ST. PAUL — The Minnesota Department of Human Services again came under fire this week as two more top-level officials stepped down and a notice came to light that the agency would be on the hook for $48 million.
The leadership shake-up and communication from federal health officials about the Medicaid dollars administered to ineligible treatment centers is the latest in a series of problems at the embroiled agency. Earlier this summer, two top deputies submitted their resignations before then-Commissioner Tony Lourey stepped down and his chief of staff followed him out the door. The deputies, at the time, agreed to stay on.
News of payments to ineligible facilities increases the state's potential total due back to the federal government to nearly $73 million. The reports sparked calls for an independent probe of the troubled agency days before DHS is set to bring in a new leader.
Gov. Tim Walz and DHS officials said the department continues to work through problems and welcomed outside review or potentially breaking down into smaller parts the agency that takes in $18 billion every biennium and serves 1 million Minnesotans. Republican lawmakers, meanwhile, said they were tired of seeing money misspent at DHS and asked for specific answers about how new leaders would fix longstanding problems.
"We want to know what happened and we want to know how things are going to change moving forward," state Sen. Michelle Benson, R-Ham Lake, said. Benson chairs the Senate Health and Human Services Committee, which is set to review the new issues and ask DHS officials and others about previous ones.
More resignations and $48M in question
On Monday, deputy commissioner Claire Wilson announced she would resign from the department. This news came weeks after she'd submitted then rescinded her resignation citing disagreement with the direction of the department.
Days after Wilson and another long-time deputy commissioner said they'd step down, then-Commissioner Tony Lourey said he'd resign with little explanation as to why. His chief of staff followed Lourey out the door.
Then Walz appointed Pam Wheelock, a former Finance Commissioner under the Ventura administration with a background in public, private and philanthropic offices, to right the ship at DHS. Wheelock told lawmakers in July that she knew the task would be tough, but she didn't realize just how difficult it would be heading DHS.
In her six weeks in office, additional issues came to light. The state overbilled Medicaid when it helped two tribes administer drug-assisted therapy treatments to the tune of $25 million, the St. Paul Pioneer Press first reported in early August. And the Centers for Medicare and Medicaid Services said it will be on the state to repay that money to the feds.
Then, Wilson again announced that she'd step down earlier this week. And within hours, news that the state would be on the line for $48 million came to light. Officials at CMS said the state made payments to dozens of ineligible chemical dependency treatment providers and ordered repayment.
The order sparked renewed calls from Republican lawmakers for a probe of the department's finances. Reps. Nick Zerwas, R-Elk River, and Deb Kiel, R-Crookston, in a letter to Walz asked that he work with lawmakers and experts to determine what's going on at DHS.
"The dysfunction at the Department of Human Services has reached a fever-pitch with news coming almost daily about resignations, improper payments, or cultural problems within the agency," the pair wrote. "It does not need to continue like this."
Walz said that the Medicaid dollars were spent to help treat Minnesotans with addiction, which was the intent. But he acknowledged the funds went to treatment centers they shouldn't have and he said his administration was working to prevent similar mistakes moving forward.
"That's on us to try to get right and to try and have those internal controls," Walz said.
The governor said he'd support a push for an independent review of the department if lawmakers put forth the dollars to fund it.
"I think it's important to know where we're at," Walz told Forum News Service. "If the Legislature wants to, I would encourage them to do so, to fund an audit."
Following the report of improper payments, bringing the state's potential tab with the feds up to $73 million, news broke that Marie Zimmerman, DHS assistant commissioner for health care and director of the state Medicaid program, would step down on Sept. 10.
And on Friday, Wheelock wrapped up her time as acting commissioner. As she prepared to leave office, she told the Pioneer Press the department should be split and that legislators should authorize an independent audit into DHS.
New leadership, and a chance to answer questions
The department is set to get another fresh start on Tuesday as Jodi Harpstead, former president and CEO of Lutheran Social Services, is set to take over as DHS Commissioner. Wheelock said she'll help Harpstead through the transition.
On her second day on the job, Harpstead could come before a joint Senate health and human services committee set to dig into problems at the department. Benson, the committee's chair, on Friday said she still hadn't heard from various DHS officials and former employees about outstanding information requests.
Benson said she was hopeful the panel would get answers next week about what lies ahead for DHS.
"It is my sincere hope Commissioner Designate Harpstead is going to take this seriously and wants to focus on delivering services to Minnesotans in the most efficient way possible," Benson said. "And that's going to require some change."