Amplatz Medicaid Cuts Exemption Raises Questions

Updated: 12/03/2013 6:27 PM By: Jay Kolls

The Minnesota Department of Human Services (DHS) just finished an internal investigation into the actions of Assistant Commissioner Scott Leitz. 

Several State employees blew the whistle on an agreement Leitz seemingly made mostly on his own, according to a DHS internal investigation.

Fairview's Amplatz Children's Hospital was facing Medicaid cuts as part of a plan to save money in the program. But, according to the investigation, DHS employees grew concerned when Assistant Commissioner Leitz met with Fairview officials and agreed to exempt Amplatz from the Medicaid cuts because it is a children's hospital. Investigative notes from the complaint indicate that over four years Amplatz could receive as much as $17.9 million from the State and Feds for a combined $35.8 million.

The DHS investigation says "it does not appear that DHS' decision to give Amplatz retroactive exemption from the 10 percent (Medicaid) rate reduction was consistent with the law." The whistle blowers contend in the complaint that Amplatz doesn't qualify for the exemption from the Medicaid rate cut because it is not a licensed, stand-alone children's hospital and it does not meet minimum requirements for treating a certain percentage of patients from low-income families.

Duluth's St. Mary's Children's Hospital and Mayo's Children's Hospital are similar to Amplatz and do not receive the Medicaid exemption, according the complaint.

Minnesota Legislative Auditor James Nobles tells 5 EYEWITNESS NEWS the investigation is troublesome and that backroom deals by State officials using taxpayers' money is a serious concern.

Fairview, in a statement, says it was approved as a children's hospital by the State and the State said it meets the requirements for the exemption. DHS issued a statement saying they are asking for a legal opinion on the matter and point out the investigation did not find any fraud.