State Chooses Optum as Medicaid Auditor Amid Fraud Inquiry
Questions arise regarding Minnesota’s decision to hire Optum as its third-party auditor for Medicaid claims. The state has entered a $2.3 million contract for “prepayment reviews” this year, driven by an investigation into potential fraud within 14 Medicaid programs in Minnesota.
On Thursday, the Minnesota Department of Human Services explained that they considered four vendors approved by the Centers for Medicare and Medicaid Services. They received bids from three before selecting Optum, a subsidiary of the UnitedHealth Group, which is the largest private health insurance company in the U.S.
Joan Skrzacek, whose son relies on Medicaid services due to a disability, voiced her concerns about the chosen auditor. “I think there should be more transparency regarding who is doing the auditing,” she said.
Some service providers are also uneasy about the choice. John Estrem, CEO of Hammer & Ner, which runs group homes and apartment programs for people with disabilities, commented, “If we’re really aiming for an objective third-party audit, we must choose someone completely free of any conflicts of interest.”
In response to these concerns, Optum released a statement emphasizing that they and UnitedHealthcare operate as separate entities under the UnitedHealth Group umbrella, adhering to strict governance policies to ensure independence.
Additionally, a recent change in state law has exempted for-profit health insurance companies like UnitedHealthcare from providing Medicaid services in Minnesota, which adds another layer of complexity to the situation.
When asked why Optum was selected so rapidly, the Department of Human Services replied that, given the scale of fraud being uncovered, swift action was necessary to establish better processes in line with the Governor’s executive order. They noted that the contract is for one year, with plans to pursue a more extensive procurement process for longer-term arrangements eventually.
The prepayment review process by Optum is set to commence next month.
