There’s a battle going on between the Utah House, Senate and Gov. Gary Herbert’s office over where the new Medicaid Office of Inspector General should be located – and who, if anyone, will have power over him.

Currently, the IG is appointed by the governor with consent of Senate, and is housed in the Governor’s Office of Planning and Budget.

Under HB106, as amended, the IG would go under the auditor’s office, and the auditor would appoint the IG without Senate approval, and could remove him for cause.

Rep. Ryan Wilcox, R-Ogden, has HB106 that moves the IG to Auditor John Dougall’s office. It has already passed the House and awaits work in the Senate.

Wilcox told UtahPolicy that to some extent, unfortunately, his change has moved into the realm of personal politics: Specifically whether the IG is having pressure applied to go softer on Medicaid providers, who may owe the state tens of millions of dollars in overpayments.

The relatively new Inspector General has been auditing some of Utah’s largest health care providers over the last few years.

In a report last year to the Executive Appropriation Committee, Inspector General Lee Wyckoff reported that for the cost of his office, around $3 million a year, he has found improper Medicaid payments of between $20 million and $30 million. You can see an IG financial reports here and here.

Wyckoff says that by far most of the overpayments are simply mistakes in Medicaid coding or other non-criminal errors.

He’s already recovered more money than his office costs and is seeking more authority as he tries to get hospitals and other health care providers to pay back tens of millions of dollars he and his staff believe was improperly billed to the state’s Medicaid program

All that sounds great.

But as HB106 moves forward, charges are being made that Herbert’s office has leaned on the IG after complaints made by Utah’s large health care providers.

Some legislators want to give the IG more power – Rep. Jim Dunnigan’s HB315, is one example -- while some of those who have been audited and those who may be are concerned that the new IG is going too far; they say he’s nitpicking them to death.

UtahPolicy is told, House Speaker Becky Lockhart, R-Provo, and other House Republicans, think the IG should be moved out of that office and into the State Auditor’s Office.

That office is now being run by the new, aggressive Dougall, elected last fall, who used to be one of Lockhart’s strongest supporters when he was in the House and she appointed him vice chair of the powerful Executive Appropriations Committee.

Meanwhile, Senate GOP leaders are wondering if the IG should be under the state Treasurer’s Office, UtahPolicy is told.

Herbert says any IG should be independent, but that in most other instances it is the chief executive who appoints the IG with confirmation by the Senate. He still likes that appointment process.

Dunnigan told UtahPolicy that his bill, which now will be blended into Wilcox’s HB106, would give the Medicaid IG several more enforcement powers, including the power to force health care providers to refund improper Medicaid payments.

“The law now says he (the IG) may seek repayments, but doesn’t give him the power to get it,” said Dunnigan. Asked if he believes the IG should still be in the Governor’s Office or under a different state official, Dunnigan said it makes sense for the IG to be in the Auditor’s Office – “after all, the IG does (financial) auditing, doesn’t he?”

Asked if he believes that there is political pressure being brought in the Governor’s Office to cut back on the IG’s authority and/or aggressiveness, Dunnigan said: “I’m not going there at all.”

Wilcox told UtahPolicy: “I have heard testimony that there has been political influence attempted, and whether factual or perceived, as a policy-maker that is a concern.

“As our own legislative audits have shown, my concern is that the same entity – the executive branch – that is responsible for administrating the policy is responsible for policing the policy.

And that is a problem. We need to separate those functions, and putting the IG outside of the executive branch does that.”

It makes sense to go to the Auditor’s Office, Wilcox said, because there are already software and other experts in his office that do this, and the treasurer’s office doesn’t.

Wilcox said he believes HB106 will pass the House and Senate, “in some form.” He has met with Herbert personally to discuss the issue, but wouldn’t guess whether the governor would veto his bill if takes the IG out of his control and gives it to someone else.

Last year the Salt Lake Tribune reported that: “Assistant Utah Attorney General Robert Steed, director of the state's Medicaid Fraud Control Unit, fears "entities seeking to challenge [Wyckoff's] authority" could undermine negotiations” the IG is undertaking trying to get improper Medicaid payments back to the state.

“If doctors and the hospital lobby "try to water down the IG as they have in the past, we're going to be back to where we were before," said Steed. "Health providers are highly respected in our society, and rightfully so. But there needs to be a good watchdog over spending."”

Bluntly put, can Wyckoff’s office do its proper job under Herbert’s administration?

The success of the office speaks to that, Herbert’s press office said.

Herbert briefly addressed the issue in a press availability Tuesday afternoon. He said he supports the IG being independent – outside of any elected officeholder’s control. Thus, he doesn’t see moving the IG to the auditor’s office any real change – he could still be under the influence of a politically-elected officer.

“Any inspector general should be independent,” no matter the federal, state or local government, Herbert said. “This issue (where the Medicaid IG should be) has come up just in the last couple of days.”

Herbert spokeswoman Ally Isom told UtahPolicy: “"Without question, the governor recognizes the important role of internal auditing and appreciates the work of (Medicaid) IG in safeguarding and saving taxpayer money.

“He also agrees that the IG should be independent from any political influence from any elected officials.

“However, moving the IG from the governor's office to the auditor or treasurer (who are also elected and seek campaign donations) does not solve that problem, so Gov. Herbert has committed to work with the President of the Senate and Speaker of the House over remaining days in the session to find the right solution."

UtahPolicy is told that Tuesday former Herbert budget boss Ron Bigelow addressed the closed Senate GOP caucus on the issue of where the IG should be located. He was also meeting with Lockhart.

Bigelow, a former Utah House Republican, was the longtime House budget chairman before Lockhart replaced him when she was elected speaker two-and-a-half years ago.

Bigelow resigned his House seat to become Herbert’s budget director, and retired from that post the first of this year as Herbert reshuffled his cabinet.

Bigelow, a CPA who worked for the LDS Church, was instrumental in getting the IG office placed in the governor’s Office of Planning and Budget when he was in the Legislature.

Bigelow told a committee hearing on HB106 earlier this session: "I will tell you that political pressure is alive and well, functioning and prospering in the state of Utah. And as it relates to the IG it is very real.”

Last year Herbert created a new budget/planning office position and placed another person over Bigelow, who then retired as Herbert began the first year of his own four-year term.