Donna Grethen, Tribune Media Services


"We are confident in the integrity of Minnesota's Medicaid program. For 27 years it has operated under the oversight of five governors (Democrat, Republican, Independent) and 10 commissioners. Hundreds of independent audits and outside reports have been conducted. Over time and across the political spectrum, the program has operated with integrity. We expect the congressional subcommittees will concur."

-Julie Brunner, executive director, Minnesota Council of Health Plans

Editorial: Congress ramps up Medicaid scrutiny

  • April 21, 2012 - 7:06 PM

Because of its high-quality, low-cost medical care, Minnesota is often lauded nationally as a health care reform pioneer and as the state that gets it right.

But Minnesota is now under an unaccustomed, unflattering spotlight. On Wednesday, the state's Medicaid program will be a key focus of a congressional hearing probing potentially deep flaws in federal and state oversight of this nationwide safety net program.

Medicaid provides care for more than 50 million poor and disabled Americans. It's run at the state level, with the federal government matching state dollars spent or sometimes paying even a greater share of the cost.

The congressional hearing validates the questions raised repeatedly by this page and by some state lawmakers about whether Minnesota overpays private health plans to administer Medicaid care. Like many states, the state outsources some coverage to private insurers -- a $3.8-billion-a-year business here.

The plans' recent profits from their Medicaid contracts, as well as an unexpected $30 million giveback to the state last year by one of these insurers -- UCare -- heightened concerns. This spring, the state's four big nonprofit plans -- Blue Cross, Medica, HealthPartners and UCare -- returned $73 million to the state in a one-time deal brokered by Gov. Mark Dayton's administration.

Two separate federal investigations of Minnesota's Medicaid program are underway. One involves the U.S. Department of Justice. The other is led by U.S. Sen. Chuck Grassley, R-Iowa.

Key questions: Has Minnesota improperly drawn down federal Medicaid matching dollars by overpaying health plans for this program while underpaying the plans to run state-only medical assistance programs? If so, how long has this gone on?

Two subcommittees of the U.S. House Committee on Oversight and Government Reform -- chaired by Republican Rep. Darrell Issa -- will hold the Wednesday hearing. The fact that two key Minnesotans are on the list of eight witnesses suggests that the state will be closely scrutinized.

Minnesota Human Services Commissioner Lucinda Jesson is scheduled to testify. So is David Feinwachs, a fired former Minnesota Hospital Association attorney who has repeatedly raised questions about Medicaid fraud.

A top official from the federal agency charged with Medicaid oversight -- the Centers for Medicare and Medicaid Services -- will testify, as will the health care director for the Government Accountability Office. Grassley and Republican U.S. Rep. Michele Bachmann of Minnesota are also on the list, as are a Texas provider and a New York Medicaid official.

The Minnesota Medicaid questions deserve a thorough airing, but this congressional hearing must go beyond it to ask broader questions about national Medicaid oversight. This sprawling program costs taxpayers more than $400 billion a year. Concerns about abuse have lingered for years because of its split state-federal structure.

If there are oversight problems in Minnesota, problems may well exist in other states, most of which have much bigger Medicaid programs. The bill for New York's Medicaid program is more than $49 billion a year. Minnesota is a Medicaid minnow, with total spending around $7 billion.

Minnesota may be ahead of the curve in uncovering Medicaid oversight problems. That's a different type of health care pioneer role than the state is used to, but a worthy one nonetheless.

State policymakers should closely monitor the congressional hearings, then work even harder to bolster this critical program's integrity.


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