Minnesota responds in Medicaid probe

  • Article by: WARREN WOLFE , Star Tribune
  • Updated: June 19, 2012 - 9:29 PM

At issue is whether the state overcharged U.S. taxpayers.

Responding to an inquiry from federal regulators, Minnesota officials insisted in a letter made public Tuesday that the state followed proper accounting procedures in structuring the way it paid private health plans to care for poor, sick and disabled people between 2005 and 2009.

The six-page letter was part of a weeks-long exchange between the state officials and federal regulators who are investigating whether Minnesota overcharged federal taxpayers, who pay half the bill for Medicaid, in order to subsidize health programs financed by the state.

While the letter answered questions from the federal Centers for Medicaid and Medicare Services about how the state calculated rates paid to managed-care nonprofits, there were no questions that asked specifically whether the rates were accurate or inflated.

In the letter, both federal questions and state answers are steeped in the technical jargon of actuarial estimates and insurance rate-setting. The letter was accompanied by 49 pages of background data produced from 2005 to 2009.

"We are still gathering more information. There's still more to be learned," said state Medicaid Director David Godfrey with the Minnesota Department of Human Services. "Our evidence indicates that the Medicaid rates and the methodology we used were proper."

His letter points out that most Medicaid rates in Minnesota now are subject to competitive bidding, a change from previous years.

But he noted in the letter and an interview that many state officials who set Medicaid payment rates from 2005 to 2009 no longer are in state government because they were part of the administration of Gov. Tim Pawlenty, which ended in January 2011. Godfrey said those former officials might have more information than he has uncovered so far.

Separate investigations also are being conducted by the U.S. Justice Department and by Congress, where officials have said they are concerned that many states may be overcharging federal taxpayers for Medicaid health care.

Warren Wolfe • 612-673-7253

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