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Minnesota health contracts could save state, feds $90 million [Pioneer Press, St. Paul, Minn.]

By Christopher Snowbeck, Pioneer Press, St. Paul, Minn.
McClatchy-Tribune Information Services

Feb. 01--The state and federal government could share $90 million in savings over three years from a new style of contracts with doctors and hospitals.

Lucinda Jesson, the state's Human Services Commissioner, announced the new contracts during a news conference Friday, Feb. 1, at the state Capitol. The agreements with six health care providers across the state mean that Minnesota is the first state in the country to launch a "Medicaid ACO," Jesson said.

ACO stands for "accountable care organization," a new type of payment relationship established by the federal health care law of 2010 within the Medicare program. In Minnesota, commercial insurers also have been developing ACO-style contracts with health care providers that ask doctors and hospitals to better coordinate care for patients.

If health care providers can provide better care at a lower cost, the contracts let them share some of the savings. In time, the contracts also put doctors at hospitals at financial risk if care costs for a group of patients turn out to be higher than expected.

"This is a fundamental change in the way we do business," said Jesson, whose department runs the state's Medicaid program -- called Medical Assistance -- as well a related health insurance program called MinnesotaCare.

Medicaid provides health insurance for low-income and disabled residents; MinnesotaCare provides coverage for a slightly higher-income group of people who don't get health insurance from their employers.


100,000 people in the state's public health insurance programs are cared for by providers who are subject to the new contracts. They include Children's Hospitals and Clinics of Minnesota; Robbinsdale-based North Memorial Health Care; and a network of federally qualified health care centers.

Overall, the public health insurance programs cover some 800,000 Minnesotans.

In the future, the state expects to sign more ACO-style contracts with doctor and hospital groups, Jesson said. She said the agreements do not limit where patients can obtain care.

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Christopher Snowbeck can be reached at 651-228-5479. Follow him at and


(c)2013 the Pioneer Press (St. Paul, Minn.)

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