Minnesota watchdog looks for fraud, waste in health, welfare programs

Jerry Kerber has his eye on a huge chunk of Minnesota’s budget, as inspector general for fraud, waste and mismanagement in state health and welfare programs.

The lifelong Minnesotan was named to the new position at the Department of Human Services last month.

The veteran of state government — who headed the agency’s licensing division for more than 15 years — will oversee a staff of 150 to ferret out everything from welfare fraud and false claims by medical service providers to simple oversights that cost the state.

With a two-year budget of more than $22 billion in state and federal funds, the Human Services Department is involved in the lives of more than a million Minnesotans who rely on state programs for health care, food support, welfare, mental health treatment, home care, nursing homes and child care aid. The agency also licenses 24,000 medical and social service providers.

Kerber, 56, spoke with The Associated Press last week.

Q. So, your new job involves investigating everything from intentional fraud to costly mistakes?

A. We’re looking at all of it. ... This is kind of a new day of public accountability, I think, for state agencies. We’re distributing $11 billion a year in these programs, and that $11 billion is certainly even more precious than ever. There’s a growing desire among the public to know for sure that that money is going to the right place.

Q. How much is recovered from fraud and waste each year?

A. Kerber: I would say in the vicinity of $12 million (by the state and counties). There’s more money that’s actually recovered, but it gets complicated because some of it is through big global settlements (negotiated by the federal government).

Q. How do you recover the money?

A. When somebody is found to have misrepresented themselves, they’re put on notice that they have to pay the money back. ... Providers are put on notice that they’ve been overpaid for some amount of money. ... If it’s found that they’ve received more money than they ought to have received, they need to pay it back. ... (Under a new civil claim option available under the federal False Claims Act), the amounts of money are pretty significant. It really motivates people to engage in settlements.

Q. What will the 150 people working for you do?

A. One of the things I’m looking forward to is directing our licensing inspection activities to follow the money a little more. We’re buying, as I said, $11 billion worth of services out there. Some of those are licensed services. So, let’s find out who we’re buying services for before we go out to this licensed program.... There may be some opportunities here to reclaim some payments.

Q. How much of this will be data mining as opposed to other ways of finding fraud, such as complaints or tips?

A. There is a real interest in data mining. We have some staff right now who look at those kinds of things and run reports. They’re looking for anomalies — double billings for the same period of time or the same client.

Q. Will data mining change the way the department investigates fraud?

A. There are people who have good relations with their providers and even though they may suspect that there’s some billing anomaly there, they don’t want to raise it to anybody’s attention. What this does is it sort of takes the emotionality out of this entirely, and it just allows us to run this data. The data is sitting there and we get to run it and look for anomalies that might be in there, look for red flags and check them out — even if the provider is a very nice person.

Q. How much do you rely on technology?

A. A lot of our systems were basically set up for people who had all the best intentions who we counted on to do the right thing, and usually people did. Sadly, that’s not our reality anymore. ... We are certainly not going to be in any way tolerant of employees violating the public trust. And so we’re investing pretty heavily in some software options to monitor that better.

Q. Do you worry about adding red tape to the bureaucracy?

A. We are accountable for this money, and if somebody doesn’t understand that, they just need to come to understand that.

Q. Do you see your office becoming self-supporting or bringing in money for the state?

A. . I think so, and that’s why I mention the change during the legislative session that we just finished — where we can actually pay for some contractors out of the money that we ultimately recover. ... And the good news is, we don’t pay the contractor unless there’s a recovery, either.

Tags: inspector general, jerry kerber, department of human services, news, minnesota, health, welfare, mismanagement