Advocates say thousands of legitimate Medicaid service providers are getting swept up in Minnesota's fraud crackdown.

Why it matters: Many of these companies and nonprofits provide critical support for Minnesotans who rely on government-funded programs for autism, mental health and disability services.

Driving the news: State officials disclosed this week they will disenroll 3,411 providers following a request from the federal government to "revalidate" all 5,000 providers across 13 programs deemed at high risk of fraud.

• Just 59 of those were referred for fraud investigation, per the Department of Human Services.

Threat level: Many Medicaid service providers operate on small margins, advocates say, so even a temporary pause in reimbursements from the government can create big issues.

• "Essentially all of our revenue has been disrupted," Jordan Hansen, an addiction recovery services specialist who says he was wrongly disenrolled, told MPR News.

The big picture: The stakes were high for the state, too: The federal government is threatening to withhold billions in critical funding over fraud concerns.

• Revalidating providers was seen as key to keeping that funding flowing.

What they're saying: Department of Human Services deputy commissioner Shireen Gandhi told the Star Tribune that providers who appeal the state's decision can be reapproved quickly once they submit the proper paperwork.

Yes, but: Critics of DHS' approach say it's causing unnecessary "chaos."

• "In the name of finding a small percentage of dishonest providers, they are disrupting a major portion of the system for the individuals who can least afford their system to be disrupted," GOP state Sen. Jim Abeler told the paper.

The other side: GOP Rep. Kristin Robbins, chair of the House's fraud prevention committee, called the findings "astonishing and problematic" and said the high number of providers that failed to meet the standards highlights a "complete failure or management and internal controls" at DHS.

Between the lines: DHS, which conducted site visits and took other efforts to verify whether providers were legitimate, says the majority of those impacted had submitted "incomplete or inaccurate administrative data."

• In some cases, the process surfaced serious issues, such as licensed specialists saying they didn't actually work for providers that claimed to employ them.

Yes, but: Some providers say they never got a site visit or weren't told what paperwork was missing as DHS rushed to get the job done, per MPR.

What's next

A long-anticipated apartment development at the corner of 50th Street and Lyndale Avenue in Southwest Minneapolis has pivoted to condominiums.

Why it matters: For-sale condos have been rare in the Twin Cities, especially outside downtown.

What they're saying: "There is definitely a demand for condo projects in these various Minneapolis neighborhoods where there hasn't been anything like this before," said Isaac Kuehn, Realtor for DRG, which is listing the 15 units in the building.

• Their target demographic is people who live in nearby single-family homes and want to downsize without leaving the neighborhood.

Details: The four-story building, designed by Christian Dean Architects and developed by Master Properties, both based in Minneapolis, is called Washburn House.

• Asking prices range from $800,000 for a 2-story, 2-bedroom, 2-bathroom unit on the building's lower levels to $1.5 million for penthouses with three bedrooms.

What we're watching: Construction will begin once the team pre-sells seven of the 15 units, Kuehn said.

Take a look around

🤷‍♂️ Minnesota Republican Party endorsement drama continued yesterday as chair Alex Plechash voted with the MNGOP board to walk back his own previous statement giving non-endorsed candidates his blessing to compete in the primary against winner Kendall Qualls. (Background via Axios)

🗳️ State Rep. Elliott Engen (R-Lino Lakes) — who was charged with DWI earlier this year and recently dropped his bids for state auditor and lieutenant governor — withdrew from the race for his current state House seat shortly after filing. (Alpha News)

🏊 Elevated blue-green algae levels prompted Minneapolis parks officials to issue a warning to swimmers at Lake Nokomis. (Fox 9)

🔮 Minnesota has a new Fortune 500 company: APi Group, a New Brighton-based collection of safety, security and infrastructure businesses, is the state's 18th entry on the list. (Minneapolis/St. Paul Business Journal)

🏒 The Frost locked in stars Taylor Heise and Kelly Pannek with new three-year contracts that protect them from being poached by other PWHL teams during the league's upcoming expansion process. (KSTP)

The Nice Ride bike share program that ended its operations in 2023 could be coming back to the Twin Cities.

Pedaling the news: Minneapolis-based environmental nonprofit Great Plains Institute (GPI) bought Nice Ride's assets three years ago.

• It's working to secure funding — possibly by tapping a metro-wide sales tax meant for transportation — to get them back on the streets, according to MinnPost.

Flashback: After a 13-year run, Nice Ride, a pioneer in bike sharing, lost its major sponsor, Blue Cross Blue Shield, and faced significant costs to upgrade the system.

What we're watching: GPI told MinnPost it wants to add e-bikes to the mix this time. New docking station technology allows for more flexible locations, too.

• There's no timeline on a return.

🗓️ Mark your calendar with our Event Board.

Dirty Dancing at the Ordway Aug 12 - Sept 6th: A thrilling new production of the beloved story set to live music from the original film.

In which region of Minnesota would you spend a summer vacation … if you couldn't leave that part of the state for two weeks?

📣 We want to know which vacation zone you would choose from this map, first created by X user @TonyLiebert.

• Click here to take our quick poll! We'll share your answers in a future newsletter.