Minnesota DHS Initiates Enhanced Prepayment Review of Medicaid Services

The Minnesota Department of Human Services (DHS) has started a more rigorous prepayment evaluation of the Medicaid services program, as announced by state officials on Monday.

In this first phase, over 80,000 claims were submitted to Optum, which is part of UnitedHealth Group, according to John Connolly, DHS’s deputy secretary and Medicaid director.

Optum was contracted to analyze provider claims before any payments are made.

When asked why these specific claims were selected for review, Connolly mentioned that all claims from 14 providers classified as “high-risk” under the Medicaid service program were forwarded for examination.

“We’re now seeing that all submissions from those 14 services which filed claims in this review cycle are suspended,” Connolly explained.

However, he added, “That doesn’t necessarily indicate there’s an issue with these claims or that there’s anything fundamentally concerning. We’re simply conducting these enhanced prepayment reviews for all claims associated with these 14 high-risk services.”

Connolly further clarified that “warrant cycle” refers to DHS’s bimonthly schedule for reviewing claims. Every few weeks, another batch of around 80,000 claims is evaluated by Optum, with the findings sent back to DHS for additional review. Claims flagged during this second evaluation will be passed on to the Office of the Inspector General for further investigation.

When asked if the review process has been completed and finalized, Connolly responded, “That’s a good question, and the answer is, no, not yet.”

DHS anticipates receiving some preliminary feedback from Optum later this week about the initial evaluations.

So far, there have been reports of fraud in a limited number of the 14 Medicaid service programs undergoing this heightened scrutiny. This may postpone payments to all providers of those services by up to 30 days or possibly longer if additional follow-up is deemed necessary to ascertain if the claims are “clean.”

These delays are causing concern among healthcare providers who serve vulnerable populations in Minnesota, especially those operating on tight budgets.

“We definitely recognize that many small, community-based providers offering excellent services are worried about this,” Connolly remarked. “We will continue to work with Optum to refine the prepayment review process promptly.”

In line with federal guidelines, all legitimate claims are required to be settled within 90 days.