Changes Ahead in Managed Care

The 2006 Minnesota Legislature adopted several significant changes for persons with disabilities who use Medical Assistance health coverage. The legislation, developed by disability advocates and authored by Representative Finstad and Senator Lourey, sets a path for further development of managed care options for persons with disabilities in Minnesota. The most significant of the changes affect persons who are eligible for both Medicare and Medical Assistance beginning in January 2007.


In Minnesota, there are approximately 95,000 persons eligible for Medicaid (Medical Assistance) due to disability. Two of the three separate eligibility groups who qualify for Medical Assistance (MA), families with children and the elderly, are now required to join a managed care plan, about 286,000 persons. Efforts are underway to include persons with disabilities in managed care under MA. Key issues include whether participation in a managed care plan is voluntary or mandatory and whether the managed care health plan will include continuing or long-term care services in addition to basic health care.

Of the 95,000 persons eligible for MA due to disability, over 40 percent are eligible for Medicare coverage as well. Persons with both Medicaid and Medicare are called “dual eligibles.”

Currently, there are at least three separate types of managed care models for persons with disabilities in Minnesota; one is now operating and two are under development. The three types of managed care models in Minnesota include:

Minnesota Disability Health Option (MnDHO)

The Minnesota Disability Health Option includes Medicaid and Medicare benefits as well as both basic health care and continuing or long-term care services for persons with disabilities. Two separate projects operate under the MnDHO authority: AXIS/UCARE in the metro area is serving persons with physical disabilities, 63 percent of whom also have a mental health diagnoses and Partners Choice Network for persons with developmental disabilities connected with Mount Olivet Rolling Acres in Carver, Scott and Hennepin Counties. The MnDHO program is patterned after the Minnesota Senior Health Option, which is available across Minnesota. The MnDHO program is required to be voluntary so that a person may choose to join or leave each month.

Medical Assistance Managed Care

Medical Assistance managed care, known as prepaid Medical Assistance (PMAP), does not cover persons with disabilities. PMAP covers low-income families with children and seniors over 65.

Currently, there is a legislatively established DHS stakeholder group working to develop a plan for Medical Assistance managed care options for persons with disabilities for implementation by January 2007. This stakeholder group, led by Assistant Commissioner Brian Osberg, involves only the Medical Assistance program and is limited to basic health care.

Medicare Special Needs Plans

Medicare is a federal program funded solely with federal funds and enrollee co-payments, deductibles and cost sharing. Several years ago, federal legislation established Medicare special needs plans that allow health plans to focus on one of several populations of special needs individuals and offer managed care plans for Medicare covered services. Minnesota currently has nine Medicare special needs plans, called SNPS (pronounced “snips”) for seniors and two plans specializing in services for persons with disabilities. The two Medicare SNPS for persons with disabilities are AXIS/UCARE in the metro area and AbilityCare, which is part of South Country Health Alliance in south central Minnesota.

With at least three separate managed care efforts underway and the governor’s legislative proposal for significant mental health changes, advocates decided to work for legislation to both set some parameters for further managed care development and establish a stakeholder process. The new legislation includes several significant provisions which affect the future development of managed care for persons with disabilities using MA health coverage in Minnesota.

2006 Changes

Medicare SNP + MA Basic Care

The most significant change allows Medicare special needs plans to offer Medical Assistance basic care services in a managed care arrangement on a voluntary basis for persons with disabilities. Given that there are two disability-focused Medicare SNPS now operating, it is likely that these two plans will seek to provide MA basic care services for voluntary enrollment during 2007. The Medicare SNP + MA Basic Care Plan is required to be voluntary so that enrollees may decide to join if they believe the plan will meet their needs. If an enrollee who joins finds that the plan is not satisfactory, the individual is free to dis-enroll.

Another very significant issue in managed care is whether continuing care or long-term care services will be included with basic care. The Medicare SNP + MA Basic Care excludes home and community waiver services, case management for persons with developmental disabilities and ICF/MR services. In addition, PCA services will only be included to the extent determined by the commissioner after consultation with the stakeholder group. There is concern that continuing care and community support services are different from primary health care services and, consequently, further consideration and analysis should occur before including those services in a managed care health plan.

Stakeholder Group

Secondly, the legislation establishes a state-level stakeholder group for consultation with the Commissioner of Human Services on specifications for the Medicare SNP + MA Basic Care contract, implementation efforts, consumer protections, quality assurance measures, data collection and reporting and evaluation of costs, quality and results. In addition, the legislation requires that local or regional stakeholder groups are to be established for consultation by each health plan seeking to contract for Medical Assistance Basic Care services for persons with disabilities.

MnDHO Expansion

Third, the legislation establishes provisions for the expansion of MnDHO beyond the current two demonstration projects. Expansion of MnDHO will not occur until January 2008. Plans for further expansion will be the subject of consultation with the stakeholder group. MnDHO’s two projects now include all basic care as well as all long-term or continuing care for about 670 enrollees with disabilities in Minnesota. The stakeholders will examine the structure and policies of the current demonstration projects to learn about the aspects of the programs which are important for success with persons with disabilities. A key discussion point on MnDHO expansion will be whether and how to include home and community waiver programs within a managed care plan. Plans for further expansion of MnDHO will be presented to the legislative committees by February 1, 2007.

Health Plan Data

Finally, the Department of Human Services is required by the new legislation to report aggregate health plan data in a form which will allow tracking of services provided, major categories of spending and criteria for service authorization. Advocates want to assure that data now available on health care provided to persons with disabilities under Medical Assistance continue to be available as persons with disabilities enroll in managed care. Because health plans will be paid a set monthly amount per person whether services are provided or not, advocates contend that tracking spending and health care services provided is extremely important in order to assure that persons with disabilities receive needed services.

In the coming weeks and months, it is expected that the Department of Human Services will meet with stakeholders to begin development of the Medicare SNP + MA Basic Care coverage as well as to confer on issues regarding the inclusion of continuing care, including personal care assistant services in managed care plans. The legislation itself (Chapter 282, Article 20, Sections 28, 29 and 30) can be found through the legislative Web Site Individuals interested in more information about the stakeholder process can contact the Consortium for Citizens with Disabilities, or a disability advocacy group with representation on the stakeholder group, such as Arc Minnesota, National Multiple Sclerosis Society Minnesota Chapter, Courage Center, National Alliance for Mental Health, and the Governor’s Council on Developmental Disabilities.