Minnesota government overpaid two tribes $25 million

Yet another example of Democrat Party mismanagement


Two Native American tribes—Leech Lake Band of Ojibwe and the White Earth Nation—were overpaid by Minnesota’s Department of Human Services (DHS) to provide Suboxone, an opioid substitute to treat opioid addicts, to the tune of $25 million.

Specifically, the two tribes were billing the state’s Medicaid insurance program for in-person visits, which cost the state more, when the medication was really being self-administered at home. 

Medicaid is a state-run but mostly federally-funded program to provide healthcare to indigent persons who don’t qualify for Medicare. Historically, the program targeted poor families with Children, but Obamacare expanded Medicaid to childless able-bodied-adults who make less than a certain threshold above the federal poverty line.  

Now, Minnesota is on the hook to the federal government over the incorrect payments, and the State is attempting to get that money from the two tribes (who have likely long-since spent the money). 

According to the Star Tribune: “DHS has notified federal health care officials about the potential overpayments and by law must reimburse the federal government. In turn, the state will seek repayment from the tribes once its investigation is completed. The money for the program comes solely from federal funds.”

State investigators are looking into the problem as a result. “It’s not only a lot of money, but it’s a lot of money for a specific service to a specific and a very small set of vendors,” said legislative auditor James Nobles. Nobles is exploring the cause of the overpayments, who is responsible, and why DHS didn’t notify his office sooner.

The overpayments took place over a period of five years, and represent another problem that former governor Mark Dayton’s DHS has left the relatively new administration of Governor Tim Walz. 

DHS in turmoil

Already, former DHS Commissioner Tony Lourey resigned after just six months on the job for unknown reasons. That’s a big deal. DHS is by far the state’s biggest expenditure, spending one-third of the entire state budget, or $17.5 billion out of a total state budget of almost $50 billion.

And DHS is already engulfed in scandal, after widespread and unrectified fraud in the state’s childcare benefit program—a welfare program that pays for daycare—which has been almost completely ignored by Democratic state officials, including attorney general Keith Ellison and former attorney general Lori Swanson. The fraud in this program could be costing the state up to $100 million, and because it is concentrated among ethnically Somalian daycares with ties to terror-ridden Somalia, there is even a concern that this fraud could be aiding terrorism. 

As a result, Lourey isn’t the only DHS official to face scrutiny. Earlier this year, the DHS Inspector General Carolyn Ham was put on leave for her failure to stop the childcare fraud (though she’s pulled in over $40,000 since getting in trouble for not doing her job). And just before the Lourey resignation, two of Lourey’s top deputies at DHS resigned—interestingly, both served in the Dayton administration, and had overseen either the childcare program or the massive DHS budget.

Yet despite questions from Republican lawmakers, DHS and the Walz administration have yet to explain what prompted the resignation of former Commissioner Lourey and his top officials, a lack of transparency that has prompted bipartisan criticism.


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Willis Krumholz

Willis L. Krumholz is a fellow at Defense Priorities. He holds a JD and MBA degree from the University of St. Thomas, and works in the financial services industry. The views expressed are those of the author only. You can follow Willis on Twitter @WillKrumholz.