I find that to be more than just a coincidence.”

It turns out that DHS did take modest action against the provider. On August 27, 2025, the agency posted a correction order against American Home Healthcare (licensed as American Home Maker Services) addressing Pence’s complaint in the citation below.89

88 Eric Chaloux, “New DHS Investigation into Taxpayer-Funded Care Services for Vulnerable Minnesotans; Man Alleges Provider Told Him to ‘Do It Himself,’” KSTP, Sept. 2025. 89 Minnesota Department of Human Services, Correction Order for American Home Maker Services, License No. 1096117, Aug. 27, 2025.

DHS Correction Order: “Regarding complaint number 202408772, the license holder was to provide P1 with 4.75 direct and two remote service hours daily. The documentation the license holder maintained for September 2024 indicated that P1 was not in the facility from September 13- September 15, 2024. Staff timesheets indicated that staff provided services during this timeframe. Additionally, there were multiple instances between June 30, 2024- October 5,2024 in which P1 did not receive services or was only provided remote services that were recorded on staff timesheets as in-person services provided to P1. The license holder did not provide services in compliance with the requirements of the federal waiver plan.”

DHS acknowledged the accusation that American Home Healthcare had repeatedly billed for services not received and provided the corrective action below for the violation of Minnesota statute 245D.07, subdivision 1.

DHS Corrective Order: “Corrective Action Ordered: On an ongoing basis, you must maintain compliance as required in this subdivision.”

After politely asking American Home Healthcare to not violate the law, the agency left the license active. Multiple new stories, allegations of fraud, mistreatment, and the exact same housing kickback offered to Pence have surfaced since. As of this writing, both American Home Healthcare and Jama Mohamod’s taxpayer-funded assisted living business have active licenses.90

Summary:

It is astonishing that the only action taken by DHS in the face of well-documented fraudulent billing was to issue a “corrective action order.” Although at the time of the hearing in September 2025, ICS was not designated as a “high-risk program,” that changed the next month, when Gov. Walz issued an Executive Order92 designated 14 Medicaid waivered services programs, including ICS, as high-risk. As has been noted in other sections of the report, the “high risk” designation allows DHS to withhold payments and conduct additional site visits. While it is possible those steps have been taken in the intervening months, the Committee has not been able to verify either action. We have requested a list of providers subject to payment withholds but they have failed to respond. Minnesotans expect DHS to take action when there are credible allegations of fraud. Their failure to do so in this case is evidence of their continued malfeasance.

90 A.J. Lagoe, Kelly Dietz, and Gary Knox, “KARE 11 Investigates: Evicted, Homeless, Paying the Price for Minnesota’s Fraud Crisis,” KARE 11, Feb. 11, 2026. 91 Alyssa Chen, “Minnesota Fraud Crackdown Leaving Disabled Medicaid Recipients Without Housing,” Minnesota Reformer, Feb. 16, 2026. 92 Office of Gov. Tim Walz, “Governor Walz Orders Third-Party Audit of Medicaid Billing at DHS,” Oct. 29, 2025.