Did Dayton administration defraud the federal government on Medicaid repayment?

posted at 11:35 am on March 9, 2012 by Ed Morrissey

When the state of Minnesota went through its budget crisis last year, Governor Mark Dayton got a gift from the company contracted by the state to handle its Medicaid program, UCare, in the form of a $30 million “donation.”  US Senator Charles Grassley wants an answer now, though, on whether that was a gift or a refund for overcharges — and whether Dayton’s Human Services Commissioner manipulated the transaction to avoid sharing it with the federal government:

When a health plan in Minneapolis made a $30 million payment last year to help the state through its budget crisis, should the federal government have received a piece of the action?

That’s the question at the heart of a letter sent Thursday to the Dayton administration by U.S. Sen. Charles Grassley, R-Iowa.

The payment came from a nonprofit health plan called UCare, which the state hired to manage care for patients covered by the Medicaid health insurance program.

Grassley’s letter quotes from an internal email in which Lucinda Jesson, the state’s human services commissioner, told other state officials that the UCare payment should be characterized as a donation “in order to have a good chance of keeping all this money.”

“If a refund, feds clearly get half,” Jesson wrote in the email.

Just in case anyone questions whether Jesson understood the implications of her communication, the e-mail ended with this:

Grassley noted that Jesson’s email closed with the line: “I thought we were going to handle this through phone calls.”

Be sure to read the entire report from Christopher Snowbeck at the Pioneer Press, because this is a rather complicated subject.  I’ll try to give a thumbnail version of why this looks a lot more like a refund than a “donation.”  Medicaid typically overpaid health insurers in order to compensate for losses through another program called General Assistance Medical Care.  When GAMC ended, Medicaid rates didn’t get dropped for the insurers involved, which resulted in overpayments — and that’s according to UCare’s CEO and president, Nancy Feldman.  The so-called donation “represents what we consider to be excess 2010 operating margin for state public programs,” Feldman wrote in a letter explaining the payment to Minnesota.

The crux is that Medicaid costs get split between states and the federal government.  If a refund occurs, then, the amount has to be shared with the federal government.  It appears that Dayton’s administration attempted to do an end run around this requirement by claiming that the returned “excess 2010 operating margin” was a gift instead of a voluntary refund of overpayments resulting from discrepancies arising from the ending of GAMC. This doesn’t mean that UCare did anything wrong; in fact, it looks like UCare was, if anything, more sensitive than required to the discrepancies and wanted to be proactively honest.  That impulse was apparently not shared by the Dayton administration.

Grassley has asked Attorney General Eric Holder to investigate this transaction, and in particular Jesson’s e-mail.  One would guess that her transactions these days are all conducted by phone.


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Fine with me if it’s a donation. Cool.

Now, does UCare also owe us a refund?

MTF on March 9, 2012 at 11:39 AM

Grassley has asked Attorney General Eric Holder to investigate this transaction, and in particular Jesson’s e-mail.

O_o

Yeah I’m sure Holder…Eric freakin’ Holder…will get right on that.

BTW, you had to post this while I’m insulting Wisconsin in another thread? Thanks, thanks for nothing.

Bishop on March 9, 2012 at 11:39 AM

Democrat pols? Fraud and corruption?

Say it ain’t so, Joe!

novaculus on March 9, 2012 at 11:40 AM

Can’t stand Dayton and assume he used it to prop up some public sector union, but every state should withhold money from the feds … the more the better. Starve the beast.

Lost in Jersey on March 9, 2012 at 11:40 AM

White wash inc….

dogsoldier on March 9, 2012 at 11:41 AM

(inc btw is short for incoming. )

You just know that nothing will come of this…

dogsoldier on March 9, 2012 at 11:41 AM

Grassley has asked Attorney General Eric Holder to investigate this transaction, and in particular Jesson’s e-mail

There’s a winner. He’ll get right on it.

a capella on March 9, 2012 at 11:44 AM

Fine with me if it’s a donation. Cool.

Now, does UCare also owe us a refund?

MTF on March 9, 2012 at 11:39 AM

Nice!

Gregor on March 9, 2012 at 11:50 AM

Well you know those Democrats are always claiming that insurance companies just wont stop giving away money for no reason. So it must have been a gift.

