“DHS and our state and federal partners have seen evidence that kickbacks are occurring in Minnesota,” Inspector General Kulani Moti said in a statement. “That’s why we brought an anti-kickback proposal to the Minnesota Legislature last session. We will continue to work with the Legislature next session on ways to strengthen the integrity of our public programs.”

Nuway Alliance, one of the state’s largest nonprofit providers of substance abuse treatment, pays up to $700 a month for someone’s housing while they are in intensive outpatient care. it says on the organization’s website. The website lists dozens of sober living programs that customers can choose from.

Nuway leaders said they received a request from the government about two and a half years ago indicating that they are conducting a civilian inquiry into the housing model.

But officials with the nonprofit said in an email that they believe what they are doing is legal and that customers need it. More than 600 people use its assistance to stay in recovery housing, Nuway officials said. They said having a safe, supportive place to live is especially important for the vulnerable people they serve, more than half of whom reported being homeless in the six months before starting treatment.

Health plans knew about, approved and even touted their programs, Nuway executives said, noting that the health insurance company UCare even gave it an award.

“The state of Minnesota has been fully aware of our program for a decade,” the organization said. “Since payers are fully aware of and support the program, we struggle to see how anyone could argue that it is inappropriate, let alone fraudulent.”