ST. PAUL -- Minnesota officials are delaying updating new contracts for public health programs worth as much as $5 billion a year after some local leaders complained about the selection process and a current provider sued the state.
The decision came after a Ramsey County district judge issued a temporary restraining order Aug. 30 putting the brakes on the state’s efforts to finalize new provider contracts in 80 counties outside the Twin Cities metro. The state plans to renew the current contracts for another year.
“This option is the least disruptive to enrollees and ensures we remain in compliance with federal law,” said Jodi Harpstead, human services commissioner. “It also gives us an opportunity to work with the Legislature to clarify aspects of the contracting process before we issue (a request for proposal) again.”
The South Country Health Alliance filed a lawsuit against the state after it was not chosen as a provider for the next round of five-year contracts. Officials from rural counties across the state have also criticized the selection process for diminishing the influence of local leaders in picking providers.
“The county role should be absolutely fundamental in this process,” Rick Anderson, a Lyon County commissioner, told state lawmakers at a special hearing Wednesday. “Counties have a front-row seat into how well these plans serve people locally and how well their proposals reflect local needs.”
Renegotiating current deals
About 1.2 million Minnesotans rely on public health programs like MinnesotaCare and medical assistance. State and federal laws require contracts with providers to be competitively bid at least every five years.
Care for about 400,000 people, including seniors and children and families across 80 counties outside the metro, was being negotiated until Tuesday’s decision to halt the process. Services for children and families in metro counties are scheduled for 2020 and could also be delayed.
In announcing it had canceled its request for new contract proposals, the state said it will instead try to negotiate the renewal of the current contracts for next year. The ruling had made it impossible to complete new contracts in time to avoid disruptions in services to Minnesotans, the state said.
Counties supposed to have a say
State rules require the departments of Health and Human Services as well as local leaders to develop criteria for health providers and then grade the proposals submitted. The commissioner of human services has the final say, but counties can appeal those decisions by requesting mediation.
Local leaders told lawmakers this week that the selection process has become less transparent in recent years and they feel local input has been largely ignored. Many rural counties have teamed up to help them tailor services to local needs, and they now worry those efforts will be for naught.
“There is a shrinking county voice in this process,” said Jane Hardwick, executive director of the Minnesota Prairie Alliance, a collaborative that provides social services in Dodge, Steel and Waseca counties.
Bidding process has saved $1 billion
But officials in the Department of Human Services say stricter federal guidelines and state rules limit transparency during the provider selection process and increasingly require tougher grading of possible providers.
Julie Marquardt, director of health care purchasing and service delivery, told lawmakers that competitive bidding and other reforms to the provider selection process have saved the state more than $1 billion. She acknowledged the state’s process for picking public health care providers was complex and could be improved.
Updating the contracting process is on a long list of issues lawmakers hope to address when they reconvene in February. The Department of Human Services is one of the state’s largest agencies and has been hit recently by allegations of fraud, retaliation against whistleblowers and resignations of top staff.