The Potluck

Gov. Walz budget proposal covers $29 million overpayments to tribes

By: - March 14, 2020 2:00 pm

Tucked into Governor Tim Walz’s $257 million supplemental budget proposal is a line item returning more than $29 million to the federal government for overpayments the state made to two tribes for addiction treatment services.

If the Legislature approves, the payments would bring Minnesota a step closer to resolving a year-long saga that has strained the state’s relationship with the White Earth Nation and Leech Lake Band of Ojibwe.

“(The governor knows) that this was the state’s fault and said that he would keep the tribes unharmed from it,” White Earth Chairman Michael Fairbanks said in an interview with the Reformer. “He’s following through on his promise.”

The Office of the Legislative Auditor conducted an investigation and reported last fall “troubling dysfunction at the Department of Human Services” leading to the overpayments.

Over the course of five years, the DHS distributed too much Medicaid funding to White Earth and Leech Lake for their chemical dependency treatment programs even after the tribes asked for clarification on billing.

DHS told the tribes to bill the department the standard encounter rate of $455 for each dose it distributed of suboxone, a daily medication that helps people withdraw from opioid dependency.

But the federal government only authorizes the $455 rate when there is an in-person interaction between patients and medical providers. As treatment progresses, patients may visit the clinic less frequently for counseling and medical appointments and are allowed to take their daily doses of suboxone home to take on their own. Under Medicare reimbursement rules, the state should not have told the tribes to bill for suboxone doses when patients took them on their own.

The overpayments were discovered in the spring of 2019; state law required the tribes to repay more than $29 million.

Leaders from White Earth and Leach Lake refused, saying they followed DHS’s instructions and that the money had already been spent on medical services. Paying back tens of millions of dollars would put their treatment programs at risk of closing, they said.

“If we have over 300 White Earth patients that all of a sudden lose access to this medication we are going to have a disaster on our hands,” said a consultant on the treatment program, Adam Fairbanks, at the time. “Overdoses will increase.”

Sympathetic lawmakers of both parties agreed and said the Walz administration should find the money elsewhere.

White Earth has continued providing take-home doses to patients, although they haven’t been reimbursed by Medicaid for it. Chairman Michael Fairbanks says the state still hasn’t told the tribe how much it can charge for the service.

They’ve been covering the cost with their own resources in order to keep what the tribe considers a life-saving program going while they wait for clarification.

“These programs have changed people’s lives,” Chairman Michael Fairbanks said. “Before these programs came, we were burying a lot of our young people because of heroin addiction. We’ve saved a lot of people.”

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Max Nesterak
Max Nesterak

Max Nesterak is the deputy editor of the Reformer and reports on labor and housing. Most recently he was an associate producer for Minnesota Public Radio after a stint at NPR. He also co-founded the Behavioral Scientist and was a Fulbright Scholar to Berlin, Germany.