Bachmann calls for Minnesota Medicaid audit [Pioneer Press, St. Paul, Minn.]

June 08--U.S. Rep. Michele Bachmann, R-Minn., is calling for a federal agency to audit Minnesota'sMedicaid program.

In comments before a U.S. House of Representatives subcommittee on Thursday, June 7, Bachmann said she was sending a letter to the Centers for Medicare and Medicaid Services (CMS) calling for "an immediate, independent third-party audit of Minnesota's books."

"This situation needs immediate attention," Bachmann told the Oversight and Government Reform subcommittee, which was taking testimony on fraud in the federal Medicare and Medicaid health insurance programs.

Medicaid is the state-federal health insurance program for low-income people and those with disabilities. Bachmann is among those who have picked up on questions about whether Minnesota officials have manipulated the Medicaid rate-setting process to wrongly pull down extra federal funding.

The questions have swirled since February when the state's Human Services Commissioner confirmed that the federal government was investigating the issue. In addition to the Justice Department's investigation, Rep. Darrell Issa, R-Calif., and Sen. Charles Grassley, R-Iowa, have launched inquiries.

In May, CMS sent its own letter to the state Department of Human Services asking questions.

David Feinwachs, a St. Paul attorney and former lobbyist for the Minnesota Hospital Association, raised the issue in February when he served as the key witness during a committee hearing at the state House of

Representatives.

At the outset of his presentation, Feinwachs displayed a page from a lawsuit he filed in 2011 that quoted a state official as saying: "If you can't keep a secret you have to leave the room, but we have been adjusting the reserve amount for state-only funded programs by making it essentially zero, and increasing the amount for PMAP federal programs, blending the rate and returning it to the insurers."

PMAP is the abbreviation for portion of the state's Medicaid program administered by managed care organizations, including private HMOs.

In a letter to state Human Services Commissioner Lucinda Jesson this spring, Issa asked about the issue. Jesson responded that the state was not a party to Feinwachs' lawsuit and did not have first-hand information about the complete litigation record.

But Jesson cited a 2008 report from the Office of the Legislative Auditor that described the past relationship between Medicaid and other state-funded health care programs such as General Assistance Medical Care (GAMC).

"(Human Services) staff acknowledged that they have regularly set GAMC's rates at levels lower than the program's anticipated costs, with the expectation that the health plans will negotiate lower rates with providers, help clients transition from GAMC to MinnesotaCare, or cover their losses with surpluses from other programs," the auditor's report stated.

Jesson also noted that the administration of Democratic Gov. Mark Dayton has moved to a new competitive bidding process for awarding contracts with HMOs in the Medicaid program.

Christopher Snowbeck can be reached at 651-228-5479. Follow him at twitter.com/chrissnowbeck.

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