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A battle is looming over Health Plans’ secret price data

The issue pertains to four HMOs, also known as Health Plans, which are Blue Cross/Blue Shield (Blue Plus division), Medica, HealthPartners, and UCare.

Buddy Robinson

Amid the debates of the 2014 session of the Minnesota Legislature, one item flew below the media’s radar even though hundreds of millions of dollars are at stake. It’s a straightforward question: Should HMOs that contract with the state of Minnesota to deliver Medical Assistance, MinnesotaCare and similar programs have to disclose what they pay hospitals and doctors? The issue pertains to four HMOs, also known as Health Plans, which are Blue Cross/Blue Shield (Blue Plus division), Medica, HealthPartners, and UCare.

Near the session’s close, the topic broke into a fierce debate in the House of Representatives, where a simple bill (HF 2167/SF 1770) was wending its way. In its original form, it required that government contractors have to comply with data disclosure laws, whether their contracts specify it or not.

This is a no-brainer to most people: Of course we should know what services our tax dollars buy, and how much the contractors keep for themselves. However, Minnesota has a tradition, begun in the Gov. Tim Pawlenty years, of not getting this information from the HMOs, not even for the eyes-only of state officials. Call it our own version of “don’t ask, don’t tell.”  After all, these HMOs are nonprofits, so we can trust them to be honest, efficient, and operate with a true public purpose – or so went the conventional wisdom.

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At an April 25 hearing, the lobbyist for the Minnesota Council of Health Plans testified that if the HMOs had to disclose what they pay hospitals and doctors, the HMOs would be forced to pay them more money, and in turn the state would have to pay the HMOs more. However, the agency that pays them —  the Dept. of Human Services (DHS) — did not back up their claim, and was neutral on the bill. The Greater Minnesota Health Care Coalition (GMHCC), a health care consumers’ group, sent a rebuttal of the HMOs’ arguments to the legislators.

Nevertheless, the HMOs, who according to state records spend over a million dollars annually lobbying the Legislature, used their extensive clout to pressure the legislators into conceding a one-year delay for disclosure for the HMOs. Despite strong statements against the secret prices by Reps. John Lesch (the bill’s author), Tina Liebling, Carolyn Laine and David Bly, the bill was passed and signed into law with the delay for disclosing the HMOs’ data.

The debate is far from over. The stage is now set for a thorough rematch in the 2015 session. The burden of proof is on the HMOs, who want a permanent exemption from disclosure. However, a growing number of lawmakers no longer blindly trust what they say. DHS might even decide on its own to insist on a data disclosure clause in the contracts it signs with the HMOs, worth billions of dollars a year.

In setting the HMO rates, DHS still doesn’t use the actual payments to hospitals and doctors. We know from the 2013 Segal report, and GMHCC’s research, that the HMOs could have been inflating their price data. If they were, or are, they would be wasting huge amounts of taxpayer dollars. The secret price data also affects the insurance policy rates paid by individuals, families and businesses. Those premiums might be inflated as well.

GMHCC has pursued this issue since 2007. We’ve seen gradual progress in awareness and state action for accountability and transparency. We urged the Dayton administration to crack down on overpayments. A number of steps have been taken, although more must be done.

It behooves everyone – taxpayers, program recipients, medical professionals, business owners, and insurance ratepayers – to keep aware of this issue, and ask your elected officials a question: Where do you stand on secret HMO prices? 

Buddy Robinson is staff director of the Minnesota Citizens Federation NE, and Co-Coordinator of the Greater Minnesota Health Care Coalition. These grass roots organizations work for the economic interest of low- and middle-income people, and especially  for affordable health care for all.


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