Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Healthcare Finance topic
No spam. Unsubscribe anytime.
South Country Health Alliance reports legal win, enrollment growth potential and narrowing losses
Summary
South Country Health Alliance staff told Waseca County commissioners they secured an appellate‑level legal win that could expand membership and described ongoing financial pressures in 2025 driven by high claims and drug costs, while noting midyear rate adjustments and a strong capital surplus.
A representative for South Country Health Alliance presented a multi‑part update to the board, covering strategic priorities, an ongoing legal case with the Department of Human Services (DHS), enrollment projections tied to potential plan conversions, and current financials through August.
On strategy, the speaker said the organization has spent recent years solidifying county‑based purchasing (the CARMA model) with regular engagement with DHS, the Association of Minnesota Counties (AMC), and county partners; legislative changes authorized development and implementation of the model, with a phased start anticipated in 2027. The presenter also described a marketing and outreach push, including pilot programs addressing nutrition and behavioral health (Bright Bites for Life and a contracting relationship with Doctor on Demand).
On litigation, the presenter said the county‑based purchasing plans challenged DHS procurement (citing a Minnesota statute number provided in the discussion). The appellate court issued an opinion favorable to the county plans; the Minnesota Supreme Court later vacated its prior grant of review as improvidently granted, returning the favorable appellate outcome to take effect. The speaker said the case will be remanded to district court for enforcement and that a new judge has been assigned; an initial hearing was not expected until at least December. The presenter said the county plans have reached out to DHS about a possible negotiated path forward but will await court scheduling.
On membership, staff said converting certain statewide PMAP (PMAP = Prepaid Medical Assistance Program) members could add roughly 6,400 members to South Country based on October enrollment figures, a near‑term increase that could expand membership by about 25–30 percent depending on timing. The presenter cautioned that precise timing is uncertain but suggested increases could occur in 2026 or 2027 as CARMA or a single‑plan model is implemented.
On finances, the presenter reported an August net loss of approximately $3.7 million against a budgeted loss of $1.5 million, with revenues running above budget but claims costs (notably pharmacy) substantially higher than expected. South Country said it established a premium deficiency reserve for 2025, and that midyear rate adjustments from DHS reduced projected losses; the board was told adjusted September results narrowed the year‑to‑date loss to about $2.4 million. Pharmacy cost increases were driven in part by coverage of GLP‑1 weight‑loss drugs included on Minnesota’s preferred drug list, and presenter said South Country continues to press DHS on mitigation measures. The speaker added that contract rates for 2026 were signed with DHS and CMS and included unusually large rate increases (about 14.3% on average) across Medicaid programs, plus new risk corridor protections limiting plan margin exposure.
Commissioners asked about operational impacts of anticipated enrollment growth, whether administration headcount will need to rise, and how claims trends might change; the presenter said some positions had been held vacant pending litigation outcomes and that the plan is monitoring utilization and price drivers.
The presentation concluded with staff invitations to continued collaboration (data modernization and public health conversations) and an invitation to South Country’s AMC dinner event at the upcoming conference.
