PO Box 64983 St. Paul, MN 55164-0983 An equal opportunity and veteran-friendly employer
At all times, we must ensure fairness in our process. The offers made by Medica, including reducing your
service area to regions or counties where Medica believes the rates are more favorable, are unfair to other
companies and unfair to our enrollees. The counties Medica wishes to withdraw from are in large measure
counties for which the rate is based on the bid Medica submitted. This withdrawal is a similar tactic that Medica
employed last year during the contract negotiations for Special Needs Basic Care (SNBC). Without sufficient
data to support what was driving reported high cost cases or why the rates offered were not sufficient, Medica
removed themselves from several counties, leaving those counties without a SNBC plan which necessitated a
mid-year procurement. Medica was able to accomplish their aim of leaving the counties they wanted to leave,
while other plans had to step in to help serve this vulnerable disabled population. DHS will not conduct a
special procurement in this case and we are hopeful that once again the other health plans will be willing to step
in to ensure our enrollees have options available.
Prior to receipt of Medicas non-renewal letter, Medica has only provided one proposal in writing where
Medica asked for an increase of 13.9% on PMAP and 8.5% on MinnesotaCare. In terms of the most recent
proposals in your letter of non-renewal dated November 30, 2016, these suggestions would also violate the
terms of the 2016 competitive procurement. DHS cannot offer Medica another plans bid rate or allow Medica
to alter their service area after the fact. This would be contrary to the requirements of the request for proposals
that all plans followed and would be inconsistent with the results and scores of the procurement. Moreover, this
would not be fair to other plans who prepared and submitted technical responses and competitive bids in good
faith or to the counties who participated in scoring the plan responses. DHS cannot increase the rates without
credible data and justification to do so and cannot change the structure or nature of the risk-based contract.
Finally, as negotiations took place throughout the last several months, Medica failed to acknowledge in any way
that they have not implemented sufficient efficiencies to help manage utilization and cost or that you would
going forward. The bids submitted by plans all anticipated efficiencies that each plan expected to accomplish,
consistent with their submitted price bid.
In order to comply with its obligation to provide notice of a MCO termination or service area reduction within
five working days, DHS will be notifying the other MCOs in writing, Friday, December 2, 2016 of Medicas
notice of non-renewal which results in a service area reduction.
Upon notification to the other MCOs, DHS will begin the process to plan for the transition of Medicas
enrollees covered under the Families and Children Contract and will be working directly with Medica on the
notification to enrollees, transfer of enrollee records and data and any other information necessary to ensure
continuity of care.
If you have any questions regarding the information contained in this letter, you may contact me directly.
Sincerely,
Marie Zimmerman
State Medicaid Director