To catch a fraudster, the state of Minnesota apparently decided to throw a large monkey wrench into the wheels of rural medicine. Following a flurry of federal fraud investigations down in the Twin Cities, the Department of Human Services (DHS) is issuing an aggressive, heavy-handed paperwork mandate with a strict June 1 deadline. The result? Fraudulent companies aren’t the only ones suffering; honest, local medical transport providers have seen frozen reimbursements, and the patients who rely on them for life-sustaining treatments are the ones paying the price. The actions of the state have thrown an entire infrastructure of care providers into disarray.
With a lifetime of experience in nursing homes and health care, State Representative Natalie Zeleznikar (R-Dist 3B) is calling on the governor and DHS to form what she’s calling a “Critical Incident Command Center” to quickly end the insanity and get service providers back on the road. Specifically, providers that offer Non-Emergency Medical Transport (NEMT) services that had not been “revalidated” by June 1, usually through no fault of their own, were moved from “pending” status to “terminated.”
These providers, and the seniors and other Medicaid patients who depend on them, are, in essence, additional victims of the fraudsters whose actions have brought intense public interest in Minnesota. Known as “Minnesota Revalidate 2026,” the DHS rules are part of a brand-new, highly aggressive regulatory mandate launched at the beginning of this year. State health programs generally require NEMT providers to renew their enrollment records every 3-5 years. Under federal directives and Governor Tim Walz, the state executed a massive, sudden “off-cycle revalidation” of every single one of these providers with a strict, non-negotiable deadline of May 31, 2026. The deadline was intended to ensure every highrisk provider passed enhanced federal screening requirements.
Because of the large number of providers in the state, DHS experienced delays in processing the massive influx of paperwork and did not complete its work by the deadline. As a result, many longtime, honest rural transportation providers who had submitted everything on time were still terminated on June 1.
Asked how people like you and me could help, Zeleznikar said, “Call the Governor at 651-201- 3400 and ask him to create an Incident Command Center to resolve this issue with a 1-800 number and DHS experts to triage 10- 50-year businesses with long-standing records in MN before more closures happen due to revalidation terminations.”
In a Facebook video posted on June 4, Rep. Zeleznikar joined Katie Collins, Regional Director of Monarch Healthcare Management, which operates Waterview Shores in Two Harbors, to address the NEMT crisis there. Collins pointed out that it is not only harder for Waterview residents to find transportation to medical appointments, but also that costs once reimbursed by DHS are now unexpectedly borne by Waterview itself. That diversion of expense will not be sustainable. She went on to say that over her 15 years overseeing Waterview Shores, the current transport providers have been a reliable resource.
Zeleznikar said that many of the NEMT providers impacted by the DHS actions have been in business serving clients for 20 years or more. “The saddest part [of this] is when great providers can’t service vulnerable adults,” she said. She and other legislators have pointed out that a simple “deficiency notice” would have allowed providers to fix any honest clerical errors, yet the terminations stand, leaving local operations temporarily banned from billing the state and rural patients stranded without rides.
Complicating matters, the 2026 legislature passed a sweeping change to the administration and reimbursement of Non-Emergency Medical Transportation under the Minnesota Medical Assistance program. The new rules fundamentally change the maximum reimbursement rates and mandate that the state contract NEMT program administration on a strict statewide or regional basis. The deadline for these major “fee-for-service” contract shifts is set for July 1. Rural providers in the Arrowhead have been scrambling throughout May and June to adjust to these newly imposed state-mandated contract limitations.
One of those providers scrambling in the Arrowhead is Two Harbors’ own Cardinal Comfort Care Cooperative, which operates its non-emergency medical transportation wing as Redbird Transportation. It provides a variety of support services, such as residential and respite care. Its team of dedicated professionals is committed to fostering an environment where every client can thrive and enjoy a fulfilling life.
Massive, top-down state overhauls like the one DHS has embarked on threaten to leave local patients stranded without a ride or an in-home aide. It is small, localized, worker-owned operations like Cardinal that step into the gap and keep the community afloat, for as long as they can.
Sitting down with Susie Rosette, CEO of Cardinal, and Jake Rosett, its CFO, it is instantly clear that DHS’s actions are having a brutal effect. Rosett credits its DHS-reimbursed services for at least 70% of total revenue. Under the pre-payment reviews that DHS instituted earlier this year, reimbursement of tens of thousands of dollars is in limbo.
The staff at Cardinal is now focusing on how to change operations to reduce or end reliance on DHS. “It’s the workers who are really struggling [with the uncertainty],” said Rosette. As CEO, she, echoed by Rosett, sees this action by the state as a direct assault on their business and its employees.
“We did do a fun thing though the other day,” Rosette said. The staff congregated around the meeting table and shared tears and frustration. Someone suggested they get in the car and drive down to the shore of Lake Superior. After throwing rocks to relieve stress and skipping stones competitively for about 20 minutes, Rosette said everyone was chill. “We’re tough,” she added, “We’ll make it.
