Counties appeal state decision to drop UCare

One of UCare's last hopes for salvaging enrollment begins Wednesday as a three-person panel starts to hear appeals on a state decision to drop the HMO for most in public health insurance programs.

The appeals come from counties that jointly administer the state's Medical Assistance and MinnesotaCare programs.

Over the next two weeks, the panel is scheduled to hear appeals from 30 counties, some of which question the decision to drop UCare while others want to retain South Country Health Alliance, a managed care organization in outstate Minnesota.

About 135,000 UCare enrollees are in the counties seeking mediation, according to a Star Tribune analysis of DHS enrollment data. Overall, the HMO has about 363,000 enrollees in the families and children portion of the public programs, according to DHS.

State officials announced preliminary results from competitive bidding in July, and the three-person panel will recommend whether Human Services Commissioner Lucinda Jesson should make changes.

"I really think they should take a fresh look at the scoring," Jesson said. "If there are recommendations about how to do things differently, they'll make those recommendations to me."

The final decision rests with Jesson, who said she will decide by Oct. 1. That makes some county officials skeptical that the mediation process will result in any changes.

St. Louis County has appealed the decision, too, with officials saying UCare has provided good service.

"I think we need to have some answers about why we're doing this change," said Patrick Boyle, a St. Louis County commissioner. "My hopes aren't up, but I'm glad we're having a little more transparency on the issue."

Minnesota hires HMOs like UCare, and county-based groups like South Country, to manage care for 805,000 people enrolled in Medical Assistance and MinnesotaCare.

Medical Assistance is the state's version of Medicaid, which covers people at or below the poverty line. MinnesotaCare covers a slightly higher income group.

In July, DHS announced the results of competitive bidding that it estimates would save state and federal taxpayers $450 million next year, but would drop UCare as an option. South Country would be dropped as an option in 10 of the 11 counties where it currently operates.

Earlier this month, a Ramsey County judge declined to issue a temporary injunction UCare had requested to block the new contracts. A trial in the case is scheduled for November.

Earlier this month, South Country sued to get access to DHS scoring documents, so the counties that created the managed care organization can better make their case during the mediation process. DHS and South Country reached an agreement in the dispute last week, said Tom Lehman, a lobbyist for South Country.

The stakes are high for both managed care organizations.

During a legislative hearing in August, an official with South Country said his group, with nearly 100 employees, might not be able to continue without the state contract. The public programs accounted for roughly half of UCare's $3 billion in revenue last year, so the HMO might need to eliminate about half of its 900-person workforce.

Ramsey County is the largest county to appeal the state's decision on UCare. In an Aug. 24 letter to Jesson, Ramsey County Commissioner Jim McDonough said the HMO has been a valued partner in helping new immigrants, communities of color plus young and low-income families find coverage.

Jesson said bids from HMOs were scored in part on how well health plans address racial and ethnic health disparities. The department has declined to release specifics until the contracts are finalized.

Currently, Ramsey County residents in the families and children's portion of the public programs can have their care managed by Blue Cross and Blue Shield of Minnesota, HealthPartners or UCare. Under the new contracts, Blue Cross and HealthPartners would continue to be choices in Ramsey County, but Medica would replace UCare.

Ramsey County commissioners earlier this year "endorsed all four health plans," Jesson said, as good potential options.

"If we put all of the plans in Ramsey County, then we lose the advantage of competitive bidding," she said. "Yes, there are kind of winners and losers through the process, but through that process we are also able to use competition to get better value."

Christopher Snowbeck • 612-673-4744