Medica is set to return to a big contract in the state’s public health insurance programs more than two years after the Minnetonka-based HMO abandoned the business.
The state’s Department of Social Services (DHS) says Medica is one of four HMOs that are finalists for a managed care contract for adults and children in the state’s Medicaid and MinnesotaCare programs.
Medica in 2017 abandoned a statewide contract for these beneficiaries due to financial losses, and the move prompted about 300,000 people to switch health care plans. The contract under negotiation covers approximately 80 counties in greater Minnesota, but not the Twin Cities metro.
“It’s important to remember that not all registrants will have to change plans, but can choose to change plans if they choose,” DHS said in a statement to the Star Tribune. “The contracting process is underway. The final award of contracts will be announced when the contracts are executed and submitted to the [federal government] in October.”
In a statement, Medica noted that the HMO currently serves as a managed care organization for the elderly in two smaller health care programs.
For decades, Minnesota has hired HMOs to serve as managed care organizations under the Prepaid Medical Assistance Program (PMAP), which is part of the state’s Medicaid program, as well as MinnesotaCare. Medicaid provides coverage to many groups, including Minnesotans living in poverty; MinnesotaCare covers a slightly higher income group of residents whose employers do not provide employment-based health insurance.
In 2018, Eagan-based Blue Cross and Blue Shield of Minnesota HMOs, Bloomington-based HealthPartners, and Minneapolis-based UCare were the largest managed care organizations in PMAP and MinnesotaCare. A Star Tribune analysis of state-filed documents shows that HMOs for 2018 collectively reported about $ 69.2 million in net income out of about $ 4 billion in program income.
After announcing in late 2016 that it would abandon the large state contract, Medica filed a lawsuit against DHS the following spring, alleging that competing health plans were given better deals to serve as HMOs in public programs. . A judge then dismissed the suit.
DHS says the new contract will specify which HMOs will manage the care of approximately 364,000 people in the PMAP and MinnesotaCare programs. A county-based buying group called PrimeWest is also a finalist to manage care in health insurance programs.