Federal authorities are investigating how the rates are set for the matching Medicaid dollars from the federal government, which are used to help the state pay for health care coverage for the poorest of its citizens. The investigation follows allegations from David Feinwachs, a former lawyer for the Minnesota Hospital Association that a lack of transparency raised questions about how health care dollars were being spent.
Beyond the allegations mad by Mr. Feinwachs, federal investigators are also interested in a move made last year by the state’s managed care providers to donate excess profits back to the state. State officials viewed the funds as a donation, but now there are questions as to whether or not part of the money should’ve gone back to the federal government.
An attempt at a whistleblower lawsuit by Mr. Feinwachs was dismissed in court.
Minnesota spends just over $3 billion a year on Medicaid, a figure the Governor has been working to keep under control as budgets remain persistently low. However, critics have noted that not enough transparency surrounds the process, criticism that has only increased in light of the federal investigation. The lack of transparency seems to be part of the scope of the investigation according to the Minneapolis Star Tribune.
Last year, Governor Dayton instituted the state’s first ever competitive bidding process for health care contracts with the aim of controlling costs and some plans have lost business as a result, although these recent efforts may not have been enough.
State officials are not allowed to comment on which federal agency is leading the investigation or the scope of the inquiry.
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