file, Associated Press


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"UCare voluntarily contributed $30 million to the state last year given several unforeseen circumstances involving state public health programs and the state's budget deficit. It was the right thing to do, and we stand by our decision to be a proactive part of the solution to Minnesota's budget crisis. We strongly disagree with how some individuals have characterized our contribution."

-From a statement by UCare

Editorial: Grassley ramps up health plan inquiry

  • March 8, 2012 - 8:33 PM

Minnesota policymakers foolishly brushed off concerns raised last week by U.S. Sen. Chuck Grassley about the state's management of its taxpayer-paid medical assistance programs. They shouldn't make that mistake again.

In a razor-edged flurry of letters sent Thursday, Iowa's Republican senior senator made clear that he's concerned about Minnesota's Medicaid program and has serious questions about whether the state is overpaying its nonprofit health plans to manage care for the needy.

In Minnesota, that's a $3.8 billion-a-year business. It's also a lucrative business for the insurers. In 2010, public programs provided about 46 percent of the health plans' revenue but 78 percent of their earnings, according to Minnesota analyst Allan Baumgarten.

Last spring, an unexpected $30 million giveback to the state by one of the plans -- UCare -- heightened overpayment questions. A separate federal investigation is also looking at whether the state improperly drew down federal funds to pay for state-only health programs.

Grassley's letters were sent to Gov. Mark Dayton, the U.S. Department of Justice and to the state's four big insurers -- Blue Cross, Medica, HealthPartners and UCare. He'd previously sent a letter to all 50 states demanding more information about Medicaid rate-setting.

That initial inquiry was met with stunning indifference last week by Minnesota's legislative leadership. State Sen. David Hann, R-Eden Prairie, circulated a letter from state Department of Human Services Commissioner Lucinda Jesson.

That letter downplayed Grassley's inquiry as routine and noted that "this was neither directed at Minnesota nor solely motivated by our managed care experience.'' Hann, who in an interview last week portrayed the plans as victims of burdensome regulation, also deflected questions about when he'd allow a committee hearing on a bill calling for an independent audit of the plans. On Thursday afternoon, a spokesman for Hann said that committee hearing would happen Monday.

Grassley's letters ask many of the same questions this editorial page has repeatedly posed: Was $30 million the right amount, and why didn't the other three plans pony up? What else is the state doing to ensure that plans are paid appropriately?

Grassley also posed a new question: Is the federal government owed some of that $30 million because it jointly funds the program? Grassley's Department of Justice letter focuses on e-mails written by Jesson in which she emphasized that the giveback had to be characterized by UCare as a "donation" to help the state keep the total $30 million.

To be fair, Dayton's administration has made significant changes in health care purchasing since taking office. Among them, it's introduced some competitive bidding for the plans and has ordered audits by the Department of Commerce, though those audits haven't begun.

The Legislature, however, has done little to address critical questions about the state's outsourced Medicaid business. In fact, it awarded the plans more of the state's business last session.

Grassley is asking the hard questions that Minnesota lawmakers should have demanded answers to a year ago. Legislators need to follow his lead and ensure that Minnesota's nonprofit plans aren't profiting too much at taxpayers' expense.


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