ST. PAUL, Minn. (AP) — Gov. Mark Dayton toughened his stance toward health plans that manage care for subsidized health programs on Wednesday, ordering competitive bidding for state contracts and a new level of financial disclosure.

The Democratic governor directed state agencies to audit the plans and produce a yearly report detailing their finances. His administration will launch a website to showcase financial information about the plans, due to go live next week. Dayton is seeking to save on $3 billion worth of state contracts with health plans that manage care for more than 500,000 poor patients.

Human Services Commissioner Lucinda Jesson wouldn’t quantify how much savings competitive bids could yield, but said it would be significant. She said past contracts were renewed based on past business, but that will change for next year’s contracts in the Twin Cities market with a new bidding process that kicks off this month.

Dayton and Jesson also are seeking to recover excess reserves from health plans that do business with the state, an effort the commissioner said would be strengthened by the administration’s latest moves.

“They have to adjust to a new reality,” Jesson said in an interview.

A spokeswoman for the Minnesota Council of Health Plans had no immediate comment.

A release from Dayton’s office said health plan contracts went “largely unchecked” under Republican former Gov. Tim Pawlenty, now exploring a presidential campaign.

Minnesota’s budget is running $5 billion short over the coming two years, with health and social services programs among the fastest-growing spending items.

Both Dayton and lawmakers have targeted the area for spending reductions, but Republicans who run the Legislature would cut more deeply. Dayton instead is focusing on the nonprofit health plans. His latest executive order comes a week after UCare, a health plan that covers subsidized patients, voluntarily returned $30 million to the state treasury. The donation highlighted concerns about the level of reserves among health plans that do business with the state.

Jesson said she is negotiating with the other plans, whose contracts run through the end of the year. Health plans are due to file annual reports with the state Health Department on April 1, giving a fresh look at their reserves.

The Department of Human Services will collect bids for managed care contracts in June to start negotiations for 2012 contracts in the Twin Cities, the state’s most competitive health care market. Health plans don’t have an inside track — Jesson said her agency is ready to consider proposals from hospitals, clinics, counties or some combination thereof.

“How much we can lower costs, I think the market will tell us,” Jesson said. “But we haven’t had the market in there before, so this really is a fundamental shift.”

Meanwhile, the Department of Commerce will audit the health plans, probing more deeply into their finances than past state reviews of financial documents supplied by the organizations. The website on health plans will collect information the state has about the plans, making it accessible to policymakers and the public.

Dayton’s office also announced that the Human Services Department will bids for pilot health care projects focused on quality and efficiency. Last year’s Democratic-controlled Legislature authorized the demonstration projects.

Now in the minority, Democratic lawmakers cheered the administration’s moves.

“This is what real reform looks like,” said Rep. Larry Hosch, DFL-St. Joseph.

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

Comments (15)
  1. Corey says:

    Good for him! It’s about time someone exposes what is going on

    1. Victim Du Jour says:

      I think the Department of health and Human services should have to disclose what they are spending so much money on.

      Greedy Tax hogs!

  2. David J. Conklin says:

    And the GOP will scream that we should “get the gov’t off our backs”!

  3. econ says:

    Normally I’d say get off our backs, but these are all not for profit entities who choose to enter into these contracts. More than anything it will force an out of touch democrat to become educated on how these companies work. Some years profitable, some years not.

    1. Earl says:

      I have seen a few of the non profits. Hospitals are non profit. Interesting how they have all built new facilities in the last few years. An HMO is not for profit. I have been in home care agencies that have some pretty fancy headquarters. I have been in the offices of a couple of other places, also fancy.

      1. econ says:

        Sure but let me show you the new mega-expensive library in Maple Grove recently completed to replace the whopping, existing 15 year old one and take a walk to the new downtown library and its over the top luxurious appointments. 50+ foot ceilings, marble everything all to satisfy the homeless as their daily hang out. The problems are many and to me the HMO focus is simply a red herring. I don’t begrudge PRIVATE industry for any of their success. If they want to spend it on fancy buildings that is just fine with me. What will we all say the years these HMO’s lose their shirts with bad claims experience?

  4. Lonnie says:

    Finally, make them open u their books completly and let the people see the truth.

  5. Julie says:

    Good for Dayton. We need to have more audits of the plans and an open bidding process.

  6. Arne says:

    Mr Dayton has finally found his calling…GOVERNOR OF MINNESOTA

  7. Dave Campbell says:

    It’s just nice that we finally have a governor! We had been without one for the last eight years.

  8. Murph says:

    Timmy would be shivering in fear of offending the rich CEO’s! I heard he made children prove they were from a Republican family before putting single jelly bean in their Halloween bag! The DEM’s kids? ZIPPO ,they got nothing ! That’s your Tim,a real conservative hero!

    1. RIII says:

      I heard he juggles Democrat kittens in his garage.

  9. Kevin says:

    Hopefully the audit will look at the amount of money Medica sends to UnitedHealthCare for the so called processing of claims. Medica is used as the “non-profit” front company of UHC.

  10. Well no duh! Take this and now pass it along to EVERYTHING done with or by the state. We would get some nice checks from the state so we could all go on vaction for a week! The people of this state are not stupid. The people of this state are sick of hearing we are broke and we have to pay (fix it). Its time this action is felt from top (Mr. Dayton) to bottom (Ms. Techer). Everyone that has anything to do with the state needs monthly yearly audits and proof for every penny used. Enough is enough! Please please can we have leaders in office and not leechers! How great and friendly will this state be when that happens! 🙂 I hope I live to see that day. I will kiss the ground out of joy. Sand thing is this should have never gotten out of control like it has. :/ I have my fingers crossed though!