Editorial: Grassley heightens HMO scrutiny

Iowa Republican Sen. Chuck Grassley's website lists the names of prominent doctors, universities and companies as examples of a system ripe for scrutiny. A recent investigation by the longtime crusader for accountability into medical conflicts of interest outed drug and device makers' lucrative payments to physicians. Among those who fielded tough questions from Iowa's powerful senior senator: Medtronic, the University of Minnesota medical school and local surgeon Dr. David Polly.

Now, Grassley has launched a timely, high-profile inquiry into Minnesota's management of its taxpayer-paid medical assistance programs -- a $3.8 billion a year business for the privately run nonprofit health plans the state pays to manage care for many public patients.

Grassley, the ranking member of the U.S. Senate Judiciary Committee, on Friday sent pointed requests for information to Minnesota's Department of Human Services and officials in 49 other states. A separate federal investigation of Minnesota's Medicaid program, one likely triggered by a whistleblower lawsuit, is also underway.

Grassley's sharply worded letter underscores the need for Minnesota legislators to follow through on concerns about plans' transparency and how they are paid by the state. A bill calling for an independent audit is making progress in the Minnesota House. But disturbing reticence on this issue by DFL leaders in both chambers and by Senate Republican leaders raises questions about how far this bill will get.

The key questions, as this Editorial Board has noted repeatedly over the past year, concern the plans' earnings from public health programs -- specifically, whether the state is overpaying the plans. Republican State Sen. Sean Nienow, DFL Sen. John Marty and DFL Rep. Carolyn Laine have pressed for answers.

Amy Klobuchar and Al Franken, Minnesota's Democratic U.S. senators, both serve with Grassley on the judiciary committee. Klobuchar said Tuesday she shares his concern and supports a thorough investigation. Franken, too, shares Grassley's concerns but also noted that Gov. Mark Dayton has already "made transparency a cornerstone of his tenure."

The issue gained urgency last spring when UCare, one of the plans, gave $30 million back to the state. Blue Plus, Medica and HealthPartners refused to make similar "donations," even though these three plans had higher Medicaid operating margins than UCare in 2010, according to calculations by respected Minnesota analyst Allan Baumgarten.

Grassley's office said Tuesday that his latest move on the issue was sparked by scrutiny of the plans in Minnesota, as well as by the looming expansion of Medicaid under the federal health reform law. Grassley's letters cited a 2010 report from the U.S. Government Accountability Office. That report found inconsistent federal oversight of states' payments to managed-care organizations.

Grassley's specific questions to the states are similar to those asked over the past year by David Feinwachs, a St. Paul attorney fired by the Minnesota Hospital Association. Minnesota Department of Human Services officials said Tuesday that they likely will draft their response over the next week. Grassley's office set a March 16 deadline for all states to respond.

A Minnesota Council of Health Plans statement said Tuesday that it welcomed Grassley's efforts to ensure responsible administration of a growing program. So, too, should Minnesota lawmakers, who risk being eclipsed by federal efforts if they don't act this session.

While the Iowa senator and his party are vocal critics of the federal health reform law, ensuring that taxpayer dollars are spent appropriately is a basic government responsibility and has long been a Grassley priority. His active interest indicates that the right questions are being asked in Minnesota.

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