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Human Services says it must repay feds $48M for improper payments

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Updated: 3:57 p.m. | Posted: 10:54 a.m.

The Minnesota Department of Human Services says it must repay the federal government an estimated $48 million that it paid to ineligible chemical dependency treatment providers.

Back in May, the Centers for Medicare and Medicaid Services ordered the state to cease the payments to as many as 100 inpatient providers classified as "institutions for mental diseases." It said Medicaid money generally can't be used for treatment in such facilities. It ordered repayment but didn't specify a dollar amount.

Following the Human Services Department’s announcement, two Republican state lawmakers called on DFL Gov. Tim Walz to launch an independent audit of the department. Reps. Deb Kiel of Crookston and Nick Zerwas of Elk River sent a letter to Walz Tuesday requesting the audit. 

Zerwas said neither the administration nor House DFL leaders have given the issue enough attention.

“A third party audit would be a good way to really get to the bottom of what’s going on and understand the scope of the problem within the department,” said Zerwas. 

On Monday, the Department of Human Services said the estimated cost to the state will be $48 million. That's on top of the $25 million the agency overpaid to two tribes for substance abuse treatment under Medicaid. 

Altogether, the St. Paul Pioneer Press reports, the errors will cost the state $73 million.

Gov. Walz said last week that he’s counting on his new DHS commissioner, Jodi Harpstead, to take corrective steps when she begins leading the agency next month.