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Human Services hearing leaves lawmakers with more questions

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State Sen. Jim Abeler
State Sen. Jim Abeler, R-Anoka, holds up a business card, saying that it was all the information he had gotten regarding issues in the DHS during a senate hearing about recent events in the Minnesota Department of Human Services Tuesday.
Nicole Neri | Star Tribune via AP

Minnesota lawmakers spent more than three hours on Tuesday revisiting a string of recent issues within the Department of Human Services, from handling of whistleblowers and investigations of fraud to millions in overpayments for substance abuse treatment.

“This is not a witch hunt, this is not a rodeo, this is not a gotcha thing,” Sen. Jim Abeler, R-Anoka, said at the hearing. “This is us doing our due diligence.”

But lawmakers seeking answers about what’s going on inside the massive agency were left wanting more.

Many of the people asked to testify — including former DHS Commissioner Tony Lourey and his chief of staff, who resigned unexpectedly last month — did not attend the hearing. Neither did two DHS deputy commissioners, Chuck Johnson and Claire Wilson, who submitted their resignations last month but then rescinded them when Lourey resigned.

The administration hasn’t provided an explanation for the sudden shuffles, but Senate Republicans, who called the hearing, asked Acting DHS Commissioner Pam Wheelock whether Lourey was forced out because he pushed for change within the massive agency.

“I have not found any issue about impropriety,” Wheelock said. “I have not found any issue about any kind of criminal activity. There is no scandal. There is no chaos.”

The issues have all played out over the span of several weeks and have painted a picture of turmoil within the department. DHS is a massive agency -- the largest in state government -- with roughly 6,700 employees and a nearly $18 billion two-year budget. It handles a wide range of services for 1.2 million Minnesotans each year, including adoption, welfare programs and sex offender treatment.

Lawmakers were frustrated that the hearing didn’t yield more concrete answers, and said they would hold more hearings soon.

“There’s something bigger than personal issues, because personal issues can be resolved, they can be walked through,” said Michelle Benson, a Republican senator from Ham Lake who called the hearing. “We’re not done yet.”

Others did show up testify about the agency, including Faye Bernstein, a DHS compliance officer who sent an email to other staffers in the agency’s behavioral health division earlier this year about her concerns over compliance in state contracts. After that email, Bernstein said agency officials retaliated against her in July, escorting her out of her office and prohibiting her from DHS property. She was told at the time that she was being investigated for misconduct.

“I am a good employee. I feel I am a very good employee. The time spent on the retaliation has been very much wasted time,” she said. “What I was pointing out originally was quite routine, and it was simply my job. And to spend a lot of time on this, and really for me to be here, is a waste of time for DHS.”

Bernstein is back at work now, but she said she was warned by a fellow employee that she could be fired if she testified at the hearing Tuesday, even though she used a vacation day.

A man speaks at a legislative hearing
Dr. Jeff Schiff testifying in front of a joint Senate hearing Tuesday on ongoing issues within the Department of Human Services.
Briana Bierschbach | MPR News

Dr. Jeff Schiff, who served as the director of Medicaid for DHS for 13 years, was dismissed from the department in July. He testified about what he sees a pattern of bureaucratic officials dismissing the advice of medical professionals within the agency.

Schiff specifically cited a situation where people needed opioid use disorder treatments urgently and doctors within the agency had to fight with top officials to get prior authorization to administer the drugs.

“We worked against an entrenched dynamic that valued short-term financial interests over appropriate care,” he said. “In what I would consider unconscionable arrogance, leaders in the healthcare administration dismissed medical input from myself and many other physician experts.”

Representatives of two Minnesota tribes, the White Earth Nation and the Leech Lake Band of Ojibwe, also testified about recent alleged overpayments made to them by DHS over the last few years for chemical dependency treatments covered by Medicaid.

The tribes said they were advised by DHS to bill for those treatments that the agency now says led to $25 million in overpayments over the course of five years. They also said the program has been audited and nothing was ever uncovered. The department has set a one-year schedule to repay the money owed to the federal government.

“These are things that have us scratching our head over on Leech Lake,” said Leech Lake Chairman Faron Jackson.

The Office of the Legislative auditor is doing a deep dive into those overpayments, but Auditor Jim Nobles warned lawmakers that it’s going to take time, as do all audits in the complicated agency.

He also said auditing alone won't be enough.

“We cannot audit our way to good government,” he said. “Audits are important, but you really have to have integrity really built into the day-to-day operations of departments and agencies.”