Errors and lack of information in billing the federal government for services and rules associated with programs could cost Minnesota counties and American Indian tribes, a lot of money.

The errors come from chemical dependency treatment reimbursement, where about $8.8 million were improperly reimbursed, foster care reimbursement, where incorrect claims are at least $623,812, and counties and tribes collecting overpayments from cash assistance recipients who had more assets than stated on applications.

In a letter to counties, Department of Human Services (DHS) Commissioner Jodi Harpstead outlined the issues and what caused them.

Harpstead was named DHS Commissioner by Gov. Tim Walz in August.

In the case of the chemical dependency dollars, between January 2014 and May 2019, DHS used federal dollars to cover county and tribal portions of chemical dependency treatment costs, Harpstead wrote.

Under federal law, DHS has to repay the feds for Medicaid money it used to pay institutions for mental disease, which are not covered under that program.

Harpstead said she understood that counties would be frustrated by this issue and plans to work with counties to mitigate the impact.

“I want to work closely with county representatives to figure out how these funds can be recouped in a timeframe that best allows you to plan for and mitigate the impacts,” she said.

Of the $8.8 million improperly used funds, Mower County’s share is $77,945.03.

The second issue stems from counties and tribes seeking reimbursement for children’s residential foster care when not all employees have fingerprint background checks completed.

Federal law required this effective July 1, 2019, while state law gave providers until March 1, 2020, to come into compliance, Harpstead said.

“As a practical matter, it would not have been feasible to require facilities to come into

compliance on the same date that the requirement, which was driven by federal law, went into effect,” she said.

However, DHS did not inform counties at the time that any reimbursement requests made after July 1 for providers whose employees had not completed the checks were invalid.

“We know that counties rely on guidance from DHS to implement changes in law and we did not issue our guidance on this issue in a timely manner,” Harpstead said.

The state is currently unaware of any such facilities being currently in compliance, so it is unable to reimburse claims made during the time period from when the federal law went into effect.

Finally, the state, counties and tribes will have to work to repay individuals for money taken due to them being overpaid from cash assistance programs as a result of administrative errors.

In 2016, a law was passed stating that individuals on cash assistance programs were not required to repay overpayments caused by county, state or tribal errors, with the exception of the error being something a reasonable person would notice, Harpstead said.

Guidance to the counties and tribes by DHS led to them collecting overpayments when they should not have, Harpstead said.

She said DHS plans to repay the amounts collected in error and is working with groups to figure out how to suspend collections and repay the money.

There will likely be an impact on county staff time, but DHS is working to make this process as minimally impactful as possible, Harpstead said.

She plans for DHS to avoid these issues in the future.

“DHS is making lasting changes that will alter how we do business moving forward,” Harpstead said.

To prevent billing and payment issues in the future, DHS is conducting an internal review of policies and systems, changing how these processes are approved and it plans to bring in an outside expert to research best practices in other states, as well as non-profits and other organizations, to make recommendations for changes to the agency, she said.

The external report is expected to be completed in the spring of 2020.

Mower County Administrator Trisha Harren said the county is aware of the issue and is working with the Association of Minnesota Counties to have repayment of the funds delayed until the amounts are verified as accurate.

In addition, Harren said the hope is to delay it until after the end of the state legislative session in May, in case the Legislature approves a measure to assist with covering the costs.

The county is working to figure out how many overpayments it collected, but it knows it did not use the federal Title IV money used for foster care reimbursement, Harren said.

While the county will work to figure out any options for repaying the funds, ultimately it may affect property taxpayers, she said.

“Really the only recourse we have is to pass this on to our property taxpayers, so we are really disappointed,” Harren said.

The state will also have to work with the federal government to delay repayment, she said.