AndrewsDad on March 9, 2012 at 11:51 AM

White wash inc….
dogsoldier on March 9, 2012 at 11:41 AM

RAAAAAACIST!!!
/s

Marcola on March 9, 2012 at 11:52 AM

s l u t ! ! !(THERE!…now they’ll do something about it!)

KOOLAID2 on March 9, 2012 at 11:58 AM

Medicaid typically overpaid health insurers in order to compensate for losses through another program called General Assistance Medical Care. When GAMC ended…

Read GAMC and thought GMAC. Easy to get those gubmint programs mixed up!

Grassley noted that Jesson’s email closed with the line: “I thought we were going to handle this through phone calls.”

Now there’s a red-hand-in-cookie-jar quote.

Marcola on March 9, 2012 at 11:59 AM

Grassley has asked Attorney General Eric Holder to investigate this transaction, and in particular Jesson’s e-mail.

Thanks for the laugh of the day, Ed.

rbj on March 9, 2012 at 12:04 PM

But…but…but…How does this help Sandra Fluke and the war on women?????

Tim Zank on March 9, 2012 at 12:11 PM

The key words are “non-profit” money left over after expenses are profits. They can called over charges but over charges must be refunded or UCARE might be charged with fraud. They did not want to charged so they did the right thing, but democrats can not help themselves, lying and cheating are their way of life.

dunce on March 9, 2012 at 12:31 PM

The idea that the AG will get anywhere near this is fanciful.

CorporatePiggy on March 9, 2012 at 12:39 PM

Time to be like our neighbor to the east and start a recall petition. But unlike the Sconies, we have actual malfeasance here by the Governors office.

shaner5000 on March 9, 2012 at 12:42 PM

You know how call centers record all their calls? I guess it’s time that the government did too.

Of course the Obama administration gets around this by conducting business in coffee shops but with graft and corruption endemic within the “ruling class” recorded phone calls looks like a good place to start.

Jay Mac on March 9, 2012 at 12:42 PM

“I thought we were going to handle this through phone calls.”

You know. Every single time I drive off the cliff and awaken from the coma, the last thing I remember seeing is a big yellow roadsign that said exactly that.

Tsar of Earth on March 9, 2012 at 12:50 PM

RAAAAAACIST!!!
/s

Marcola on March 9, 2012 at 11:52 AM

Somehow I knew that was coming too… heh

dogsoldier on March 9, 2012 at 1:06 PM

Grassley has asked Attorney General Eric Holder to investigate this transaction

“Aha ha ha haaa haaa, ha ha ha hahaha aha, ooohooo, a haha ha, hmphhmphmm ha mmm, boy, that was good, aha ha…”

Akzed on March 9, 2012 at 1:28 PM

The Federal Government giveth to the states, but taketh not away.

Steve Z on March 9, 2012 at 1:38 PM

My question would be if they were willing to give back 30 million on their own how much did they really get in overcharges??????

Pomai on March 9, 2012 at 2:16 PM

Is there a Democrat that ISN’T getting filthy rich off of taxpayers? Hello? Bueller? Bueller?

search4truth on March 9, 2012 at 2:21 PM

Every time I see a picture of Mark Dayton, I think he just looks like he’s out of his depth.

Vanilla Salt on March 9, 2012 at 2:26 PM

“Put nothing in writing.”
- Carol Browner (Obama White House climate czar) –

Apparently Minnesota Democrats are less savvy than the Obama Administration. Just as crooked though.

DamnCat on March 9, 2012 at 2:42 PM

Grassley has asked Attorney General Eric Holder to investigate this transaction, and in particular Jesson’s e-mail.

Hahahahaha…..gasp!…….wheeze!…….snort!

Yeah, that’ll happen right after Holder gets done “investigating” Fast and Furious.

GarandFan on March 9, 2012 at 2:55 PM

Name that party?

cptacek on March 9, 2012 at 3:05 PM

Since when is a simple “Misunderstanding” in administrative government processes a crime?

ActinUpinTexas on March 9, 2012 at 3:08 PM

Grassley has asked Attorney General Eric Holder to investigate this transaction

Good luck with that one, Chuck.

iurockhead on March 9, 2012 at 3:23 PM