UCare opposes Medica lawsuit in public health insurance programs

Minneapolis-based UCare is asking a Ramsey County court to dismiss a lawsuit from Minnetonka-based Medica to let the rival HMO bid again on a large state contract to manage care in public programs.

In a court filing Friday, UCare argues against Medica's demand for a new state contract procurement in 2018 or 2019, saying the process could disrupt coverage once again for hundreds of thousands of enrollees in the state ­programs.

Plus, UCare says it has invested significant resources to expand its enrollment in the programs as of May 1, at which point Medica stopped serving as a managed care organization for most in the programs.

Medica said late last year it was dropping the state contract at the end of April because the HMO was losing too much money.

"Medica won a 2016 contract through a competitive bidding procurement by submitting an economically imprudent bid that it came to regret," UCare said in its ­filing. "Medica exercised its right not to renew its 2016 contract ... resulting in a statewide crisis for 320,000 low-income persons who would need health care coverage."

In March, Medica sued the state Department of Human Services (DHS) alleging that competing health plans were offered better deals to manage care in the programs. The HMO argued that DHS did not comply with state procurement laws when hiring UCare and other health plans to expand their roles in the programs this month.

DHS countered in a March filing that Medica was trying manipulate the state into awarding the HMO a new contract with more favorable terms.

DHS issued a statement saying: "UCare's filing highlights the many flaws in Medica's legal claims, as well as the self-interest motivating Medica's actions."

The legal fight focuses on the "families and children" contract in the public programs, which covers the vast majority of enrollees in the Medicaid and MinnesotaCare programs. For years, the state has hired HMOs to manage care for program enrollees, but has been switching to a competitive bidding program following concerns that HMOs made excessive profits.

UCare was the largest HMO in the programs in 2015, but saw its roll downsized significantly for 2016 with results of the first statewide competitive bid.

"By intervening in this case, UCare seeks to protect our Medicaid and MinnesotaCare members from further disruptions," UCare said in a statement Friday.

For 2016, roughly 300,000 UCare enrollees had to switch to new health plans, with many landing at Medica and the HMO for Blue Cross and Blue Shield of Minnesota. Between April and May, UCare's enrollment from the families and children contract grew from 53,702 people to 234,453.

Christopher Snowbeck • 612-673-4744