DHS: Empower partial suspension imposed after Medicaid Fraud Control Unit findings; claims and services continue with oversight

Department of Human Services officials updated the Senate Public Health, Welfare and Labor Committee on Empower, the Medicaid managed-care contractor undergoing a mandated corporate split from Beacon and a concurrent fraud review.

"MFCU made that determination," DHS staff said, describing a Medicaid Fraud Control Unit finding that there were credible allegations of fraud connected to Empower. The Medicaid Inspector General then imposed a partial suspension: Empower may continue to pay claims and serve beneficiaries, but administrative expenses and other non-claim expenditures require DHS approval, enhanced monitoring is in place, and assignment of new beneficiaries to Empower is suspended pending the resolution of the Attorney General’s investigation or related legal proceedings.

DHS said it is conducting readiness-to-review work tied to the corporate split and is coordinating with CMS on required readiness reviews. Officials emphasized that the steps taken should not disrupt provider payments or beneficiary access to care and said beneficiaries had been notified because federal law requires notice when a provider faces a fraud-related suspension. DHS also said it has formed an internal committee to review Empower payments and currently expects to absorb the oversight work with existing staff while monitoring whether additional resources will be required.

Senators asked whether the fraud referral affected readiness decisions and whether the review covers functions performed across Beacon and Empower. DHS said the readiness review focuses on operational systems and that some financial oversight components are managed by the insurance department; the department could not give firm timing for the Attorney General’s investigation and offered to provide further updates when available.

DHS said it will continue enhanced monitoring and report back to the committee on developments.