Medicaid controversy updates

April 25, 2012

Posted by Matt Ehling

Today, U.S. Congressman Darrell Issa will convene hearings on the use of Medicaid funds by state governments – including Minnesota’s. State DHS Commissioner Lucinda Jesson is slated to testify at the hearing, as is attorney David Feinwachs, the former chief counsel of the Minnesota Hospital Association.

In recent months, Commissioner Jesson has had a highly visible role in the unfolding controversy over the use of Minnesota’s Medicaid funds. In February, she announced the existence of a federal probe into the state’s use of Medicaid dollars to underwrite its public health care programs. Such programs are administered through non-profit HMOs, who receive blocks of state and federal money.

The federal government – through its Centers for Medicare and Medicaid Services (CMS) – has expressed particular interest in a $30 million dollar payment made by the HMO UCare to the State of Minnesota in 2011. The payment was made in the midst of a legislative session that featured proposals that would have submitted HMOs to additional auditing and oversight.

At the time, UCare’s CEO Nancy Feldman characterized the payment as a donation of excess “operating margin” from the public programs administered by UCare, rather than as a direct reimbursement for unused, pre-paid funds. Some federal officials have contended that a reimbursement would have entitled the federal government to half of the payment, due to the federal Medicaid match that the state’s public health care programs receive.

State officials – including Jesson – also characterized the UCare payment as a contribution up until April 23rd, when the State of Minnesota agreed to give half of the UCare payment to the federal government. Minnesota Public Radio has the story, including a link to a letter from Minnesota Medicaid Director David Godfrey to CMS.

PRM recently ran a document-based story on the history behind the Medicaid controversy.