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On Feb. 8, health care providers, lobbyists and other interested parties packed a meeting of the House Health and Human Services Finance Committee to overflowing. The occasion was an informational hearing on the seemingly mundane topic of health maintenance organization accountability, and the chief reason for the standing-room-only crowd was the appearance of Dave Feinwachs, the former Minnesota Hospital Association general counsel turned HMO critic.

HMO reform turns into a bandwagon

 Peter Bartz-Gallagher)

Rep. Steve Gottwalt, chairman of the Health and Human Services Reform Committee, says the Department of Human Services has been part of the health care problem. “When all you do is ask for a mountain of data and you have no way to mine it or use it to give any meaningful information to consumers and the state of Minnesota on behalf of taxpayers, there is a problem,” he said. (Staff photo: Peter Bartz-Gallagher)

Numerous bills will seek to improve accountability, change approach

On Feb. 8, health care providers, lobbyists and other interested parties packed a meeting of the House Health and Human Services Finance Committee to overflowing. The occasion was an informational hearing on the seemingly mundane topic of health maintenance organization accountability, and the chief reason for the standing-room-only crowd was the appearance of Dave Feinwachs, the former Minnesota Hospital Association general counsel turned HMO critic.

His point: The HMOs provide no comprehensible accounting for how they use state dollars or how much they make in administering state health services, and that should alarm lawmakers. For 90 minutes, representatives from the Minnesota Department of Human Services and the state’s HMOs answered pointed questions about the accountability and transparency of roughly $6 billion per biennium that’s funneled to the state’s seven HMOs. Those funds are used to provide medical coverage to more than 500,000 of the state’s poorest residents.

Ghita Worcester, senior vice president for public affairs and marketing at UCare, one of the HMOs, explained that the health plans are required to file more than 200 reports with various government agencies each year. “We are open to submitting different information,” Worcester told the committee. “The problem may be that it’s not easy to find in one place where all the information is available.”

As evidenced by the packed hearing, HMO accountability and transparency have become a topic of keen interest at the Capitol. In the coming weeks, numerous bills are expected to be introduced – by both Republicans and Democrats – dealing with the subject. Department of Human Services Commissioner Lucinda Jesson penned an op-ed piece in the Star Tribune this week calling for greater HMO transparency.

“We should be able to generate a readily understandable record of the dollars spent and outcomes achieved by health plans funded by our tax dollars,” Jesson wrote. “Achieving this transparency will be a priority for the Department of Human Services this year.”

Rep. Steve Gottwalt, R-St. Cloud, chairman of the Health and Human Services Reform Committee, says that in the past the Department of Human Services has been part of the problem. “When all you do is ask for a mountain of data and you have no way to mine it or use it to give any meaningful information to consumers and the state of Minnesota on behalf of taxpayers, there is a problem,” Gottwalt said. “I think we need to look at what we are asking the health plans to report. … I think we have to revisit all of those reports and say, ‘OK, which ones do we need and why do we need them?'”

For two decades, the HMOs have operated largely without serious scrutiny under the belief that they are able to lower the cost of providing care to individuals enrolled in the state’s public health care programs. But as costs for the managed care programs have continued to rise steadily – by roughly 7 percent from the 2008-09 budget to 2010-11 – and with the state staring down a $6.2 billion budget deficit, legislators are now asking hard questions about whether the state is receiving an adequate return on its investment.

“HMOs have really been a sacred cow for 20 years,” said one veteran health care lobbyist, speaking on condition of anonymity. “There are really no sacred cows [now].”

Among the proposals relating to HMOs being discussed at the Capitol:

  • Rep. Glenn Gruenhagen, R-Glencoe, has introduced a bill that would force HMOs to increase payments to health care providers by 15 percent. The proposal would also require the health plans to adhere to generally accepted accounting principles (GAAP). “I want to force people to come to the table and discuss this issue,” said Gruenhagen, a freshman who sits on the Health Care and Human Services Reform Committee. “One of the ways to do that is to send a message that we’re going to increase compensation to the doctors and hospitals if we don’t get full transparency in a way that’s understandable to the average person.”
  • Sen. John Marty, DFL-Roseville, a persistent critic of the health plans, intends to introduce legislation as soon as this week that would place a moratorium on adding additional individuals to their rolls. In addition, Marty expects the bill to mandate an outside, independent audit of how the money is currently being spent and require that competitive bidding be used in the future. “If you have a bank that’s under investigation, you don’t put more money into the bank,” Marty said.
  • Rep. Larry Hosch, DFL-St. Joseph, intends to roll out a series of proposals on Thursday aimed at bolstering transparency, accountability and financial stability for HMOs. Although Hosch declined to offer specific details on the legislation, he indicated that it will include a revamping of reporting requirements so that it’s clearer where the money goes. “I fully expect what gets introduced on Thursday to be a starting point and not an ending point,” said Hosch, who sits on the House’s two health care committees.

Indeed, other key legislators – including House Taxes chair Greg Davids, R-Preston, and House Health and Human Services Finance chair Jim Abeler, R-Anoka – have indicated strong interest in scrutinizing HMO finances. Abeler, in particular, who is a chiropractor and has had firsthand dealings with the health plans, is keen to look at their financial practices.

HMO officials insist that they are not resistant to changes that would make their practices more transparent. Eileen Smith, director of communications and public relations for the Minnesota Council of Health Plans, an umbrella group for the seven HMOs, says that they are open to outside audits or revamped reporting requirements. “Our position is, and has been, if this isn’t the best value for the state the way we’re doing this, if there are other models out there that would be better for Minnesota, then we need to know that,” Smith said. “We have never been against looking at what else would work.”

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One comment

  1. Thats nearly $6000 per “poorer” person per year. I think that transparency is overdue!

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