By Warren Wolfe and Brad Schrade

The ousted former lawyer for the Minnesota Hospital Association testified today that insurance companies may be reaping much larger profits off taxpayer supported programs than state officials really know.

That's because there's not enough transparency and accountability in reports that the nonprofit health plans file with state and federal authorities, according David Feinwachs, who said he was ousted in November.

Since then, Feinwachs has become somewhat of a minor celebrity around the health care debates at the State Capitol and Minnesota's patient advocacy community.

"What makes a good insurance company doesn't necessarily say it make a good administrator for your public programs," Feinwachs said afterward. "Insurance companies are regulated on a system that requires them to be wealthy and have a great deal of money. Managing the payment of public program proceeds and ensuring health of populations of public programs doesn't necessarily have that as its first or primary goal."

The latest figures from 2009 show that the managed care plans earned 4.1 percent on the state plans they manage compared to 1.6 percent on their commercial plans. Representatives of the managed care plan testified before the House Health and Human Services Finance Committee that information they believe legislators are seeking already is available among about 200 reports filed with various state and federal agencies.

"If we are not submitting or sharing information to what your questions are regarding we are open to submitting different information," said Ghita Worcester, a senior vice president with UCare, one of the larger health plans in the state.

She said perhaps scores of reports need to be collected at a central website.

As state lawmakers search for ways to fix a $6.2 billion projected budget hole, health care costs are a major target in that equation. Public programs like Medicaid for the poor are among the fastest growing expenses in state government.

One issue lawmakers are struggling with is how to reform a system they don't fully understand how money is currently spent and ensure there are not excessive administrative or other non-medical expenses in the safety net programs.

"Where is this data and how can we get at it," said Rep. Steve Gottwalt, R-St. Cloud, who chairs the House healthcare policy committee.

Some estimate that as much as 10 percent of medical costs in the programs is waste, while others say it could be as high as 30 percent, according to Rep. Tom Huntley, DFL-Duluth, a former chair of the committee.

"Where is the incentive to get rid of the waste?" Huntley said.