Minnesota is a unique health care market, where nonprofit managed-care organizations are at the forefront of significant changes.

Blue Cross and Blue Shield of Minnesota is the largest and oldest provider of health coverage in the state, dating to 1933. We are a hometown company in a state with a long history of making public health a top priority. We also have the privilege of collaborating with other local health plans at a level not seen in many other states.

Minnesotans rightfully expect us to compete in business but work together on initiatives to improve all areas of health.

Public insurance programs are a key area where health insurance organizations are engaged in healthy competition while sharing a commitment to bettering community health. The state decided it was in the public interest to require competitive bidding for administering these programs in order to obtain the best services at the best value.

Beginning in 2011, the Department of Human Services (DHS) started to implement major changes in how managed-care organizations would be selected as administrators of the state Medicaid and MinnesotaCare programs. Plans would have to submit detailed proposals with pricing quotes and details on initiatives designed to drive greater value for the state. The first round of competitive bidding covered only the seven Twin Cities counties. The second round expanded to 27 counties. The most recent round, this year, placed all 87 Minnesota counties out for competitive bid.

Blue Plus, the HMO arm of Blue Cross, submitted proposals in all three rounds. Going in, each year, we understood that direct competition came with the very real risk we could lose members and lose business through this process.

In the second round, in 2013, the worst-case scenario happened to us. Of the 27 counties placed out for bid, Blue Plus was awarded none. We were shocked. Having to discontinue administering these programs in areas of the state that we had served for decades was hard to accept. In that moment, it would have been very easy for us to blame the process for our loss. Instead, our organization took it as a challenge to evaluate where Blue Plus fell short. It was clear that in order to earn the right to serve Medicaid and MinnesotaCare enrollees, we simply had to do better. It’s what informed our approach to developing a more competitive proposal for the statewide bid this year.

All bidders this year were provided clear instructions as to what the state was expecting in quality, service, cost and capabilities. It was clear how that information would be rated and evaluated by DHS.

I am proud of our Blue Plus team. After getting completely shut out in 2013, it took the state’s feedback to heart and got to work. In the intervening two years, Blue Plus staffers had face-to-face conversations with local officials in 65 counties. They listened. They asked questions. They changed the way Blue Plus went about its business. Ultimately, they detailed those changes in a 2015 proposal that was selected as a winner by the state.

Unfortunately, some organizations that did not meet the state’s expectations are pursuing legal and other options to try to reopen the process. Most people would agree that it is not in the best interest of the public or the programs to change the rules after the fact to accommodate a losing bidder. Blue Cross strongly agrees.

On Sept. 3, a Ramsey County district judge denied one company’s motion to halt the transition of enrollees to the selected plans. While the judge scheduled a trial in November, the court order recognized how overturning the competitive bidding results would be challenging for a number of reasons, including the state’s process being transparent and fair; the high quality of the successful bidders, and the expectation of approximately $450 million in cost savings to taxpayers.

Competitive bidding is the new reality for managed-care organizations in our state. It requires all managed-care organizations to continually evaluate their strengths and opportunities to become better and to show why we should be given the responsibility of administering these important public health programs. It’s why I felt compelled to address the issue and set the record straight on why the focus needs to shift from rehashing the selection process to the responsible oversight needed for the changeover in coverage that will soon be taking place.

As the health plan with the broadest coverage of members and communities throughout Minnesota, Blue Cross and Blue Plus has the expertise and experience to work with the DHS to ensure a successful transition for Minnesotans covered by these programs. We have trained staff, programs and services to meet the needs of diverse communities, such as transportation to and from doctor appointments and translation services, among others. Most of all, our dedicated Blue team members share a passion to improve the health and health care of all Minnesotans.


Michael Guyette is president and chief executive officer of Blue Cross and Blue Shield of Minnesota.