Minnesota’s public health care programs are cost-intensive enterprises, utilizing roughly $3 billion in state funds on a bi-annual basis. These monies flow from the state’s Department of Human Services (DHS), to non-profit Health Maintenance Organizations (HMOs), and finally to health care providers for patient care.
Just how these funds are utilized by the state – and by the HMOs that ultimately distribute them – has been the subject of ongoing controversy since 2010. At that time, David Feinwachs (then counsel for the Minnesota Hospital Association) began raising questions about HMO administration of the state’s public plans, and asked whether participating HMOs were unduly retaining public funds. Since then, Public Record Media has followed this issue via a series of public record requests, and has produced multiple stories based on details disclosed in government documents.
Health care program audit required
In 2012, the Minnesota Legislature passed a law requiring a bi-annual, third-party audit of the state’s “managed care” public health programs. Passage of the law was premised on concerns that state agencies were not exercising adequate oversight of the public care system, nor of the private, non-profit HMOs that largely administer it. The authors of the law stipulated that an independent, outside firm must conduct the bi-annual audit, and they charged the Office of the Legislative Auditor (OLA) with hiring the entity.
The concerns raised during the 2012 legislative session also spurred DHS to hire a separate, outside firm to undertake a retroactive evaluation of the “rate setting” process for the state’s public health care programs. Rate setting is the process whereby DHS establishes the block payments to be made to HMOs for public program services.
The Segal Company – the firm retained by DHS – issued a report in March of 2013 that largely affirmed the criticisms leveled by David Feinwachs and others – including claims that the programs had been insufficiently overseen by the state, and that HMOs were retaining monies above targeted amounts.
Audit slated to begin with 2014 year
The 2012 law specified that the initial public program audit would evaluate the 2014 program year. With that in mind, PRM filed a data request to seek out OLA’s requests for proposals (RFPs) and contracts pertaining to the upcoming audit. PRM sought the data to discover the identity and qualifications of the firms that proposed to do the audit work, and also to learn about any final contract terms.
OLA produces some documents, denies most others
Shortly after PRM submitted its request, OLA produced its RFP for the audit job, but withheld all data regarding responses to that RFP. OLA also withheld any signed contracts that stemmed from the RFP.
OLA relied on Minnesota Statute 3.979 – a law governing “data related to an audit” – to withhold the RFP and contract data. However, PRM maintained that the bulk of such data was classified as “public” under other provisions of state law, and continued to seek it from OLA. After several unreturned letters and calls, PRM sought a data practices advisory opinion on the matter from the state’s Department of Administration. An office within that department (IPAD) routinely issues opinions on data practices matters, and took up the issue for review.
Commissioner: OLA must provide appropriate access to data
Minnesota’s Commissioner of Administration issued his advisory opinion on September 17, 2014. The opinion held that much of the RFP and contract data sought by PRM was indeed public. The Commissioner further noted that OLA must provide “appropriate access” to such data for the purposes of inspection and the creation of copies. PRM has since mailed a letter to OLA seeking a date to examine the data.
Given the magnitude and importance of the upcoming health program audit, PRM believes that the public has a right to know the identity and qualifications of any vendors contracted to perform the audit work – particularly before the work itself commences.
Watch for additional updates, including details about any parties who submitted bids to conduct the state’s bi-annual managed care audit.