Human services agency's plan for Medicaid audit touching off questions

By Jackie Crosby

Department of Human Services Commissioner Lucinda Jesson's decision earlier this week to hire an outside auditor to examine Medicaid rates paid to the private health plans has caused some ripples among insiders.

The rate-setting process is the subject of several federal investigations and has drawn fire from lawmakers in Washington, D.C. and St. Paul. Jesson said she wants an investigation to look at the years 2003 to 2011 to address the issue "once and for all."

In a July 23 letter to key legislators, Jesson wrote that the application for prospective outside auditors "was developed after consultation from the Legislative Auditor."

But Legislative Auditor Jim Nobles followed up in a letter of his own, saying the "consultation" was pretty minimal - an e-mail and brief phone call regarding the timetable to deliver a final report.

"The issue is big enough, sensitive enough and the statement of the commissioner was misleading enough that I thought it needed clarification," Nobles said in an interview.

Nobles' office already has responsibilities to monitor the Medicaid program, the state-federal program for the poor, and in 2013, it will also have authority to hire outside auditors.

Nobles thought it "unrealistic" that any firm could investigate something as complex as multiple years of Medicaid data and to face financial penalties if it couldn't produce a report within 30 days. He also viewed the deadline as "arbitrarily set by the department."

DHS officials said they adjusted the proposal based on Nobles input and consider the differing viewpoints as more about semantics than substance.

Meanwhile, Rep. Steve Gottwalt asked why the department was in such a rush. The St. Cloud Republican chairs the House Health and Human Services Reform Committee. He notes the audit would cover the years Republican Tim Pawlenty was governor.

"Why now?" Gottwalt asked. "Pawlenty's being mentioned as a vice presidential candidate. Is this trying to cast dispersions on him as a governor? If you have a few million extra money dollars laying around, you ought to be spending it on delivering care, and we can talk about whether we should spend it on auditing in a month or so."

The issue of health plans and reimbursement has become so radioactive that citizens and some in medical community raised questions about the influence between siblings. Jesson's department quickly shot down suggestions of a conflict.

Jay Brunner is an attorney who works in human services' procurement office. He was listed on the bid proposal and informed Nobles about the request for the audit. He's also Julie Brunner's brother. She's the Minnesota Council of Health Plans, the industry group that represents the state's biggest insurers.

Department officials said Jay Brunner will have no part in selecting the outside auditor. Julie Brunner said she and her brother have long worked in public service and respect the boundaries between their jobs. She said she didn't even know her brother was involved before reporters called her.