Health care transparency focus

Amid allegations of fraud within the Department of Human Services in 2010 and the resulting demand for more transparency in public health care costs and payments, the House Health and Human Services Finance and Reform committees held a joint hearing Feb. 14. No action was taken.

Public healthcare is nearly a $7 billion biennial cost to state taxpayers.

Dave Feinwach, former general counsel for the Minnesota Hospital Association who was fired after raising DHS impropriety allegations, showed a series of emails, depositions and other handouts to support his theory that a DHS employee improperly leveraged federal funds to pay for state health care costs. He also alleges that a $30 million “donation” from UCare, a non-profit health care provider for contracted state programs, was used to help balance the state budget. The donation was essentially a refund for overpayment of Medical Assistance payments and should have been split with the federal government, he said.

DHS Commissioner Lucinda Jesson defended UCare’s “donation.”

“To be a repayment, you’d have to ask for it.”

She said she could not find anything in the contracts to warrant HMOs legal obligation to refund DHS for excess revenues.

A federal investigation of DHS resulted. Jesson has implemented several changes to previous practices in question. Legislators are also planning to introduce bills that would address issues raised by Feinwacht.

“There is legislation already jacketed. I think we will see substance coming away from this session,” promised Rep. Steve Gottwalt (R-St. Cloud), chairman of the reform committee.

Some of the issues that legislators want to address include:

• setting limits on HMO’s risk management reserves;

• providing better analytic tools to drive down administrative costs; and

• determining why overpayment occurs.

“Let’s think not just where we are, where we’ve been, but where we want to go,” Jesson said. She didn’t believe there was fraud but did think there was room to better negotiate contracted rates and to leverage more federal healthcare dollars. She added a department of inspector general, negotiated caps on 2011 HMO contracts and made them enter into a competitive bid process s public healthcare providers.

“We’ve made a fundamental shift in the way we do business with health plans, but we’re not done,” Jesson said.

Geoff Bartsh, vice president of public policy and government relations at Medica, said HMOs are required to provide data at both the state and federal levels and are routinely audited, but there is room for more efficiency among the reporting agencies.