The Minnesota Department of Human Services has issued a decision that will allow 16,000 Olmsted County residents and thousands more in other southeastern Minnesota counties to keep their preferred health plans for two more years.
In August, numerous counties appealed to DHS after the results of a statewide bidding process did not offer contracts to providers, including UCare in Olmsted and South Country Health Care Alliance in 12 southeastern Minnesota counties, as choices for residents receiving MinnesotaCare or prepaid Medical Assistance plans.
Twenty-eight of Minnesota's 87 counties filed similar appeals, seeking to add or retain providers. The state convened a three-member panel in expedited mediation to review the bidding process and counties' data.
Thursday, DHS Commissioner Lucinda Jesson issued an order modifying the state's contracts with MinnesotaCare and Medical Assistance providers.
In Olmsted County, the DHS decision retained a third managed care plan as an option for residents: UCare. UCare currently serves about 16,000 Olmsted County residents, more than either of the other two providers DHS had originally proposed to award contracts, Blue Plus and Medica. It also kept SCHC as an option in the 12 southeastern Minnesota counties it serves.
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"We're delighted," said Paul Fleissner, Olmsted County Director of Community Services. "I'm a little bit surprised but very delighted. I think we made a good argument and the beneficiaries are going to be the clients in our community — they're going to have a lot of choices."
The decision will keep UCare in place as an option for Olmsted County residents through the next two-year contract cycle.
UCare lost out on contracts in other counties, including St. Louis and Ramsey, which both joined the DHS appeals process.
"While the county appeals results largely are not favorable to UCare, we are pleased that Olmsted County was successful in its appeal. We are assessing the business impact of remaining as a MinnesotaCare and (Prepaid Medical Assistance Plan) provider in only one county next year," read a UCare statement released Thursday by Deanne Probst, Ucare communications specialist.
Protecting county-based purchasing organizations
For South Country Health Alliance — a health care county-based purchasing organization based in Owatonna — the decision gave a sigh of relief. From the proposed health plan switchover, the viability of the county-based purchasing organization was at risk.
"Our South Country team has been amazing," said Leota Lind, CEO of SCHA. "Over the last 2 months there has been a great deal of uncertainty regarding the final outcome. Our team did not falter, they continued to provide great service to our members, providers and counties and we will continue to do so moving forward."
The organization argued that state statutes specifically protected protected the right of counties to enter into county-based purchasing, and therefore South Country should not have been treated as a traditional HMO,, said Dan Rechtzigel, Goodhue County Commissioner and chairman of the alliance. If the original decision was allowed to stand, the organization would be forced to close, he said.
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"We gained tremendous support from legislators from all over the state," Rechtzigel said. "We still have more work to do when it comes to clarifying state statute, so we will be working with our legislators to draft legislation that will prevent this unfortunate situation from happening again."
If the mediation hearing had not succeeded, then South Country's total membership in Medical Assistance, covering low-income people, would have been reduced by 29,232, and its MinnesotaCare membership by 2,042 — reducing total membership enrollment by 85 percent. Dodge County would have been the only county out of 11 that would have remained eligible to contract with SCHA.
South Country also funds a major portion of staff positions for the HealthCare Coordinators at the Owatonna Hospital and New Ulm Medical Center — which would have also resulted in job losses — and currently contracts with the following counties: Brown, Dodge, Freeborn, Goodhue, Kanabec, Morrison, Sibley, Steele, Todd, Wabasha, Wadena, and Waseca.
"South Country will remain a plan choice for our clients," Rechtzigel said. "We will continue to provide high-quality health insurance for our members, and we will work with our legislators to clarify state statutes regarding county-based purchasing."
