Committee report: Periodic Data Matching

Nineteenth Meeting - Periodic Data Matching (PDM) Hearing Date: Monday, March 9, 2026114

Background

While secret recordings and FBI raids are of great importance and make headlines, a key learning from the many hearings and investigations done by our Committee is that process and internal controls might matter even more. Perhaps the best example of this is the story of Periodic Data Matching (PDM). PDM is an eligibility verification tool which the Department of Human Services (DHS) is supposed to use on annual basis to check if people receiving Medicaid benefits are actually eligible. PDM uses existing databases to check matters such as recipient location, whether the recipient is alive, income status, and other data.

Through its investigations and hearing, the Committee learned that DHS had completed it’s mandated PDM report only twice in its history, and not since 2020. At the hearing, the Committee pressed DHS to fulfill its statutory obligation to release a PDM report as soon as possible. Members of the Committee pointed out that DHS’ failure to conduct a basic oversight practice may have allowed tens of thousands of Minnesotans to improperly receive benefits. This, in turn, has may cost Minnesotan tens of millions of dollars.

The Committee is pleased to report that its public pressure forced DHS to finally conclude a PDM exercise on March 20, 2026. DHS found that 31,529 ineligible Minnesotans were receiving benefits and were subsequently removed from the rolls.

As a new federal requirement that Medicaid eligibility renewal occur every six months comes into effect, the Committee believes that DHS must act more aggressively to safeguard taxpayer money. Using modern tools and technology to more frequently evaluate eligibility provides the opportunity to pay out less benefits to ineligible individuals.

Note: DHS leadership was invited to attend this hearing to answer questions regarding why the agency has failed to conduct statutory-required PDM reports, but it declined to attend. However, DHS leadership attended a Ways and Means hearing in the same room immediately following the hearing.

Finding: Periodic Data Matching has successfully removed tens of thousands of ineligible recipients, reducing the risk of fraud.

In 2015, the legislature required DHS to conduct the PDM process every year.115 The new law also required the agency to provide an annual report to the legislature stating the number of individuals flagged for potential ineligibility and the number of individuals actually terminated by DHS as a result of this process.

114 YouTube video, House Fraud Prevention and State Agency Oversight Policy Committee 3/9/2026. 115 Minnesota Statutes section 256B.0561

Following the implementation of PDM in August of 2018, DHS published its first review in September of 2019.116 As a result, 22,990 individuals had coverage terminated from MA and MinnesotaCare in a ten-month period. In their second PDM report published in August of 2020, 18,900 had coverage terminated in a seven-month period.117 Clearly, the PDM process is a powerful tool to lessen the possibility of fraud and to ensure that only eligible people receive Medicaid dollars.

Finding: DHS has failed to conduct mandatory PDM reports since COVID. The Walz Administration has fought this integrity effort since its inception.

During the COVID-19 pandemic, Congress passed the Families First Coronavirus Response Act (2020). One provision required states to provide “continuous coverage” for Medicaid recipients in order to receive enhanced federal funding. This meant states generally could not terminate Medicaid eligibility for most reasons during the emergency, which had the effect of pausing PDM.

In 2021, the legislature suspended PDM for one year following the end of the federal public health emergency. Since the public health emergency ended in 2023, PDM should have re-staretd in May of 2024. However, in 2023, the legislature required DHS to wait twelve months after the start of eligibility renewals to reinstate PDM. In May of 2024, DHS announced the resumption of PDM in a bulletin,118 but DHS proceeded to miss two reporting deadlines on September 1st, 2024 and September 1st 2025 without giving an explanation.

The Committee heard testimony from former Speaker Kurt Daudt, who described the difficulty the Legislature had in enacting PDM in 2015:

Former Speaker Daudt: “Not only did the administration fight me tooth and nail on not wanting to put this into statute, but once we did get it into statute, it took four years to implement the program… There are many other states that do this, many of them don’t need legislation to compel the administration to do this sort of check. This is just common-sense stuff.”

Speaker Daudt described that former Governor Dayton’s administration strongly opposed PDM, but ultimately accepted the provision in budget negotiations. Following its passage, the Dayton and Walz Administrations slowed implementation of PDM for four years, allowing tens of thousands of ineligible Minnesotans to fraudulently claim Medicaid benefits.

Former Speaker Daudt: “During the 18 month term this program was in use, 37,552 ineligible people were thrown off of these public programs. They were people who did not qualify, they should not be receiving those dollars. I was shocked to find out that this program had never been reinstated. I started reaching out to folks and found a couple of people who had reached out to the department and gotten excuses as to why it wasn’t or why it was delayed. The reality is very simple. This program has been very successful. It did curb fraud in the State of Minnesota. I will

116 Minnesota Department of Human Services, Periodic Data Matching Annual Report, Sept. 25, 2019. 117 Minnesota Department of Human Services, Periodic Data Matching Annual Report, Sept. 1, 2020. 118 Minnesota Department of Human Services, Bulletin #24-21-05C, “DHS Announces Minnesota Health Care Programs Post-Unwinding Eligibility Policies,” May 21, 2024.

state verry clearly, the Walz administration is currently defying state law to allow fraud to happen, and this is a prime example.”

Summary:

While Periodic Data Matching is a good idea, and the law, it also just good governance. Given the widespread and inexpensive availability of data, efforts like PDM should be robustly employed by every administration. Minnesotans want and expect that public dollars will only be spent on people who are eligible. The intentional decision by the Dayton and Walz Administrations to ignore and slow the implementation of PDM is simply inexcusable.

The Committee is left with concerns that the Administration want benefits to go to people who are either ineligible or fraudsters. While we hope this is not the case, robust and timely compliance with the new federal six-month PDM requirement will go a long way in dispelling this concern.

We hope future Administrations will join the Committee in diligently and energetically using PDM and other tools to prevent fraud and ensure that only eligible Minnesotans receive benefits.