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The Minnesota Department of Human Services provides Minnesotans with a variety of services intended to help people live as independently as possible.

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State announces new way to pay for quality health care

Human Services Commissioner Lucinda Jesson, left, and Gov. Mark Dayton, right, announce a state partnership with six health care providers to test a new payment model rewarding quality and outcomes Friday, Feb. 1, at the Capitol.

Gov. Mark Dayton and Human Services Commissioner Lucinda Jesson recently announced a new reform initiative that will provide better health care for 100,000 Minnesotans and save Minnesota’s Medicaid program approximately $90 million over the next three years.

The Minnesota Department of Human Services (DHS) is partnering with six major health care providers to test a new payment model that prioritizes quality, preventive care and rewards providers for achieving mutually-agreed upon health goals.

Rather than pay providers for the volume of care they deliver, the new payment system offers financial incentives for reducing the total cost of care for Medicaid enrollees while maintaining or improving the quality of care they receive. Under contracts effective Jan. 1, each provider’s total cost of care will be compared to a target for cost and quality. If quality targets are met, any “shared savings” will be divided between the provider and the state in the first year. In later years, both providers and the state will share the responsibility for any losses as well.

The six health care providers taking part in the new payment system are Children’s Hospitals and Clinics of Minnesota, Essentia Health, CentraCare Health System, North Memorial Health Care, Federally Qualified Health Center Urban Health Network (FUHN), and Northwest Metro Alliance (a partnership between Allina Health and HealthPartners).

The state will continue to work with other providers who may be interested in joining. DHS recently issued a request for proposals from additional providers along with other organizations to join this program.

More information is available in a news release and blog post on the governor’s website.


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