Feds investigate Minnesota’s handling of Medicaid

Published 1:14 pm Wednesday, February 15, 2012

ST. PAUL, Minn — The federal government is investigating how Minnesota administers Medicaid health insurance coverage for poor people, but few details are available on the nature of the inquiry, a leading state health official said.

Department of Human Services Commissioner Lucinda Jesson told a legislative committee Tuesday that she found out about the investigation when federal authorities contacted her last summer. But she said she was not allowed to say what federal agency was leading the investigation, nor could she talk about scope of the query.

She also she didn’t know whether the investigation creates a financial risk for the state.

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“I don’t know the scope of their investigation or what they’re looking at or, frankly, how serious it is,” Jesson told legislators. “We are fully cooperating.”

Messages left by The Associated Press with the regional spokeswoman for the U.S. Centers for Medicare and Medicaid Services weren’t immediately returned Wednesday. A spokeswoman for the U.S. attorney’s office in Minnesota said she couldn’t confirm or deny the existence of any investigations.

The probe came to light at a hearing that focused on transparency and rate-setting around the state’s health care coverage for poor Minnesotans. Attorney David Feinwachs, a critic of the state’s nonprofit health care plans who formerly worked for the Minnesota Hospital Association, told the panel that the plans earn more from administering state plans for Medicaid than they do on commercial plans.

The state will spend about $3.3 billion on Medicaid this year, and $3.6 billion next year. The program provides coverage for about 733,000 Minnesotans, and the majority of recipients have their care managed by private health maintenance organizations.

Gov. Mark Dayton told Minnesota Public Radio he welcomed the investigation and his administration has nothing to defend.

“But if we can save dollars, if there are dollars being misspent, we want to know about that so we can correct it going forward,” he said.