DHS discovers more improper payments, counties asked to chip in

New Department of Human Services Commissioner Jodi Harpstead
Department of Human Services Commissioner Jodi Harpstead takes questions from state senators in September.
Anthony Souffle | Star Tribune via AP file

The Minnesota Department of Human Services has uncovered more improper payments, and counties and tribes are on the hook to help pay the money back.

The payments total more than $10 million and include improper checks to substance abuse providers, a welfare assistance program and child foster care services. They come on top of the recent discovery of $29 million in overpayments the department made to two state tribes over a span of more than a decade for substance abuse treatments.

DHS Commissioner Jodi Harpstead, who took over the agency in September, said uncovering these issues is part of her mission during her first three months in office.

“The plan for my first 90 days as commissioner includes rooting out billing and payment problems in the Department of Human Services, being transparent about them, and using what we learn to build a new system of process controls that prevents them from happening in the future,” she said.

Counties will have to help pay off $8.8 million in funds the state improperly billed the federal government for substance abuse disorder treatment services that were provided in facilities that were not eligible for federal matching funds.

DHS must also cover $727,000 it improperly clawed back from individuals for overpayments in cash welfare assistance, and counties and tribes will not get reimbursements for more than $600,000 in payments to foster care facilities where some adult staff had yet to get required background checks.

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Gov. Tim Walz said his administration is trying to root out past issues and correct them.

"These are not the last of the issues we are going to surface,” Walz said. “Our goal is to put a plan in place to change the process, to work with the Legislature to find a way to make this agency as effective and efficient as possible."

But the news, following a string of other controversies, has triggered a discussion in St. Paul about trying to break up the massive agency, the largest in state government with a budget of $18 billion every two years.

Legislators plan to discuss breaking up the agency when they reconvene in February.