Human Services committee hears proposals to repay counties and tribes for DHS overpayments

The Human Services Reform Finance and Policy committee heard two proposals this week that would reimburse counties and tribes for billing errors made by the Department of Human Services (DHS).

DHS made overpayments to two tribal governments over several years for their substance use disorder treatment programs, totaling about $29 million. Second, errors DHS made in paying for certain mental health facilities resulted in an increase in the counties’ shares of these costs, totaling about $9 million. While the tribes and counties assert that they were acting based on incorrect guidance from DHS, current state law requires DHS to recoup the money regardless of who is at fault.

Changes at the Department over the past two years have strengthened process controls and program integrity standards. While these overpayments amount to a small percentage of the Department’s overall reimbursements, any payment or billing error using taxpayer dollars is of significant concern. Without legislative action, the Department has few options other than developing long-term repayment plans and moving forward with administrative hearings.

There is bipartisan agreement for holding both the counties and the tribes harmless for these errors. The House included provisions to address this in one of their supplemental budgets during special session last year, but it was not included in the final bonding and supplemental spending bill passed by the Legislature. One DFL proposal heard this week would reimburse the counties and tribes for payments owed to DHS and the federal government. Another bill was offered by Senate Republicans that would repay the counties and tribes using an allocation from the Department’s budget. Commissioner Harpstead of DHS said that taking this money out of the Department’s administrative budget would seriously impact their ability to make sure that payment issues like this do not continue to happen. Both bills were laid over for possible inclusion in the Human Services Reform omnibus budget bill. (S.F. 71) (S.F. 891)