At least for now, St. Louis County will not repay more than $690,000 to the state for overpayments received for the delivery of substance abuse treatment and other services.
All 87 Minnesota counties were informed of the overpayments in a letter from the Minnesota Department of Human Services in November. Only Hennepin County, with $2.16 million owed, shared more of the roughly $8 million in statewide overpayments than St. Louis County's $692,876.
"Respectfully, this letter serves as notification that St. Louis County will not consider repayment of these costs at this time," said a county response delivered to the state this week. "As you are aware, St. Louis County is disproportionately impacted by this cost due to the severity of substance use disorder needs in our county."
The money in question is apart from the $29 million in overpayments to state tribes for opioid abuse treatment — a yearslong error discovered this year that has kept DHS under fire for months.
This latest round of overpayments resulted after the state underbilled counties for services between January 2014 and May 2019. New DHS Commissioner Jodi Harpstead's administration discovered the error during her first 90 days, which she said she used to root out billing and payment problems in the wake of the tribal overpayment scandal.
The federal government paid for the services on a program that was designed for up to 16 beds in a given treatment program or facility. The state overbilled the federal government beyond those restrictions and now the state says the counties and state have to pay back the overbillings to the feds.
"State support to address this large fiscal impact is vital," County Administrator Kevin Gray wrote in the letter to the state.
In its letter, which received unanimous support this week from the County Board, St. Louis County asserted that it needed time to explore options and consult legal counsel before further attempts by the state to claw back the money. The county also questioned the accuracy of its figure.
"(We ask) that the improperly calculated claims not be included on the regular monthly billing," Gray wrote. "We rely on the Department of Human Services to provide accurate guidance and interpretation of law in a timely manner. As your partners in service delivery we alone cannot be held fiscally responsible for these errors."
The state has yet to respond to the county's position.
"We don’t have any particular expectation on a timeline for a response — we recognize how much the new commissioner is trying to sort through," county spokesperson Dana Kazel said Thursday. "But we look forward to working with the state on a solution that is fair and equitable for all and, more importantly, that addresses effective service delivery moving forward."
Editor's note: This story was updated Dec. 6 to clarify the billing explanation.