Minnesota’s Department of Human Services (DHS) identified an additional $2.4 million in overpayments for Medicaid made to the White Earth Nation in 2019, during the time of the Walz-Flanagan administration. This revelation came after an audit showed that the state made significant extra payments to both the White Earth Nation and the Leech Lake Band that year, even after concluding these payment methods did not comply with state and federal laws.
These payments were part of a larger issue where over $29 million had been overpaid over a decade to White Earth and Leech Lake for Medication-Assisted Treatment programs aimed at addressing opioid addiction.
The audit indicated that these treatment programs combine counseling with medication to help reduce cravings and withdrawal symptoms. The DHS classified the payments as overpayments because the agencies paid the tribes based on the U.S. Indian Health Service’s “encounter rate” for instances where patients took their medication at home.
The initial calculation of overpayments covered roughly $25 million up to December 2018. Subsequently, it increased by $3.8 million in 2019, which included $2.4 million to White Earth and $1.4 million to Leech Lake. The Office of the Legislative Auditor commented that the increase primarily stemmed from payments made in 2019, despite earlier determinations that using the encounter rate for take-home medications violated legal standards.
The audit scrutinized the Medication-Assisted Treatment initiatives led by both tribes. White Earth launched its program in 2017, serving about 595 clients during the fiscal years 2018 and 2019. Leech Lake’s program, initiated in 2004, accommodated around 162 clients in the same timeframe.
The payments were funded by federal Medicaid resources managed by Minnesota’s DHS. Lt. Gov. Flanagan had previously praised the head of DHS, an agency currently under scrutiny for its involvement in a broader fraud scandal in Minnesota.
The overpayments persisted even after DHS recognized that these payments didn’t align with legal requirements, and an external review later highlighted the problem, according to the audit report. Initially, the state informed White Earth and Leech Lake that they must repay the funds, which prompted strong pushback from tribal leaders.
White Earth criticized the handling of the repayment discussions, describing it as a failure to engage meaningfully. Tribal officials expressed that they expected at least some dialogue, emphasizing the importance of respect in these dealings.
Flanagan didn’t publicly oppose this demand for repayment, although she did label the requirement as “unacceptable.”
Concerns have been raised about the potential impact of these repayments on access to medications for patients. A member of the White Earth band highlighted the risks, pointing out that a loss of over 300 patients’ access to medications could lead to increased overdose rates in the community, where Native Americans disproportionately suffer from such outcomes.
The tribes indicated that returning millions in overpayments could jeopardize their treatment programs. By 2020, White Earth was still distributing take-home doses to patients, covering costs with their own resources for what they described as a crucial service.
The budget proposal from Governor Walz in 2020 involved returning over $29 million in overpayments to the federal government. However, it remains uncertain if either tribe engaged in fraudulent activities. The state auditor noted that neither tribe cooperated with the audit, but White Earth disagreed, claiming they had indeed complied.
The issue resurfaced amidst Flanagan’s Senate campaign against Republican Michele Tafoya as a successor to Democrat Sen. Amy Klobuchar. Flanagan has faced ongoing inquiries regarding her role in the overarching fraud scandal, which federal investigators estimate could exceed $9 billion. When asked if she shares responsibility, Flanagan suggested that the Governor was accountable.
In a recent assessment, an audit covering part of her office revealed multiple findings, some unresolved from earlier audits, pointing to issues such as overpayments to former employees and various administrative errors.
Statements from lawmakers indicated that previous audits uncovered several unresolved issues, reinforcing a worrying pattern of mismanagement within the state agencies.
Flanagan has continued to reference her White Earth heritage as part of her campaign. However, this has drawn ridicule online, with some mocking her claims. Additionally, scrutiny has followed her associations amid ongoing fraud allegations within the state.
