Competitive bidding has 78,000 people changing health plans


Budget reductions, new task forces and mandates for change were laid out in a law crafted during the 2011 special session to fund the state’s health and human services programming.

With the law in effect for nearly five months, the House Health and Human Services Finance Committee received an update on changes being implemented, and testimony on whether some tweaking needs to take place during the 2012 session.

A two-year pilot competitive bidding project for MinnesotaCare contracts in the Twin Cities metropolitan area is a hallmark of the new law. The process aims for more transparency in how state money is being spent.

Although the estimated savings to the state is $175 million for fiscal year 2012, it means approximately 78,000 enrollees need to change health plans, said Scott Leitz, assistant commissioner of health care for the Department of Human Services.

The state previously used a procurement process, with rates set by the department. However, the bidding process appears to have created a disparity in the services offered. For instance, Rep. Nora Slawik (DFL-Maplewood) said that autism coverage varies within plans between Washington and Ramsey counties.

Rep. Erin Murphy (DFL-St. Paul) said, “If anything, the competitive bidding has redefined the health care relationship between the providers and the state. What’s missing is any way to evaluate the money that is being paid. When we pursue transparency we have to hone into that.”

Committee Chairman Rep. Jim Abeler (R-Anoka) wanted to know on what services providers were asked to bid.

Leitz said it was a standard package of services, but there were differences in offerings.

Rep. Carolyn Laine (DFL-Columbia Heights) said the state created the Health Maintenance Organization model, and may want to consider whether to continue down that road.

“We have providers saying they aren’t getting paid adequately for their work. What we have now isn’t good for the state, the providers or consumers,” she said.