State Audit Shows Taxpayers Overpaid 4 HMOs $162M

Updated: 03/04/2013 10:51 PM KSTP.com By: Jay Kolls

A preliminary state audit, paid for by the Minnesota Department of Human Services, shows four HMOs that run the state's Medicaid program were overpaid. 

The audit says Blue Cross and Blue Shield of Minnesota, Medica, HealthPartners and U-Care, collectively, were overpaid 162-million dollars over the past eight years. That overpayment was funded by Minnesota taxpayers. The audit also says the overpayment was invested and gave the four insurance companies an additional 150-million dollars. The audit concludes that's a $312-million dollar benefit the HMOs should not have received.

State Senator Sean Nienow, (R) Cambridge, sits on the Health and Human Services Committee. He tells 5 EYEWITNESS NEWS he thinks the HMOs should pay back the entire $312-million dollars. Senator Nienow says the preliminary audit focuses on just a fraction of the Medicaid costs and that the overpayments and investments paid to the four HMOs could top $500-million dollars when the final audit is finished at the end of the month.  Senator Nienow says he is not happy to see the audit points to poor management and oversight as part of the reason for the overpayment.

The four HMOs and the Minnesota Department of Human Services and the state's Medicaid program are currently being audited by the Office of Inspector General out of Washington, D.C. We are told the OIG arrived here the first week of January and they have auditors, inspectors and investigators still working here going over the Medicaid books at DHS and at the four HMOs. There are also two Congressional investigations into Minnesota's Medicaid program and the Minnesota Legislative Auditor tells 5 EYEWITNESS NEWS he will start his own audit of the Medicaid program this January.