Due to health care unaffordability, much of Health Care for All Minnesota’s mission is working with constituents and legislators to reduce health care spending, beginning with the public programs of Medical Assistance and MinnesotaCare.
The Patient Centered Care (PCC) bill, which had its first hearing during the recently completed legislative session, was designed to do just that. Its urgency now is driven by Federal funding cuts to those public programs. Further action is expected next session. Read more about the bill’s background and transparency measures.
Background: Legislation outsourced Medical Assistance and MinnesotaCare programs from the Department of Human Services to HMO middlemen in the 1990s, purportedly to reduce the spending of Medicaid money on the programs. However, there’s been little or no evidence of spending reduction by the HMOs since then.
The historic failure of MCOs to reduce the spending of Medicaid dollars necessitated Sen. John Marty and Rep. Tina Liebling to author and introduce the Patient Centered Care bill [SF 3612, HF 3476] that replaces the HMOs with a state administered fee-for-service (direct payment) system supported by the Administrative Services Organizations (ASOs). They are not insurance companies and only perform administrative functions without bearing financial risk.
Direct payment to the providers, without funneling of Medicaid dollars through the HMO middlemen, will save about $1 billion annually over ten years, which will help alleviate the $2 billion annual cuts to Minnesota Medicaid under the federal big “ugly” law (HR 1) signed by the president on July 4, 2025.
What’s the sense of saving Medicaid dollars if spending by the state isn’t transparent?
The $1 billion annual savings by enactment of the PCC bill will be fruitless without stipulation in the bill that ensures transparent spending by the state. Accordingly, public ownership and accountability of Medicaid data will be restored by the bill. According to the bill’s language, its transparency provision requires the Administrative Services Organizations’ contracts to comply with public data laws and prohibits private entities from claiming proprietary rights over data generated through publicly funded programs. It directs the Department of Human Services (DHS) to create a public data dashboard with quarterly updates and an annual report summarizing utilization trends and disparities.
Furthermore, the DHS Office of the Inspector General shall have full access to records and data of the ASOs to audit procedures of the patient-centered care program in order to investigate and prevent fraud.
A 2025 Families USA study verified the lack of transparency and accountability nationwide by HMOs managing state Medicaid programs due to
- government agencies and HMOs having few requirements to publicly report details of the HMOs impact on costs and quality of care; and
- state and federal governments lacking oversight to determine whether HMOs efficiently deliver and coordinate quality health care services for Medicaid enrollees
This results in limited evidence that HMOs are spending less and improving care. Transparency is essential for the Patient Centered Care bill to make the state a responsible steward of Medicaid money that’s worthy of the public trust.
Don Pylkkanen, Co-Chair, Legislative & Policy Committee
Dave Garibaldi, Co-Chair, Legislative & Policy Committee