Walz's plan to transform human services faces tough sledding at Capitol
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A pitch from Gov. Tim Walz to dramatically overhaul how Minnesota delivers its human services programs was declared "DOA" by at least one key legislator before the ink even dried.
Why it matters: Virtually everyone at the Capitol agrees that Minnesota has a fraud problem, but they can't yet reach a consensus on how to fix it.
Driving the news: The governor's latest package of reforms, released Tuesday, contains some of the most sweeping changes proposed to date in response to concerns about significant fraud targeting Medicaid-funded services.
- The biggest change: Shifting more administration and oversight from counties and the private health plans that manage benefits for most Minnesotans enrolled in Medicaid back to the state.
What they're saying: Walz and his deputies said the goal is to modernize and streamline an antiquated, decentralized "patchwork" system they argue has left the state susceptible to fraud.
- "The proposals we're talking about today are not business as usual," Department of Human Services Commissioner Shireen Gandhi said. "These are bold ideas to address major challenges head-on."
Reality check: GOP Rep. Paul Torkelson, co-chair of the powerful House Ways and Means Committee, said giving the embattled Department of Human Services a bigger role in the process "has no future as far as I can tell" at the divided Legislature.
- "To put more responsibility on a state agency that acts irresponsibly, to me, is just at the very start a bad idea," he said. "They haven't been able to handle the responsibility that they've got."
The intrigue: While some DFL leaders have previously expressed interest in a wholesale revamp of the state's human services system, Walz's proposal drew pushback from at least one influential Democrat.
- Sen. John Hoffman, chair of the Senate Human Services Committee, said he was "disappointed" that the governor crafted his proposal "without a thorough conversation" with committee members.
Yes, but: DFL Rep. Mohamud Noor, co-chair of the House's human services committee, pointed out that there's some overlap between the governor's plan and proposals supported by House Democrats, even if the details differ.
- He argued that giving DHS more control would lead to stronger legislative oversight, accountability and transparency.
- "I think we are aligned," he told Axios. "But it's how do we get there."
Follow the money: Cost is also a concern. The state budget director estimated that the price tag for the shift could total $72 million over the first four years, before accounting for expensive technological upgrades.
- Moving more work under DHS would also lead to hundreds of new state government jobs, a move Torkelson argued leads the state "in the wrong direction."
Between the lines: Republican legislators, including fraud committee Chair Kristin Robbins, have also argued that the private plan administrators Walz wants to phase out, known as managed care organizations, have done a better job finding and flagging fraud than the state has.
- DHS inspector general James Clark pushed back on those claims, saying he hasn't "seen any evidence that managed care organizations are better at spotting or detecting fraud" than the agency.
Walz disputed Hoffman's characterization of his lack of communication, but said he's open to debating and negotiating the plan with legislators who are experts on the subject in both chambers.
What we're watching: While Walz's full package faces an uphill climb, a related pitch to upgrade outdated computer systems used for these programs does have bipartisan support.
- Torkelson and Robbins both said that should be step one.