It started with a federal report on fraudulent Medicare practices that cited unnamed health organizations that were buying such frivolous items as Timberwolves tickets.
The report's mention of the Timberwolves tickets caught Minnesota Attorney General Mike Hatch's attention and the resulting investigation led to this week's $16 million settlement with the U.S. Attorney's office.
Hatch's issued his final report into whether extravagant perks and spending by the health system violated its status as a nonprofit. He found the company spent more than 18.7 percent of its money on administrative costs, which could very well be one reason why health care is more expensive in Minnesota than in many states.
Hatch's probe told of lavish gifts for executives such as a $590 private limousine tour of Napa Valley vineyards; a $1,295 hot air balloon ride with a champagne brunch; exclusive golf club memberships, $2 million for a consultant who provided "executive coaching" but who never had a written contract.
It was clear from the outset the attorney general's office had discovered a prime example of financial mismanagement in the Allina Health System. There were $13 million in "billing errors," which is a generous label for actions that were clearly inappropriate for a nonprofit organization. Hatch and his attorneys had the Allina leaders dead to rights, Which is why top executives left the firm and a restructuring was begun shortly after the attorney general's probe became public.
It's not a stretch to surmise that Allina's inappropriate expenditures played a role in raising health care costs for many Minnesotans. Exposing this waste through an exhaustive report was a costly and time-consuming endeavor for the attorney general's office, but one that was that it was worth it for Minnesotans.
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