Minnesota Medicaid, Medicare fraught with overspending, corruption

Sally Nelson | Contributor

Minnesota Democratic Gov. Mark Dayton has created $4 billion per-year medical programs that have sparked four federal investigations into $1.4 billion worth of bonuses for state-backed “non-profit” executives.

After President Barack Obama instructed states to prepare for Obamacare by preparing hospitals with technology and getting ready for insurance exchanges, Dayton pre-emptively expanded Medicaid to include adults without children — three years ahead of Obamacare’s scheduled implementation.

If the Supreme Court strikes down Obamacare on Thursday, the federal government will not provide the anticipated matching funds for every Minnesota dollar spent on medical services and administration.

That means the state will need to pick up the slack for 95,000 new people Dayton brought into the already cash-strapped program, The Free Beacon reports.

“All these states had to do was expand their eligibility and they could get ‘free government money,’ but if the entire bill is thrown out, they won’t have these billions in subsidies that they were promised,” said Ben Domenech, a health-care expert at the conservative Heartland Institute.

Minnesota started racking up Medicaid and Medicare debt even before Obamacare inspired Dayton’s expansion. The expensive programs have not only attracted four federal investigations for misappropriated surplus funds, but also inspired calls for a federal audit.

The U.S. House of Representatives Committee on Oversight and Government Reform found that the state used an accounting trick in order to leverage federal reimbursement of state Medicaid spending as far back as 2010: “The state was intentionally lowering the rates paid to the managed care companies for plans outside the Medicaid program and increasing the rates within the Medicaid managed care program,” a House staff report reads.

The trick led to a total surplus of $1.4 billion for Minnesota’s four non-profit health maintenance organizations (HMOs). The HMOs diverted the extra funds into reserves and large bonuses to pad their own pockets.

Even though the Centers for Medicare & Medicaid Services (CMS) knew about the fraud over a year ago, no one corrected the misallocation of funds.

“It is likely that Minnesota owes the federal government hundreds of millions of dollars for inappropriately leveraging the federal Medicaid reimbursement for years,” the report reads.

In response, Minnesota Republican Rep. Michele Bachmann sent a letter to CMS calling for an immediate third-party audit of Minnesota’s books.

“We can’t allow taxpayer dollars to flow without proper record keeping ever again,” Bachmann said in a committee hearing.

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