Minnesota managed care providers to return profit back to the state

Minnesota Governor Mark Dayton struck a unique agreement with health care providers in his state today. Under the terms of this agreement BlueCross BlueShield, HealthPartners, Medica, and UCare will place a voluntary 1% cap on profits for 2011 managed care contracts. The one-time cap will keep earnings at 1% of revenue and return any amount over that 1% to the state’s General and Health Care Access Funds in April, 2012 to help manage the state budget.

As CivSource noted last month, the Governor instituted competitive bidding for the managed care contracts in the state through an executive order. That bidding process will go into effect in 2012 and the Governor hopes that the process will result in significant cost savings for Minnesota. At the time of the Order, the Governor strongly encouraged health care providers to contribute excess profits back to the state, this agreement will make that hope into a reality.

BlueCross BlueShield, HealthPartners, Medica, and UCare reported a collective profit of 3.8% on Minnesota’s managed care contracts in 2010. This represented an increase from 2.6% in 2009. UCare has already announced it will provide a one-time, $30 million contribution to the state in 2011.

“I applaud UCare, HealthPartners, Medica, and BlueCross BlueShield for their civic responsibility in recognizing the State’s dire financial condition, and helping to reduce our rising health care costs,” said Governor Dayton.

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