Decision On Bidding Process Leaves Counties With Questions

An appeals process, undertaken by twenty-eight (28) counties in Minnesota, sought to undo or at least forestall a ruling by the MN Department of Human Services (DHS) regarding healthcare contracts.  Their appeal had some success, but still left many questions unanswered as to the future and the budgeting process that will be needed to keep health programs functioning at a high level.

Prior to the DHS awarding of new contacts for 2016, counties who were part of a County-Based system of Purchasing (CBP) for healthcare were the sole contractor with healthcare providers in their region for Minnesota’s low-income programs (Medical Assistance and Minnesota Care).  DHS went through a new bidding process this past summer and they decided to award healthcare contracts to three private HMOs (Health Maintenance Organizations) and, at the same time, mostly eliminate contracts with CBP systems serving rural Minnesota.

A majority of the affected counties filed an appeal to DHS and their grievance was heard by a 3-person panel.  After hearing and reading testimony from dozens of CBP supporters from throughout the state, fourteen (14) of the counties won modifications to the bidding results, with Olmsted County receiving permission to add UCare as a potential third insurer. St. Louis and Wright counties were permitted to negotiate with Medica as a potential third provider as well.  The panel ruled that all of the CBP counties would be able to continue to receive and administrate their state healthcare contracts, but would not be the sole source as before.  The counties will now share administration with another provider in their area.  In Kanabec County, for instance, the secondary choice will be Medica for low-income healthcare administration.

This decision is likely to create some new challenges at the county level for CBPs that had been doing all of the administration and budgeting for the system.  It is not clear, and may not be for some time, how much of the business will flow through the county and how much will flow through private HMOs like Medica.  The state’s PMAP (Prepaid Medical Assistance Program) enrollees could end up in the county’s private HMO choice with the local CBP ending up with half of their previous business or less.

        UCare, which was one of four (4) HMOs serving the vast majority of low-income enrollees in the state, now has an uncertain fate, as they have been excluded from most all of the programs. Its business providing federal Medicare plans and smaller state programs for senior citizens will be unaffected. In early November, a judge is scheduled to consider the insurer’s arguments that the state bidding process was unfair and tipped competitors to financial information that allowed them to make superior bids.

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