A legislative audit faulted the Minnesota Department of Human Services (DHS) for lax collection of more than $40 million owed to the state from nursing homes, hospitals and other medical providers.
How much Minnesota could recoup, if any, is unclear because some of the debts appear to date to 2006 and have murky or incomplete records to explain them. But the Office of the Legislative Auditor said in a report released Tuesday that DHS should be making more of an effort, starting by identifying which of its divisions is responsible.
“At the very least, notify these providers to let them know that outstanding debt exists and potentially recoup some of that money,” Lori Leysen, deputy legislative auditor, said in an interview.
DHS pays billions of dollars each year to medical providers and long-term care facilities to care for low-income and disabled Minnesotans covered by the state’s Medical Assistance insurance program. Sometimes the agency discovers errors, such as when a provider overbills or claims to have provided services that it didn’t. In the case of existing providers, the state typically deducts the amount it pays in the future to make up the difference. But the audit found particular problems when the debts are owed by providers that have either closed or been sold.
DHS Commissioner Jodi Harpstead said in a response letter to the audit she agrees with many of its findings, but it’s challenging “to recover from providers who are no longer billing Medicaid and are often no longer in business.” One of the agency’s contractors actually stopped trying to collect these types of debts after only recovering $125,000 from 2018 through 2022, she added.
“The majority of these balances represent organizations no longer doing business and we have had a very low return on any recovery work,” she wrote.
The explanation didn’t appease state Rep. Lisa Demuth, R-Cold Spring, the House GOP leader. The audit found inaccuracies in how DHS was reporting its accounts receivable balance.
“It’s shocking that the Department of Human Services still does not have processes in place to stop and prevent waste of taxpayer dollars,” Demuth wrote. “Even more concerning are the apparent accounting practices that are inaccurate at best, or deceptive at worst.”