Report: DHS improper payments could be up to $28 million

The Department of Human Services (DHS), which runs Minnesota's Medicaid program, made up to $28.9 million in improper payments to managed care organizations between state fiscal years 2017 and 2019, a new report sent to the Capitol estimates.

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The Department of Human Services (DHS), which runs Minnesota’s Medicaid program, made up to $28.9 million in improper payments to managed care organizations between state fiscal years 2017 and 2019, a new report sent to the Capitol estimates.

DHS uses electronic records and identification to track eligibility and care payments.

More than 47,000 Minnesotans have duplicative personal accounts that could have been created by typos, incomplete existing records, significantly changing information, or an employee creating a new account when an original account already exists.

When an individual is assigned to multiple identification numbers, each has its own eligibility record and enrollment fees. The state could pay fees for each number if they are active simultaneously.

The Minnesota Department of IT estimates improper spending between $12 million and $28 million over three years.

Sen. Michelle Benson, R-Ham Lake, chairwoman of the Health and Human Services Finance and Policy Committee, said that lawmakers heard about the problem two years ago.

“We required the reporting to make clear to DHS that fraud must be taken seriously, and the risk of fraud when you have this kind of lackadaisical approach to tracking is high,” Benson said. “It’s also a lot of money at a time when we’re looking for money for school safety, disaster relief and paying back tribes and the federal government for [Medicaid] overpayments in other areas.”

DHS deputy assistant commissioner Julie Marquardt said that all organizations handling health claims face multiple ID problems.

The multiple ID problems were augmented by the Minnesota Eligibility Technology System (METS), enacted in 2013 because applicants entered data directly into the system instead of being aided by workers. METS can’t identify and fix duplicate numbers.

“While about 3% of enrollees have had multiple IDs, only a small number of those – less than a quarter of 1% – have IDs that overlap in a service period, which can cause service problems or duplicate payments,” Marquardt said in a statement. “Proportionately, these cases have a very small fiscal impact – at most, less than one tenth of 1% of Medicaid payments over the three years studied in the report.

“But every dollar matters, so DHS and Minnesota IT Services continue working to correct the multiple IDs issue as quickly as possible, while also creating long-term solutions.”

Marquardt said DHS will repay the federal government as it recovers duplicated payments from health plans and providers.

The number of enrollees with multiple personal identification numbers within the same year has fluctuated in the last three years.

  • 2019: 47,390
  • 2018: 41,575
  • 2017: 42,401

The report said those multiple IDs could cause service disruption, billing issues, and increased labor costs.

Solutions to the duplicate ID issue are required by June 30, 2021, with several already in progress, the report says.

Last year, Gov. Tim Walz hired a consulting agency to consider breaking up the $18 billion agency that’s notched 26 marks on The American Experiment’s Scandal Tracker since 2017.


Scott McClallen

Scott McClallen is a staff writer covering Michigan and Minnesota for The Center Square. A graduate of Hillsdale College, his work has appeared on and Previously, he worked as a financial analyst at Pepsi.