Few complaints from Minn. health plans over Dayton order

It appeared to be a tough week for Minnesota health plans.

Gov. Mark Dayton announced Wednesday that Minnesota will no longer automatically renew contracts to cover public programs. Instead, the state is launching a competitive bidding process. The governor also signed an executive order requiring regular audits of health plans, and full public disclosure of their profits, reserves, and administrative expenses.

The actions look like a big crackdown on health plans that receive more than $3 billion a year to manage state-subsidized programs for poor Minnesotans.

But after all that, the health plans have had remarkably few complaints.

"IT'S PROBABLY A GOOD IDEA TO TRY"

To comprehend the changes facing Minnesota's health plans, it helps to understand their past.

For more than two decades, the state has paid health plans to manage its public programs based on their costs. That arrangement assured that health plans wouldn't take long term losses that could eventually put them out of business.

Julie Brunner, executive director of the Minnesota Council of Health Plans, said adequate compensation was an issue because all of Minnesota health plans are required by state law to cover at least some of the state's publicly subsidized population.

"Are some of the things that they're talking about doing things that we can support? Absolutely."

"It was mandated because there was not access to providers throughout Minnesota and there were shortages in care for people on public programs," Brunner said.

Brunner's organization is a lobbying group that represents the five plans that manage state programs. They include Blue Cross Blue Shield, Medica, HealthPartners, UCare and Metropolitan Health Plan.

The switch to a competitive bidding process is a big change. But Brunner said her members are not opposed to it because times have changed.

"If the state can set this up so that it can be a smarter purchaser and competitive bidding is a part of that, then we say it's probably a good idea to try," Brunner said.

Going forward, Dayton's plan would also focus state payments based on outcomes, rather than procedures — in effect, rewarding health plans that improve the health of their enrollees. Brunner said health plans are already used to these cost-saving tactics.

"There are currently withholds based on your performance," Brunner said. "The plans are accustomed to that and that's fine with the plans."

As for the mandatory audits and requirements that health plans disclose their profits, reserves, and administrative expenses, again Brunner said that's not a big deal, even though it may appear that way to others.

"I think it looks like that [we're under siege]," Brunner said. "Are some of the things that they're talking about doing things that we can support? Absolutely."

AN ATTEMPT TO SLOW GROWTH

To a certain degree, resistance to Dayton's plan might be futile anyway. The state is trying to close a $5 billion budget deficit and there's not much appetite for continuing unrestrained growth in health care programs.

Lynn Blewett, director of the State Health Access Data Assistance Center, said health plans have gotten that message loud and clear. The center analyzes data on the state of Minnesota's health programs.

"I think the health plans understand that the health delivery system and payment methodologies are going to change," Blewett said. "I think there's a feeling of a need to change and a willingness to participate in that change."

And there is an upside in the midst of all this change. For health plans that are particularly nimble, there is the potential to expand their business in the years ahead. The governor's decision to accept early enrollment in the expanded Medicaid program means there will be tens of thousands of new enrollees to serve.

Scott Leitz, assistant commissioner with the Department of Human Services, said its in the best interests of the state to funnels those enrollees to the most efficient health plans.

"We are looking at ways to ensure that more of the people who are enrolled in public heath insurance programs would actually be able to be captured by those health plans," Leitz said. "In a sense, they would get more volume if they're able to come in with a lower bid."

One area of potential savings that is off-limits while the state looks for new ways to trim its health care costs is Medicaid benefits. Leitz says there are no plans to reduce or eliminate any benefits.