The Minnesota Department of Human Services (DHS) fired back Tuesday at GOP congressional investigators who have been questioning the accuracy of Commissioner Lucinda Jesson’s characterization of a $30 million payment from a state Medicaid contractor.
A letter to congressional investigators signed by DHS counsel Amy Kaldor Akbay said the department has tried to resolve the issue “in good faith” and that committee allegations to the contrary are based on “hearsay.”
The 2011 payment from UCare, which manages Medicaid patients for the state, has been the focus of an ongoing probe of Medicaid fraud by the House Oversight and Government Reform Committee, led by California Republican Darrel Issa.
Jesson repeatedly called the payment a “donation” in an April hearing in Washington, saying she took that characterization from UCare President and Chief Executive Nancy Feldman. But committee investigators who interviewed Feldman privately last month in Washington say that she “denied” that she or any other high-ranking UCare officials ever referred to the payment as a donation.
UCare officials have generally been calling the payment a “contribution.”
Citing Feldman’s statement to investigators, which has not been made part of the public record, committee staff wrote to Jesson on June 28 offering her a chance to “clarify or correct” her testimony.
The DHS’ response is that there’s nothing to correct, saying the term donation is “interchangeable and synonymous” with a contribution.
UCare spokesman Dan Ness backed up the DHS response: "We have consistently described the money we gave to the state as a contribution," he said in an email. "However, we did not see the difference between the terms 'contribution' and 'donation.' The contribution was not paid to the state out of any obligation, but was a completely voluntary action intended to help the state address its large budget deficit. After we made our contribution, it was between the State and federal government to determine how the funds were allocated."
Akbay’s response also called the congressional panel’s recent letter “challenging” in that it requested that Jesson “respond to comments made in a context that amounts to hearsay – questioning conducted privately, without record and presented by third-party characterization.”
Congressional investigators have been pressing the point for months, citing an internal email from Jesson in 2011 stating that it was important to call the payment a donation in order to keep the money for the state.
Any other kind of repayment would entail splitting the money with the federal government, which shares the costs of the Medicaid program for low-income patients. That is ultimately what the state agreed to do.


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