Metropolitan Health Plan loses out on state-funded business

  • Article by: JACKIE CROSBY , Star Tribune
  • Updated: September 2, 2011 - 11:11 AM

The state has started narrowing the field as insurers compete for its contracts.

Metropolitan Health Plan has lost out on its bid to provide state-funded insurance for low-income families in the Twin Cities area.

The plan, Hennepin County's insurance program for the needy, learned of the decision in an e-mail Tuesday from the Minnesota Department of Human Services, which has embarked on the state's first attempt to force plans to compete for the $3 billion taxpayer-funded insurance contract.

"This is a blow," said Mike Opat, chairman of the Hennepin County Board. "This puts our future in jeopardy. We're trying to figure out, frankly, how and whether we go forward with operating an HMO."

About 16,000 of the plan's 20,000 enrollees will be affected by the state's decision, which means that at the end of the year those people will be getting a new insurance plan.

The state won't say which plans did make the cut until the process has been completed this fall, spokeswoman Karen Smigielski said. Of the five health plans that put in bids, four will continue negotiating with Human Services, she said.

The bidding process is a key part of Gov. Mark Dayton's attempt to save taxpayers money by scrutinizing how contracts are awarded for taxpayer-funded health care plans. The process in the metro area covers insurance benefits for about 273,000 people on medical assistance in the seven-county area, and is the first look at how it will play out across the state in coming years.

In previous years, the state set payment rates based on each plan's historic costs. The new process uses a point system to grade plans on their ability to provide quality services at a low cost.

Metropolitan is by far the smallest of the nonprofit health plans that operate in the metro area, and has had a history of struggling to maintain mandated reserves to pay for care.

"We're disappointed, mostly for the members we serve," said Metropolitan Health Plan CEO Cynthia MacDonald. "As a safety-net health plan, in Hennepin County in particular, we've got an under-served, vulnerable and sometimes frail population. Often there are some complex diagnoses -- not only medical, but behavioral health, chemical dependency, and some with social service needs."

Metropolitan is owned and operated by the county but is self-sustaining. No county tax dollars are used to run the plan, which gets federal and state Medicaid dollars.

Metropolitan will continue to serve seniors and disabled people, who were not part of the bidding process. And MacDonald stressed the organization is committed to working with present enrollees to ensure a smooth transition.

Jackie Crosby • 612-673-7335

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