Minnesota health officials, lawmakers debate financial impact of fraud prevention efforts

A state health and human services budget that passed the Minnesota House of Representatives last week highlights vast disparities regarding how much money the state can recover by cracking down on fraud, waste and abuse--an issue that has polarized state Republicans and Democrats, according to TwinCities.com.

House Republicans argue that focusing on fraud and abuse in Medicaid and other state-run healthcare programs will yield as much as $300 million in the next two years. Alternatively, state Democrats back an analysis by the Department of Human Services (DHS) that argues that anti-fraud efforts will save the state just $16.5 million during the same time frame.

In the past, Minnesota has struggled in areas such as home health fraud by failing to prosecute fraudsters or recovering stolen money. As a result, the Minnesota DHS has frequently been criticized for its inability to combat fraud, waste, and abuse. However, on Monday, DHS announced that it had more than doubled its fraud recoveries in the previous year, according to The Star-Tribune. In 2014, the state collected $3.9 million from fraud and overpayments, up from $1.8 million in 2013. The DHS Office of Inspector General has put more resources toward fraud prevention by doubling the department's staff, targeting Medicaid providers with unannounced screenings, and improving background check requirements for home health employees. 

Fraud savings predictions are rarely foolproof, but the $283.5 million discrepancy is astonishingly large. The primary difference lies in whether a crackdown on healthcare fraud within the state will have an immediate impact or require a few years to gain momentum. The DHS analysis, which indicates a slow startup speed, means that 2016 and 2017 will likely see smaller returns--but once the programs get underway, the state could save as much as $150 million in 2017 and 2018. Illinois predicted that anti-fraud efforts would save the state $350 million in 2013, but the true figure was just $2.6 million, noted TwinCities.com 

However, Republicans pointed to states such as Pennsylvania, which eventually removed hundreds of thousands of beneficiaries from Medicaid. A Foundation for Government Accountability (FGA) report showed that Pennsylvania saved $300 million in just 10 months by removing 160,000 ineligible beneficiaries from Medicaid. Meanwhile, a Minnesota DHS audit found that, within a sample size of 193 people, 17 percent of public health beneficiaries were not eligible for the program in which they were enrolled. However, DHS officials told TwinCities.com that some of those people identified as ineligible may have simply been enrolled in the wrong program, which would yield lower returns.

The concern for some is that the budget recently passed in the House relies on the $300 million savings prediction to balance the budget. Health experts have often tried to estimate the true cost of healthcare fraud, with little success.

"If we count on all these savings and they're not real, we head right back to deficit budgeting," Rep. Erin Murphy (D-St. Paul) told TwinCities.com.

For more:
- here's the TwinCities.com article
- read The Star-Tribune article
- see the FGA report
- here's the DHS audit

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