A new cut proposed by Gov. Tim Pawlenty would adversely impact an innovative managed care plan for people with disabilities.

The cut, slotted to save $7 million in the next biennium, but $27 million during the following state spending cycle, targets the Minnesota Disability Health Options (MnDHO) program. MnDHO is a voluntary program offering intensive care coordination services for about 1,220 adults with physical disabilities or complex and chronic medical conditions living within the seven-county metro area that are eligible for Medical Assistance (MA).

The program is administered by the Department of Human Services (DHS), in strong partnership with the health plan UCare and a care coordination organization, AXIS Healthcare, co-owned by Courage Center and Sister Kenny Institute.

State officials testifying at a recent legislative hearing say the problem is that spending on current MnDHO enrollees, on a per person basis, is in some cases more than MA recipients who choose not to enroll in the program.

“We see this as a compliance issue,” said Brian Osberg, assistant commissioner of health care for DHS in testimony before the Senate Health and Human Services Finance Division on March 24.
Program supporters are questioning a new method of financing the MnDHO program that was just implemented beginning Jan. 1, 2009. “We’re working closely with DHS to understand how they arrived at the numbers suggesting that cuts to the program are needed,” said Joel Ulland, public policy manager for UCare, at an April 1 House Human Services Finance Division meeting.

As policymakers are struggling to cut spending in the human services area to fill a large budget hole, accelerating health reform efforts begun last session is one strategy they are employing. Bills are advancing in both the House and Senate that would mandate that people with disabilities select a clinic as a health care home as a way to better manage and coordinate the medical needs of those with disabilities and multiple chronic conditions.

“We strongly believe the MnDHO program is an example of where you want to go with health reform,” Jan Malcolm, CEO of Courage Center told lawmakers at the April 1 hearing. “We need to move cautiously to understand what these proposed cuts could do to this innovative program.”
Lawmakers will be assembling their budgets in the first part of April. Votes are expected to be taken on the issue by April 16.

John Tschida is vice president for public affairs and research at Courage Center