South Country Health Alliance to seek state law changes for bidding

Nov. 16--South Country Health Alliance, the county-based system that provides the state's Medicaid and low-income health insurance programs in some of the region's counties, could see long-term declines in its membership as a result of this year's bidding process in which it was an initial loser.

In August, the state Department of Human Services announced bid winners for running the health programs. For most of the county members of the alliance, this added a second plan provider and did not include South Country.

After universal appeal requests from the 11 counties that lost South Country, the department reversed course, replacing one of the other providers with South Country in those 11 counties.

But now, CEO Leota Lind said South Country new enrollees must actively choose services through South Country in Medical Assistance, Minnesota's Medicaid program. If they do not choose for themselves, they will be served through the other provider.

"The other plan will be default in all counties," Lind said. "Our current enrollees will remain enrolled with us if they don't make any changes, so that will make no difference."

But the potential loss of new enrollees could affect South Country's viability for the future. Some enrollees could actively choose Blue Plus or Medica, the other options. And about 15 to 20 percent of new enrollees don't make a choice, pushing them to the default provider and, in this case, away from South Country.

"There is no magic number for the number of enrollees to remain financially viable, but we do expect a decline in the enrollment," Lind said. That decline wouldn't happen immediately Jan. 1, when the new program options take effect, but it would be a slow draw down, she suggested, as new people become eligible for Medical Assistance.

South Country began operation in 2001 as a formation of the counties themselves. It has served Brown, Dodge, Freeborn, Goodhue, Kanabec, Morrison, Sibley, Steele, Todd, Wasbasha, Wadena and Waseca counties.

In June, Medical Assistance enrollees accounted for 82 percent of South Country's membership of 36,637. The next largest, MinnesotaCare -- the state's health insurance program for low-income individuals and families -- accounts for 6 percent, or 2,039 people that South Country serves.

Medical Assistance saw a big jump in population in 2014, and South Country's overall membership likewise jumped from 22,765 to 25,816.

In MinnesotaCare, South Country is the default provider for seven of its counties.

"We may likely see an increase in MinnesotaCare over time, but the numbers are smaller for that product," Lind said.

After the difficulties in the procurement process, Lind said she and others are seeking some clarification in state statute. In one place, the law says counties have the say on the system to be used. In another, the bidding process should be applied and used to decide.

"We are looking at areas where county-based purchasing can be given greater authority and a greater role in the procurement process," Lind said.

That exact language hasn't been worked out yet. But legislators will likely weigh language changes in the spring session.

State Sen. Kathy Sheran, DFL-Mankato, chairwoman of the Health, Human Services and Housing Committee, said she's ready to consider options, though she hasn't seen any yet. "These county-based purchasing systems will be making some suggestions for how they are treated during the bid process."

Follow Nancy Madsen on Twitter @nmadsenmfp.

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