Minnesota's Human Services Commissioner Lucinda Jesson will testify Wednesday at a hearing in Washington on government oversight of Medicaid programs.
She's expected to tell members of Congress what Minnesota is doing to make sure it's getting a good deal with the managed care plans that carry out the Medicaid programs.
But there's also expected to be questions about a $30 million donation the state received last year from one of those health plans. Earlier this week, state officials announced they'll return about $15 million of that $30 million back to the federal government.
MPR News reporter Elizabeth Dunbar talked to The Daily Circuit about the controversy:
Dunbar: This money was from UCare, a nonprofit health plan that works with the state. It's also known as an HMO. When it was announced last year it was characterized as a voluntary donation to the state. UCare says its profits were larger than expected and since it is a not-for-profit health care company it wanted to share some of that with the state. But some people have questioned that donation since then, including U.S. Senator Chuck Grassley of Iowa.
Weber: What was he concerned about?
Dunbar: The way Medicaid works is that the state and the feds essentially split the costs. So his question was -- if this health plan is carrying out a Medicaid contract and Medicaid is both a state and federal program, any money going back to the state needs to be shared with the federal government. The state had always maintained that this was nothing but a gift, not to be shared. And Human Services Commissioner Lucinda Jesson also said she contacted the federal government about it at the time and explained what was going on so no one would be suspicious.
Weber: Did she indicate whether the feds had a problem with it at that time?
Dunbar: The commissioner says at the time the federal Medicaid officials didn't indicate they saw any issues with the donation.
Weber: But this week the state changed course, right?
Dunbar: Right, the state announced it will give $15 million to the federal government. So that donation to the state becomes $15 million instead of $30 million. Commissioner Jesson still says they consider it a donation, but because of the way UCare characterized it as an administrative expense, she says her department will roll it into a separate agreement with the HMOs that caps their profits.
Weber: Tell us more about that cap. Is that related to UCare?
Dunbar: Yes. The Dayton administration negotiated with all of the HMOS, UCare included, to cap their profits at 1 percent and return any excess to the state. That agreement took effect for this year, and the HMOs will pay back $73 million to be shared between the state and federal government. That donation UCare gave the state will become part of those funds.
Weber: What are we expecting members of Congress to ask Minnesota at this hearing?
Dunbar: The UCare donation will probably come up, and you might expect Commissioner Jesson will be under a lot less pressure now that the state says it's going to share the money with the feds. But Sen. Grassley issued a statement this week saying he's still suspicious. He says he still wants to know if the state is gaming the federal government to get more money out of Medicaid. The congressman who organized these hearings Republican Darrell Issa of California is known to be pretty aggressive so I'd expect the commissioner will have to go on the defensive.
Weber: And there's another Minnesotan testifying isn't there?
Dunbar: Yeah, it's David Feinwachs. He's an attorney who has raised questions about whether these HMOs were profiting off of Medicaid programs. He's called for greater oversight of the health plans at the state level and state lawmakers from both parties have been listening.
Weber: What is the political background here?
Dunbar: The subcommittee holding his hearing is a House subcommittee... and the House is controlled by Republicans. The Republicans are against the federal health care overhaul that President Obama pushed. An expanded Medicaid program is a big part of the whole overhaul.
So if these Republicans can somehow show that there's waste or fraud happening in Medicaid, that helps them make the case to the American people that this health care law should be repealed. On the other side of it you have our state human services commissioner, who was appointed by Gov. Mark Dayton, and he's a Democrat who supports the new health care law.