Marty introduces bill overhauling HMO oversight

Sen. John Marty has introduced legislation that would prohibit the state from enrolling any more Medicaid recipients into managed care programs after March 1. Instead the Department of Human Services would be required to cover the individuals directly.

Marty has persistently criticized the state’s HMOs — which receive roughly $3 billion each year to provide coverage for more than 500,000 individuals — for lacking accountability and transparency. The Roseville DFLer’s bill lays out five other proposed changes to HMO governance:

• Competitive bidding: When the current health plan contracts expire, DHS would be required to hold a competitive bidding process for the 13-county metro area. Two managed-care organizations would then be picked to receive the state’s business.
• Accounting standards: HMOs would be required to utilize Generally Accepted Accounting Principles. Currently most of the health plans adhere to accounting standards that are crafted for the insurance industry. Marty’s bill also explicitly defines the terms “medical costs” and “administrative costs.”
• Oversight: The Legislative Auditor’s office would be required to “regularly” audit the health plans. No explicit time-frame is laid out.
• Public records: HMOs would be subject to the state’s Data Practices Act, which determines what records are public.
• Contracts: DHS would be required to cover only “reasonable and appropriate” costs accrued by the health plans. This language was spurred by a fiscal note issued last year in which the agency stated that any financial penalties handed down to the health plans would simply be added onto what they bill the state.

Marty’s bill does not have a House sponsor. Here’s a copy of the bill.