Minnesota's human services agency loses another top executive

Another top official at the Minnesota Department of Human Services (DHS) has resigned, the second departure this week and the latest in an extraordinary string of changes in the agency's upper ranks.

Marie Zimmerman, the assistant commissioner for health care, said Friday she will leave her post in about 10 days.

Zimmerman, who first started with the agency in 2011, has been one of the top officials overseeing Minnesota's Medicaid program, a sprawling operation funded by federal and state dollars, with 1.1 million enrollees. She left briefly in late 2018, but came back to the agency this year after Tony Lourey, a former state senator, was appointed DHS Commissioner by Gov. Tim Walz.

Her resignation follows that of Deputy Commissioner Claire Wilson, who announced her departure Monday.

In addition to the personnel shifts, the agency has been struggling with revelations that it overpaid two Indian bands by $25 million for substance abuse treatment and that it owes the federal government $48 million for making improper payments to some treatment facilities.

Zimmerman's announcement deepened concerns among legislative critics who see the agency flailing as it seeks to improve oversight in the spending of federal Medicaid money.

"I think we have moved from a department in disarray to a department in distress," said Sen. Scott Jensen, R-Chaska and a member of the Senate health committee.

The announcements come as a new commissioner, Jodi Harpstead, prepares to take the reins of the agency next week. A Minnesota Senate panel will hold a second hearing next week about the agency, with Senate Republicans asking if the high-profile resignations have exposed a rift between reformers and those who oppose change.

Acting DHS Commissioner Pam Wheelock, whose last day was Friday, announced Zimmerman's departure Friday afternoon. "Since 2011, Marie has been a driving force behind some of the largest and most consequential reforms in Minnesota's Medicaid program," Wheelock said.

Zimmerman also addressed agency staff, saying in an e-mail that she will continue to work on Medicaid issues as a consultant to states and local agencies.

Before her brief departure last year, Zimmerman was the state's Medicaid director for four years; she stepped back into that role when she returned this year as one of DHS's five assistant commissioners.

"I have always thought she was a good Medicaid director for the state," said Lynn Blewett, a public health professor at the University of Minnesota who specializes in government insurance programs. "She had a national presence."

Although she was the top Medicaid official, decisions about Medicaid dollars are spread throughout the agency, fragmenting accountability in the use of federal money. The $73 million in improper payments to Indian bands and chemical dependency treatment facilities both involved Medicaid dollars that were managed by the behavioral health division, which is not part of the Medicaid administration.

"Now we are seeing solid evidence of financial mismanagement, and clearly someone is not paying attention," said Jensen.

Critics have said DHS needs to overhaul its management structure to provide for more accountability, especially with Medicaid dollars that come from the federal government, which provided $7 billion of the $12.6 billion in 2018 Medicaid spending. The federal money, for several Medicaid initiatives, comes with strings attached, and state officials have to comply with numerous federal regulations.

There have also been proposals to break up the agency, the state's largest. Wheelock suggested at a Senate hearing a few weeks ago that one part of DHS that runs state hospitals and the sex offender program is by itself larger than some other state agencies, making it a good candidate to split off.

Others have suggested that the agency's Inspector General office, which investigates fraud and mismanagement, should separate from DHS because under the current arrangement the agency is investigating itself.

In July, the two deputy commissioners, Wilson and Chuck Johnson, announced their resignations. Lourey stepped down a few days later, and Wilson and Johnson rescinded their resignations after Walz appointed Wheelock.

Jensen said the return of the two deputy commissioners was a troubling sign.

"I thought this is a really messy situation that is not likely to work out well," he said. Indeed, Wilson resigned again weeks later.

Glenn Howatt • 612-673-7192