A new report from the Office of the Legislative Auditor reveals that Minnesota healthcare providers owe the Department of Human Services (DHS) over $40 million in overpayments. The audit, released Tuesday, December 10, 2024, found that DHS has made only sporadic attempts to collect this debt over the past 10 years. Auditors conservatively estimated the overpayment amount, noting that many of the affected providers are nursing homes. Furthermore, the audit revealed that DHS staff were unaware of their responsibility for debt collection.
DHS Commissioner Jodi Harpstead responded to the audit, stating that much of the debt is owed by organizations no longer in business. She also pointed to the agency’s contractor, which has only recovered approximately $200,000 since 2018, yielding a low return for taxpayers. The DHS administers federal and state healthcare programs, including Medical Assistance (Minnesota’s Medicaid program). Overpayments often result from adjustments made to claims after they are filed, for example, due to billing errors or retroactive rate changes. However, the audit found that DHS failed to notify providers of these outstanding debts.
The audit highlighted the lack of recent collection efforts: the last individual collection notice was sent in 2019, and the last documented bulk mailing of collection letters was in February 2015. Commissioner Harpstead disputed some of the audit’s findings, claiming that the department routinely recovers overpayments through its standard claims processing. She also noted that the department began recovering the debt identified in the audit only after the auditors initiated their investigation. This was confirmed by Legislative Auditor Judy Randall in a letter attached to the report.
By Madison McVan, Minnesota Reformer, December 10, 2024
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