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Federal investigation could impact Hubbard County's indigent health plans

A pending federal investigation into the way Minnesota administers Medicaid programs, and the rates insurers charge for programs for the indigent, got a swift reaction from Hubbard County commissioners Wednesday.

The scope of the federal investigation isn't clear but it is believed to be conducted by the U.S. Centers for Medicaid/Medicare Services. That's what little information Hubbard County Social Services Director Daryl Bessler told the board.

According to the Forum's Capitol Bureau, Lucinda Jesson, Commissioner of the Department of Human Services, told a legislative committee Tuesday she learned of the probe last summer when federal officials contacted her. But she declined further comment.

"I don't know the scope of their investigation or what they're looking at or, frankly, how serious it is," Jesson told legislators. "We are fully cooperating."

The probe came to light at a hearing held to shed light on the openness and rate-setting for the state's health care plans for poor Minnesotans.

According to the Capitol Bureau, attorney David Feinwachs, a critic of the state's nonprofit health care plans and a former official with the Minnesota Hospital Association, told the panel the plans earn more from administering state plans for Medicaid than they do on commercial plans.

"They'd like to run those businesses when they can't run their own," complained Hubbard County commissioner Lyle Robinson. "Unfortunately it's set up for fraud."

Bessler said the state was supposed to have been "out of the rate setting business by 2012, but it will be 2013" by the time this goal is realized.

"The feds want the same rates for the same services," he said.

Rural healthcare providers have long complained their federal reimbursements were considerably lower than commensurate services provided n metro areas, leaving clinics, hospitals and doctors underpaid.

Projections call for Minnesota to spend $3.3 billion on Medicaid this year, and $3.6 billion in 2013.

The program provides coverage for around 733,000 Minnesotans, and the majority of recipients have their care managed by private health maintenance organizations.

Gov. Mark Dayton told Minnesota Public Radio he welcomed the investigation and his administration has nothing to defend.

"But if we can save dollars, if there are dollars being misspent, we want to know about that so we can correct it going forward," he said.

"The feds are looking at ways to cut costs," Bessler said. "Health plans are making money."

But Bessler nevertheless worries about a ripple effect of any audit on outstate Minnesota's poor and the health plans that cover them.

This report was supplemented with materials from the Forum Capitol Bureau.

Sarah Smith

Sarah Smith is the outdoors editor. She covers courts, business and breaking news in addition to outdoors events.

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