Here's what we know about DHS' $29M mistaken payments to 2 tribes
ST. PAUL — The Minnesota Office of the Legislative Auditor this week released a damning report outlining how a "dysfunction in supervision, oversight and control" allowed the state Department of Human Services to overpay $29 million to two tribes.
The special review came after the department earlier this year noted that it had stopped the overpayments and asked the Leech Lake Band of Ojibwe and White Earth Nation to repay the $29 million, which had been overpaid for medicine-assisted opioid treatments between 2014 and 2019.
A top DHS official in response to the report committed to unearthing answers about the overpayments and tightening standards around approving reimbursement payments. And lawmakers demanded answers as well as a commitment from Commissioner Jodi Harpstead to fix longstanding problems at the department.
"This was something that we think should've been caught by the people who are in DHS every day," Legislative Auditor Jim Nobles said on Wednesday. "And there are a lot of people who had an opportunity to stop the payment and say, 'You can't do this.'"
Despite that, Nobles said, the excess payments for treatments aimed at helping people break addictions to opioids continued.
Harpstead, who hit her 60-day mark at the department's helm this week, pointed to a culture at DHS that allowed for the overpayments to go unquestioned and a leadership structure that allowed employees in different departments to work in silos. She apologized to tribal leaders for the errors and asked that lawmakers not let them foot the bill for the state's mistakes.
After a week of news and of additional questions around the payments, here's a look at what we know and what we still don't know about the mistaken payments.
DHS administers the state's Medicaid program and between 2014 and May of this year, the department approved a higher rate of payment for opioid treatments than was authorized. A department staff member at some point said the tribes could code opioid treatment medication administered at home the same way the Indian Health Service bills for an in-hospital encounter rate. The difference in reimbursement rates is more than $400.
In February, the Red Lake Nation asked DHS if it could bill in the same way, triggering a concern at DHS about the payment rates. In May, the Walz administration told the White Earth Nation and Leech Lake Band that they could no longer bill for the in-person treatment rate when the medication is taken at home.
And weeks later, DHS leaders told the tribes they would have to repay the federal government for the $29 million.
Who approved the higher payments?
State auditors weren't able to determine that based on their review of documents and interviews with dozens of DHS employees. And it was unclear just how long the overbilling practice had been allowed to go on.
Where did the money go?
Tribal leaders said the additional funds went to providing opioid treatment to tribal members. And without those extra dollars, the tribes have been hardpressed to provide the same services to members struggling with addiction, they told lawmakers this week.
DHS officials also said the dollars likely went toward additional opioid treatments.
Will the feds ask for the money back?
A spokeswoman with the Centers for Medicare and Medicaid Services said agency officials are reviewing the report. If they determine the state overpaid the tribes, CMS will seek repayment for the feds' portion of the overpayment.
Who will be on the hook to pay it?
Minnesota law says the state will have to ask the tribes to pay back the money, even if DHS erred in allocating it. But Harpstead, Gov. Tim Walz and tribal leaders have said the tribes shouldn't be on the hook for flawed guidance from DHS.
"The Leech Lake's Band's position from the outset has been that we will not repay this money because we are not at fault," LeRoy Staples Fairbanks, a district representative from the Leech Lake Band, said Tuesday. "We know that simply demanding the tribes to repay this money will not reach a meaningful resolution nor address the ongoing crisis our communities face."
Harpstead asked lawmakers this week to amend state law so the state will not have to ask the tribes for a repayment.
Lawmakers won't return to St. Paul until February for the 2020 legislative session, so the department might not have a choice about pursuing repayment from the Leech Lake Band and White Earth Nation. But tribal leaders will be able to appeal the repayment decision to administrators and to the courts.
Republican legislators have said DHS should have to find $29 million to repay the costs, but department heads said they worried that money could pull resources from the more than 1 million children, elderly and disabled Minnesotans who rely on DHS.