Minnesota Department of Human Services agrees on treatment of $30 million health plan contribution

Minnesota will treat donation as part of its agreement with plans to cap 2011 profits; will split with federal government

Contact:
Jeremy Drucker
(651) 431-2920

PDF version of news release

Today the Minnesota Department of Human Services (DHS) came to an agreement with the Center for Medicare & Medicaid Services (CMS) to treat the 2011 UCare contribution of $30 million as part of the 1 percent cap on excess profits negotiated by the state. 

The discussion between DHS and CMS on how to handle the funds was clarified by the $73 million give-back by health plans earlier this month—a result of the Gov. Mark Dayton Administration’s negotiation of a voluntary, 1 percent cap on 2011 managed care profits. Since, absent the 2011 donation, UCare’s return under the voluntary cap agreement would have been an additional $30 million, DHS agreed the original donation should be treated as if it were part of that later agreement and shared with the federal government. When added to the $73 million, the total amount recouped through the voluntary caps is more than $100 million.

“We’re satisfied with this resolution to treat last March’s UCare donation as excessive profit and part of the voluntary caps on managed care profits negotiated by the Dayton Administration,” said DHS Commissioner Lucinda Jesson. “We are pleased that the Dayton Administration has been able to recover over $100 million in profits from the 2011 managed care contracts negotiated by the previous administration.”

Since 2011, taxpayers have been saved over $600 million through managed care reforms, including transforming the way Minnesota pays for health care by implementing a new competitive bidding process, and recoveries of monies from the capped 2011 contracts.

For more information, view a FAQ about the UCare contribution (PDF) and a letter sent by DHS to CMS (PDF).