Committee adopts DE4 to HF1767, directs legislative study of Integrated Community Supports and lays bill over

A House Human Services Committee moved on House File 17 67 on Monday after adopting amendment DE4, which would pause changes to Minnesota's Integrated Community Supports (ICS), create a small legislative study group to redesign the service, preserve the Department of Human Services' (DHS) authority to investigate fraud, and set a timeline for a replacement plan. The committee laid the bill over after discussion.

The sponsor told the committee that HF1767, as amended, shifts the Legislature's approach away from codifying the current ICS model and instead establishes a smaller, bipartisan legislative work group to ask what ICS should look like "so that it's not vulnerable to fraud" while still meeting recipients' needs. The sponsor said the amendment asks DHS to pause major program changes for approximately six months while the work group develops a transition plan, but that DHS enforcement actions and investigations would continue during the pause.

A witness testifying in support, who did not give a personal name in the transcript, urged caution about ending a program that reached statewide implementation just over five years ago but said current implementation "isn't working the way anyone intended." The witness argued that much of the program's apparent growth reflected reclassification under a CMS-approved waiver rather than new enrollees and urged that "this bill does something far more responsible. It creates the space to intentionally rebuild so that the program integrity is not retrofitted onto a fragile system." The witness emphasized that the proposal preserves DHS's ability to investigate fraud and seeks clearer rates, documentation, and guardrails in any successor service.

A second testifier, introduced as the board chair of the Residential Providers Association of Minnesota and identified in the transcript by role and affiliation rather than a full personal name, told the committee that providers had documented structural gaps in ICS and supported the amendment as an alternative to the governor's proposal to convert ICS to 15-minute unit billing. The provider described two operational models currently treated under one rate framework'a site-based model with staff onsite and a scattered-site model in which staff travel to independent apartments'and said treating them identically creates operational and compliance risks. The provider also said there is no statutory recognition for some staffing models, no standardized setting approval process, limited coverage for nursing and transportation, and no reliable public data on settings and occupancy.

Committee members asked whether the legislative study group would change funding shares or county/provider responsibilities; sponsors said the amendment does not itself change who pays for services and that any structural funding changes would require separate legislation. Members also pressed for data and reporting tools to help the work group identify where problems are concentrated. DHS staff (identified in the transcript as Mr. Bird) told the committee that the department already collects claims, case-mix and service documentation and has authority to request records and oversee audits; the work group can review that information and recommend whether statutory authorities need codification or strengthening.

Members asked whether a pause in structural changes could hinder DHS's ability to act on credible fraud allegations. The sponsor and vice chair said the amendment preserves DHS's investigative authority and that language could be tightened if necessary to ensure immediate enforcement where clear evidence of fraud, waste or abuse exists. The record also shows the existing moratorium on ICS expansions remains in place, though committee members said an exception process published by DHS had been repeatedly delayed.

After roughly an hour of testimony and questions focused on program design, data and oversight, a member moved to lay HF1767, as amended by DE4, over for possible inclusion later; the committee accepted the motion and the bill was laid over.

What's next: The amendment directs a legislative study group to meet publicly with stakeholders and staff to draft recommendations and a transition plan for a successor service. The committee record notes an aggressive timeline (about six months) for the work group to deliver recommendations, and sponsors said they expect to introduce follow-up bills based on the group's work.