OWATONNA — Steele County will seek mediation with the state after the Minnesota Department of Human Services rejected a proposal to provide health care to South Country Health Alliance.

In the beginning of the year, the Minnesota DHS completed the evaluation process of requests for proposals to provide health care services to eligible recipients of Families and Children and MinnesotaCare in 80 counties. Among those proposals was one from the South Country Health Alliance, which serves 12 counties in southern Minnesota including Steele County, providing seven different programs to some 39,000 enrollees.

But the DHS rejected SCHA’s proposal, which will inhibit the ability to provide healthcare services to eligible recipients of Minnesota Senior Options, Minnesota Senior Care Plus, Families and Children, and MinnesotaCare in 2020.

At the Steele County Board of Commissioners meeting last week, the commissioners unanimously agreed to adopt a resolution to request mediation with DHS to reconsider the proposal from SCHA to provide health care services to the 12 counties. County Administrator Scott Golberg said that at the time of the meeting, several counties who are tied to SCHA had adopted similar resolutions and that the organization’s CEO expected every country to do so.

“This is to get on a mediation docket with the Department of Human Services and the State of Minnestoa,” said Greg Krueger, the board chair. “Apparently we went through this same process about five years ago and the outcome was very favorable. We are assuming it will go the same direction because more counties are involved now.”

Krueger also sits on the joint powers board for SCHA.

In 2015, numerous counties appealed to DHS after the results of the statewide bidding process did not offer contracts to providers, including SHCA, as choices for residents receiving MinnesotaCare or prepaid Medical Assistance plans. A three-member panel with the state expedited mediation to review the bidding process and counties’ data, leading to a modification in the contracts with the two providers.

“That was a partially positive result at that point,” said Leota Lind, the CEO for SCHA. “This is similar, but I think the basis on why they are not rewarding the contracts may be different.”

Lind added that it is difficult to know what differences there are, however, because the DHS did not provide information on why they came to their decision.

“The real challenge is that we need to defend something that we don’t really know what it is we’re defending because we don’t know the basis for the exclusion,” Lind said. “South Country is also not allowed to be a part of the mediation process. The State will be working with our individual counties and their legal representation.”

The severity of the situation remains the same, however, as Lind explained that if DHS does not reverse their decision that SCHA will have to cease operations indefinitely.

“The only contract we would have left in place would be our Special Needs Basic Care program for adults with disabilities, which is small at the moment,” Lind said. “There’s just no way around it. This will result in South Country closing our doors.”

Lind said that at this time two other county-based purchasing plans are also being negatively impacted by the decision of DHS.

“There is a current state statute that clearly identifies that counties have a right to elect and administer health care programs in their counties,” said Lind. “DHS chooses to ignore that statute and uses an administration process to essentially strip counties of that right.”

The resolution adopted by the commissioners on Tuesday stated that the county board objects to selection of participating health plans by DHS. In an accompanied letter from Krueger to DHS, it read that the decision denies Steele County’s statutory right to provide health care services under the County-based purchasing authority found in Minnesota Statute §256B.692.

“I think the over-arching statement is really that the actions being taken by DHS are contrary to state laws that are still in effect,” Lind said. “It is going to bring an end to an innovative and important health care delivery model that has served rural counties really well.”

South Country Health Alliance is a county-based health care purchasing organization based in Owatonna. The organization currently contracts with the following counties: Brown, Dodge, Freeborn, Goodhue, Kanabec, Morrison, Sibley, Steele, Todd, Wabasha, Wadena, and Waseca.

On top of the 39,000 enrollees that would have to change to a different health plan, Lind said that it will result in the loss of 83 jobs and potentially impact some of the physicians that are contracted to work in each of SCHA’s member counties.

“There will be an economic impact from this. It’s not only South Country that is being affected this time,” Lind added. “It is in direct conflict with the desire and needs and rights of these counties.”

Lind expects the mediation process with the State to take place in September.

Reach Reporter Annie Granlund at 444-2378 or follow her on Twitter @OPPAnnie.

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