Lawmaker urges more oversight of Medicaid managed care

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Sen. Charles Grassley (R-IA)
Sen. Charles Grassley (R-IA)
Medicaid managed care contracting should come under increased federal and state scrutiny, a prominent senator said Wednesday.

Accountability “is severely lacking in a program that is spending $7 trillion combined federal and state taxpayer dollars,” said Sen. Charles Grassley (R-IA) at a joint House hearing featuring oversight and health panels. Grassley has been investigating whether states are paying proper reimbursement rates to their Medicaid managed care plans.

Grassley singled out Minnesota and a $30 million overpayment from UCare, one of four contractors that oversee Medicaid programs for the state. The commissioner of the Minnesota Department of Human Services, Lucinda Jesson, testified that she believed the money was a donation, but the state later agreed to share the profit with the federal government.

The former general counsel for the Minnesota Hospital Association, David Feinwachs, said $30 million was in fact reimbursement of state overpayments to UCare, and said Minnesota has inflated Medicaid rates since at least 2003, the Minnesota Star-Tribune reported. The hearing also examined cases alleging poor oversight of Medicaid funds in New York and Texas.

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