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County closes health care deal with South Country

The Minnesota Department of Human Services selected South Country Health Alliance to become the sole provider of health care services for public clients in Wadena County beginning early next year. SCHA will replace the services of Ucare, Blue Plus and Medica, the county's current managed care organizations.

"With South Country identified as the plan for our area, we feel that we are on the verge of having a very successful locally managed health plan," said Paul Sailer, Wadena County Social Services director.

SCHA and the DHS still need to negotiate a payment rate before the deal is official, Sailer said, but he does not anticipate that will be a problem. The DHS has scheduled meetings with social services staff and local health providers.

"All their actions are telling us this is a done deal," Sailer said.

SCHA is a county-based purchaser of health care services. Working with SCHA instead of a Minneapolis-based health care company will provide better services for Wadena County public health clients, he said. The county began looking into a sole health care provider nearly a decade ago as a way of dealing with the rising cost of health care and providing more locally orientated service, Sailer said.

"With a single health plan managing a larger pot of clients ... it's easier to find efficiencies," he said.

All of the Region Five counties, including Cass, Crow Wing, Morrison and Todd counties, will join the nine other Minnesota counties that are part of SCHA.

The county has been working on obtaining a contract with SCHA since 2004, Sailer said. Former DHS Commissioner Kevin Goodno did not agree with the idea of a sole county managed health care program, however.

"He believed people who were eligible for medical assistance and general assistance medicare should have their choice of health plans," Sailer said. "We believed the eligible public health clients should have a choice of provider."

The previous MCOs only selected a portion of the health care providers in the area to offer services to their clients, Sailer said. For example, some chiropractors were offered contracts with the MCOs and others were not as a cost-saving measure. SCHA will invite all eligible health care providers to contract with them, he said.

"When a person is part of South Country they will have access to as many providers as we know are used by local citizens," he said.

Local health care providers will be reimbursed by SCHA at the same or better rate than the MCOs, Sailer said. "Everyone is trying to come up with reasonable reimbursement where you can provide good quality health care and not lose money doing it," Sailer said.

SCHA has lower administrative costs than the private MCOs that operate in the area, he said. Because its administrative costs are lower, SCHA will have more money to improve the health infrastructure of the local community.

"County health plans have to use [their financial] gain in counties that they work with," he said. "Non-profits based in the Twin Cities do not. Anytime you can spend more money locally it helps the overall quality of the community."

SCHA's 2006 budget was $96 million and Sailer estimates a $196 million budget by 2010 for the alliance, he said.

Sailer estimated that approximately 1,250 people of the 1,447 public clients in Wadena County will be part of SCHA. Some disabled people will stay under the old fee for service arrangement and people under Minnesota Senior Health Options will remain in the plans they have now.

Sailer said it is reasonable for people to question how a local government health plan can operate as well as a large non-profit.

"The answer lies in how successful South Country has been in establishing a very sound funding structure and the quality they've show through the HEDIS report," he said.

The Health Plan Employer Data and Information Set rates managed care plans for comparison by consumers and providers. After operating for only three years, SCHA placed at the top in 10 of 21 categories, Sailer said.

The DHS selected SCHA as part of a competitive requests proposal. The federal government requires a competitive bidding process when a rural county decides to have one health plan, Sailer said. Ucare, Blue Plus and Medica also submitted proposals to the DHS.

SCHA will replace the services of Ucare, Blue Plus and Medica when they leave the county. The MCOs can remain until Jan. 1, 2007, or March 1, 2007. They can legally provide services for 180 days after receiving a written notice of intent to expire services from the state or can voluntarily discontinue their services to allow SCHA to take over by January. UCare and Blue Plus have agreed to discontinue their services by the end of 2006, but Medica has decided to remain until the end of February, according to Sailer.

SCHA requires that Wadena County hire a Care Resource Management Team consisting of one nurse and a half-time social worker, said Karen Nelson, public health director. At the Wadena County Board meeting Tuesday, the board approved Nelson's request to begin recruitment for a full-time public health nurse for the CRMT position effective Nov. 1. The half-time position will be provided through Wadena County Social Services.