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For Immediate Release
April 23, 2012

Grassley on Minnesota’s Decision to Return Part of $30 Million to the Federal Government

Sen. Chuck Grassley has been investigating the state of Minnesota’s receipt of a $30 million payment from a Medicaid contractor, a health care plan called UCare.  State officials repeatedly characterized the payment as a “donation” and according to internal emails, took pains to avoid repaying any of the $30 million to the federal taxpayers.  Since Medicaid is a state-federal program, any refund must be divided between the state and federal governments.  Today, state officials notified the Centers for Medicare and Medicaid Services (CMS) that the state of Minnesota has agreed to return the federal government’s share of the $30 million payment.  A U.S. House hearing on Wednesday will explore the situation, and Grassley is scheduled to testify.  Grassley made the following comment on today’s development.

“Key state officials portrayed the UCare payment as a bona fide donation unrelated to Medicaid payments and schemed to keep 100 percent of the money.  These officials failed to disclose to my office all correspondence with CMS, including CMS’ concern about the donation characterization in a July 2011 letter.  State officials have suggested that CMS knew about the payment and did nothing.  Now, the state officials are giving back the federal share of the $30 million payment, even though they continue to say the payment was a donation.  If the payment was a donation, why return the money?  This isn’t the end of my investigation.  Minnesota needs to answer for its actions on the UCare payment.  And the state clearly has structural problems with its Medicaid payments that need examination.  If a state is gaming the federal government to get more out of Medicaid, the state is gaming taxpayers nationwide and ultimately hurting the people who need Medicaid.  Congress needs to make sure this situation isn’t duplicated elsewhere.”