Senate Republicans shine a ​light on DHS management and fraud issues

An extensive joint hearing today by the Senate Health and the Human Services Committee and Senate Human Services Reform Committee confirmed a culture of mismanagement that lead to easy fraud opportunities and difficult work culture for employees.    

Senator Michelle Benson set the tone for the hearing saying, “For the first time in memorable history, the Office of the Legislative Auditor had to issue a subpoena… to get answers that we are entitled to. There must be a change, because Minnesotans who depend on these programs and who pay for these programs deserve better. For those who say, ‘It’s time to move on, there’s nothing to see here’, it’s not time to move on – it’s time to learn a lesson.” Benson continued by saying DHS would either answer questions with public information at the hearing or provide the answers to the committee by Thursday, or they could provide information to the Legislative Auditor if it was not public, but, “there is no information that DHS can keep.”

Senator Jim Abeler also shared his concerns saying, “This is us doing our due diligence, this is our responsibility. The people elect three branches of government to serve our people really well. This is the beginning of a dialogue, and I hope that this can improve communication between the agency and the legislature.”

Legislative Auditor Jim Nobles testified, “because it’s size, complexity, and importance, DHS consumes more of our attention and our resources than any other state agency.” In DHS alone, legislative auditors are investigating the Personal Care Assistance program, the Office of Inspector General (OIG), and the Medicaid overpayments to two tribal nations. 

A former and current employee also spoke about the work culture at DHS, an agency with nearly 7,000 state employees. Dr. Jeff Schiff, former Medical Director for DHS, told the committee there is “unconscionable arrogance” from a small group of administrators with an inordinate amount of control and medical advice was willfully ignored. Faye Bernstein, a current DHS employee who appeared before the committee using vacation time, told members she received a letter suggesting her appearance before the committee could jeopardize her employment. Nonetheless, Bernstein testified she was told she was too focused on compliance issues, and when she brought complaints forward, people would respond by rolling their eyes. Finally, Bernstein told committee members she experienced increasing amounts of retaliation for her persistent efforts to expose non-compliance. It was reported that Bernstein was escorted from her officewithin hours of sending an email with her complaints to her department. 

Regarding the $25 million in overpaymentsfor Medicaid services, leaders from the White Earth and Leech Lake Bands of Ojibwe both testified that the overpayments were the fault of DHS processes and approvals. Acting Commissioner Pam Wheelock testified that DHS would follow the law on repaying the federal government for the overpayments but was unable to clarify if that meant asking the tribes to repay some or all of the overpayments or asking the taxpayers to cover the losses. 

Wheelock also declined to provide specifics on who ordered an outside firm to conduct the investigation into Carolyn Ham, the Inspector General who is on paid leave since March. Or specifically when the investigation into Ham was started or will be concluded. Ham was initially on paid leave without a role but was reassigned to a temporary positionto support DHS counsel’s office in July. A new Inspector General, Bob Jacobsen, replaced Ham as interim Inspector General on August 5th. Wheelock could not give specifics on what would happen to Jacobsen or Ham if she is cleared of wrongdoing. 

Wheelock told the committee complex personalities and previous work experiences may have led to the flurry of resignations in mid-July. Despite continuing problems, investigations, and unanswered questions, Wheelock surprisingly said, “there is no scandal, no chaos,” and the work at DHS goes on. 

Carolyn Hamm, Former Commissioner Tony Lourey, Former Chief of Staff Stacie Weeks, Deputy Commissioner Chuck Johnson, Deputy Commissioner Claire Wilson, and Inspector General Bob Johnson were invited to testify but declined to appear before the joint committee.

Click here to watch the full committee hearing. 

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