ST. PAUL (KVRR/FOX9) — Gov. Tim Walz announces a major plan to modernize and centralize the Department of Human Services as part of an effort to crackdown on fraud in Minnesota’s Medicaid programs.

The state will shift away from “complex, layered administration managed by a patchwork of counties, Managed Care Organizations, and state agencies” to a centralized entity run by the state.

The state will upgrade its Medicaid administration systems, which the governor says are “grossly outdated.”

The budget director put the costs of the state takeover of county eligibility responsibilities at $17 million in the first budget cycle and $55 million in the next cycle.

“We’re aggressively attacking fraud and it keeps us in the news which I’m perfectly fine with because in the 10 months that I’ve got left, it’s my intention that we leave Minnesota with the strongest program, uh, integrity and that we have a good step forward into a modernization effort that should have happened a long time ago,” said Walz.

The Trump administration has threatened to withhold millions in Medicaid funding unless the state makes necessary changes to reduce the risk of fraud.