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Managed Care Procurement and Contracting Julie Marquardt and PJ Weiner| Purchasing and Service Delivery mn.gov/dhs
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Managed Care Procurement 101.DHS.1.17 - Minnesota Senate

Nov 17, 2021

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Page 1: Managed Care Procurement 101.DHS.1.17 - Minnesota Senate

Managed Care Procurement and Contracting

Julie Marquardt and PJ Weiner| Purchasing and Service Delivery

mn.gov/dhs

Page 2: Managed Care Procurement 101.DHS.1.17 - Minnesota Senate

How Minnesota purchases health care for  enrollees

•DHS processes claims and pays providers directly

Fee for service

• DHS pays managed care organizations (MCOs) to provide benefits to enrollees. MCOs process claims and pay providers.

Managed care organizations

Page 3: Managed Care Procurement 101.DHS.1.17 - Minnesota Senate

Managed care organizations

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The state contracts with managed care organizations to deliver

• Provider networks

• Payment arrangements 

• Care coordination and disease management forcomplex cases

Page 4: Managed Care Procurement 101.DHS.1.17 - Minnesota Senate

About 75 percent of people enrolled in public health care programs are served by managed care 

organizations

Page 5: Managed Care Procurement 101.DHS.1.17 - Minnesota Senate

Who is covered through managed care? 

Families and children 

• Greater Minnesota: 348,780•Metro area: 432,530

Adults with disabilities

• Statewide: 53,527

Seniors

• Statewide: 55,717

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Page 6: Managed Care Procurement 101.DHS.1.17 - Minnesota Senate

1985 1995

DHS begins using MCOs Federal MCO Waiver approved

Minnesota creates MinnesotaCare

History of Managed Care in Minnesota

20111992

Competitive bidding begins

Medicaid expansion to cover adults without children 

20142015

MinnesotaCare converted to a Basic Health Program

Page 7: Managed Care Procurement 101.DHS.1.17 - Minnesota Senate

What is procurement?

• The process used to determine which health plans participate in the Medical Assistance and MinnesotaCare programs

• Health plans respond to a request for proposals (RFP) issued by DHS

• DHS, the Department of Health and counties score the proposals to determine who will be offered a contract 

• Evaluate quality and service delivery 

• May include price components

• Final decision made by DHS commissioner as the single state Medicaid agency

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Page 8: Managed Care Procurement 101.DHS.1.17 - Minnesota Senate

Why re‐procure contracts?

Federal law requires competitive procurement

State law requires re‐procurement every 

five years

The process ensures the highest quality care for the 

best value

Managed care contracts cost more than $5 billion 

annually

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Page 9: Managed Care Procurement 101.DHS.1.17 - Minnesota Senate

Prepaid Medical Assistance Program contracts

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Page 10: Managed Care Procurement 101.DHS.1.17 - Minnesota Senate

MinnesotaCare contracts

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Page 11: Managed Care Procurement 101.DHS.1.17 - Minnesota Senate

Seniors contracts

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Minnesota SeniorCare Plus (MSC+) Minnesota Senior Health Options (MSHO)

Page 12: Managed Care Procurement 101.DHS.1.17 - Minnesota Senate

Special Needs BasicCare contracts

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Page 13: Managed Care Procurement 101.DHS.1.17 - Minnesota Senate

Upcoming procurement schedule

• 2019 procurement for 2020 contracts: Greater Minnesota families and children 

• 2019 procurement for 2020 contracts: Seniors

• 2020 procurement for 2021 contracts: metro area families and children

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Page 14: Managed Care Procurement 101.DHS.1.17 - Minnesota Senate

Changes in landscape that impact upcoming procurement

• Federal managed care regulations finalized in 2016

• Strengthened conflict of interest protections

• Reinforced competitive bidding requirement

• Prohibit states from requiring specific payment rates to providers except under certain limited conditions and subject to measurement and evaluation.

• State law changes in 2017• Minnesota changed state law to allow for‐profit health plans to do business in the state.

• Phasing out certain payments to hospitals that are no longer allowed

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Page 15: Managed Care Procurement 101.DHS.1.17 - Minnesota Senate

Families and Children RFP

• Quality and service delivery proposal has several parts including:

Operational capacity (DHS)

Financial review (DHS/MDH)

Required statements (DHS legal)

County questions (Counties)

State questions (DHS policy)

Quality and program initiatives (DHS)

Network review (MDH and Counties)

• If a price bid is included, it is scored by DHS

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Page 16: Managed Care Procurement 101.DHS.1.17 - Minnesota Senate

Seniors

• Quality and service delivery proposal has several parts including:

Operational capacity (DHS)

Financial review (DHS/MDH)

Required statements (DHS legal)

County questions (Counties)

State questions (DHS policy)

Quality and program initiatives (DHS)

Network review (MDH and Counties)

• No price bid

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Page 17: Managed Care Procurement 101.DHS.1.17 - Minnesota Senate

Tentative procurement timeline

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OCT‐NOV

•Regional county meetings with DHS•Development of RFP

DEC

•County questions due to DHS•Finalize RFP

Early 2019

•Release RFP•Responders conference

April•Proposals due

May‐June•Award letters issued

July•Annual plan contract negotiations begin

Page 18: Managed Care Procurement 101.DHS.1.17 - Minnesota Senate

Questions?

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