If this can’t pass, what will?

As even casual State Capitol followers know by now, providers committing Medicaid fraud has meant low-income Minnesotans not getting assistance, untold taxpayer money squandered, and Tim Walz not running for reelection. 

One low-hanging fruit solution seemed like more money toward the Medicaid Fraud Control Unit, which is part of the state attorney general’s office. A bill to increase this unit’s budget — which would include generous federal matching dollars — has passed through several House and Senate committees via unanimous voice votes.

But on Thursday, Republicans in the House Human Services Finance and Policy Committee, winnowed down yet more what is possible to pass in this hyperpartisan legislative session. 

GOP lawmakers watered down this bill to such an extent that the state will lose out on almost $4 million in federal matching money. That money would pay for 18 full-time staff members toward a Fraud Control Unit, a division that now has 32 full-time employees.

The Republicans’ reasoning is that they dislike the job current attorney general, Keith Ellison, has done on prosecuting Medicaid crimes.

“In business, people have to be held accountable,” said Rep. Jeff Backer, R-Browns Valley, and member of the committee in an interview, adding that the new bill version heads off a “blank check” to Ellison. 

(A message left with Ellison had not been returned as of midafternoon Thursday.)

Bill author Matt Norris, DFL-Blaine, called the vote a “head scratcher.”

“In every conversation I’ve had with my colleagues across the aisle, we have had a common understanding that the work of this unit and fully funding it is critical,” Norris said.

What does the Medicaid Fraud Control Unit do?

As part of its participation in Medicaid, Minnesota must have a Medicaid Fraud Control Unit, which has the power to perform criminal prosecutions.

As the U.S. Attorney’s Office announced criminal charges against Medicaid providers late last year, Republicans noted that, by comparison, the state Medicaid Fraud Control Unit appeared less engaged in unveiling fraud.

But Ellison has said that the state fraud unit cooperated with federal prosecutors each step of the way. 

Also, the state has several criminal cases of its own. For example, in January the attorney general’s office charged the operator of a Minneapolis-based home care agency, Guardian Health Services, of bilking Medicaid out of over $3 million. 

Related: What are we doing here? The agonizingly repetitive theater of legislative committee hearings

In fact, Ellison has argued in front of numerous committees this legislative session that the Medicaid unit punches above its weight. He pointed out that states including Indiana and Washington with similar sized Medicaid budgets have 59 and 57 staff members, respectively, in their units. 

Republicans have gotten their digs in on Ellison during these committee hearings. 

“You’ve created a divide between Republicans and Democrats,” Rep. Bidal Duran, R-Bemidji, told Ellison at a House Judiciary Committee panel last month, who added that DFLers were the political party “who has allowed fraud to happen.”

Still, in prior committees, reservations toward Ellison did not alter GOP votes.

“The fraud goes deeper than I expected,” Rep. Peggy Scott, R-Andover, said at the Judiciary hearing. “I’ll support the bill.”

What made the bill such a slam dunk (or so it appeared) is that under federal Medicaid law, the feds would match three to one any spending put forward by the state. This meant that the state could bankroll 18 new positions — both new lawyers and investigators — and spend just $1.3 million annually. 

What changed Thursday?

The mood was jovial at the start of the House Human Services Finance hearing Thursday morning. 

Rep. Mohamud Noor, DFL-Minneapolis, kicked off the proceedings by serving sambusas in honor of his Republican co-chair Joe Schomacker of Luverne who is retiring at the end of this year. 

But the vibes changed when DFLers got to the part of Schomacker’s larger human services package that addressed Medicaid Fraud Control Unit funding. 

Under this new legislative language, the unit would get one-time funding instead of continual monies. The intention is to keep Ellison, who is running for re-election this year, in check. 

“They have to keep working for it,” Backer said. “In my opinion, you have a greater chance of ensuring accountability and eliminating inefficiencies with this version.”

But by making the funding one-time, Minnesota would no longer qualify for the federal match. 

The result would be that instead of having the resources to hire 18 new people, the Medicaid Fraud Control Unit would have the money to pay about 4.5 full-time employees — who could be let go in a year sans continued funding. 

“This doesn’t do a lot of good, because there’s not a lot of high-quality attorneys and investigators looking for a one-year gig,” Norris said after the hearing. 

Norris, who is a member of this committee, moved to amend the bill to keep his continuous funding language. His amendment failed on a party-line vote. 

Backer said that he would be okay with the state effectively turning down $3.9 million in federal money.

“Unfortunately, Minnesota has not shown itself to be very prudent with taxpayer dollars,” he said. 

Schomacker’s overall human services package actually did pass on a bipartisan vote, despite the fight over the Medicaid Fraud Control Unit. Both parties backed provisions such as requiring more reporting from some Medicaid providers. 

Norris’s original Medicaid Fraud Control Unit bill could still pass as a standalone measure, rather than part of larger legislation. But House Republicans who previously supported the bill may decide as a caucus to now oppose it.

“There’s still a long way to go in session,” Norris said. “We’re going to continue to try and get that funding.”

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