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MDH outlines ASO transition and recoupments; DLS urged restricted release pending report
Summary
DLS reviewed the Optum ASO overpayment recoupment and the transition to the Carillon administrative services organization; DLS recommended releasing restricted funds if the report shows no objections and MDH provided written invoices and asked for clarification on DLS contract cost comparisons.
DLS reviewed the administrative services organization (ASO) transition and provider overpayment recoupments and recommended subcommittee action contingent on receipt of a report, while MDH provided additional documentation and pushed back on some DLS cost comparisons.
DLS presented an exhibit showing that about $300,600,000 had been recouped out of nearly $360,000,000 identified as potential overpayments issued under the prior ASO (Optum) due to estimated payments and technical issues. DLS recommended releasing $250,000 in general funds that had been restricted pending the report on provider reimbursements and the ASO transition, provided the subcommittee raised no objections.
MDH testified that it supported releasing the $250,000 and thanked DLS for the recommendation. MDH said it disputed DLS's analysis that suggested the final six months of Optum’s contract cost nearly the same as a full contract year in fiscal 2024 and asked DLS for clarification; MDH referred the committee to written testimony and invoices for full contract payments to date. MDH also noted the Carillon ASO went live January 1, 2025 and that the fiscal 2025 working appropriation included contract funds for Optum while the Carillon contract for FY25 was budgeted under the Medicaid IT major development project line.
Committee members requested follow‑up details about forgiven versus recouped amounts and the status of referrals to collections; MDH agreed to provide invoices and more detail in written follow‑up. DLS and MDH discussion on recoupments, forgiveness and collections remained a point for follow up; the subcommittee did not take a formal action at the hearing beyond the procedural discussion about releasing restricted funds conditionally.
