Minnesota HMOs handle Medicaid properly

  • Article by: JULIE BRUNNER
  • Updated: March 15, 2013 - 10:42 PM

Its Medicaid handling is consistent with the law and the marketplace.

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The Star Tribune’s March 11 editorial, “On autopilot, at taxpayers’ expense,” put the cart before the horse. Conclusions drawn from a preliminary report were at best premature and at worst demonstrate a failed attempt to accurately present the facts.

Fact: For more than 10 years, Minnesota nonprofit health plans urged the Department of Human Services to do a formal study of the managed-care model of delivering Medicaid services. DHS never did a study. The report calls into question how DHS did its job, not how health plans did their jobs.

Fact: Health plans are required to participate in the Medicaid program, including the years cited in the Segal report to which the editorial was pegged. The editorial suggests that government negotiators went easy on health plans in order to maintain their participation in state health care programs. Yet state negotiators were well aware that state law required participation by the plans. During that period, and still today, the state sets the rates it will pay for the services health plans provide to Minnesotans.

Fact: Between 2004 and 2011, total health care costs (what is paid to providers for services) increased on average by 8.19 percent each year. Rates paid increased because health care costs increased. This should not surprise anyone. Suggesting something was wrong reflects a lack of understanding of the health care marketplace.

Fact: Showing a 1 percent to 2 percent profit over eight years is not considered unreasonable in the business community. The editorial cites the report’s finding that the plans collectively earned a 2.4 percent profit on two of the three programs included under their contract with the state — Medicaid and MinnesotaCare. But the report also found that the plans annually lost millions on the third program in that same contract, General Assistance Medical Care.

Like every business, health plans assess their financial health across all programs on an operating basis. When all three programs are considered, plan margins were closer to 1 percent than to 2.4 percent. While the health plans are nonprofit entities, they are not charities. These margins pale in comparison to other health care entities in Minnesota.

Fact: Health plans provide significant value to the state of Minnesota. The managed-care model allows the state to project expenditures and stay within budget projections. Access to statewide HMO provider networks ensures enrollees can see providers wherever they live throughout Minnesota. Plans have provided chronic-disease programs, fitness and senior-care programs, transportation, translator services, access to nurse lines and car seats for newborns.

The editorial closed with a reminder that a public/private partnership of this size and complexity needs continuous scrutiny and may need to evolve. We agree. If we are committed to improving health care for all Minnesotans, we need to take a close look at all the players.

That includes people providing information to health care consumers. Star Tribune readers deserve a straight story told in context. While everyone is looking for a scapegoat to blame, the truth is that Minnesota nonprofit HMOs are complying with the law and serving more than 850,000 low-income Minnesotans in the process.

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Julie Brunner is the executive director of the Minnesota Council of Health Plans.

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