The ranking member of the U.S. Senate Judiciary Committee sent a letter to Gov. Mark Dayton Thursday asking why UCare, a Minnesota health plan company, repaid $30 million in Medicaid funds to the state as a "gift," rather than a reimbursement.
In the letter, Sen. Chuck Grassley, R-Iowa, said he's concerned that the way the funds were returned was meant to avoid reimbursing money to the federal government.
Grassley was referring to emails sent by Minnesota Department of Human Services Commissioner Lucinda Jesson in March 2011, in which she described how UCare should draft its press release about returning the Medicaid funds to the state.
"In order to have a good chance of keeping all of this money, it must be characterized as a donation. If a refund, feds clearly get half," Jesson wrote in an email.
A Dayton spokesperson said Jesson is representing the administration's stance on the issue.
Jesson told MPR News that she briefed Cindy Mann, director of the federal Center for Medicaid and State Operations on the situation before the repayment was announced.
"UCare came into my office on a Monday and said we're donating $30 million back to the state in light of a number of things including the historic budget deficit," she said. "I told my staff to characterize it that way because that's what they told me they were doing."
Jesson said she is cooperating fully with Grassley's inquiries.
Grassley also sent a copy of the Jesson emails to U.S. Attorney General Eric Holder because he said they would be relevant to an "investigation into Minnesota's Medicaid managed care programs."
Jesson told a Minnesota House committee in February that she had observed that health plans providing Medicaid services were sometimes making more money than commercial insurance, but that she didn't see any evidence of wrongdoing.
"I didn't believe that we needed more accountability ... that we're leaving money on the table because I thought that there was any fraud going on," Jesson said at the February hearing.
Grassley also sent letters requesting information from UCare, HealthPartners, Medica and Blue Cross Blue Shield regarding Minnesota's Medicaid program.
READ THE LETTERSGrassley Letters