Major debate as committee considers bill to shift Medicaid purchasing away from managed‑care organizations

The House Finance and Policy Committee spent the largest portion of its March 18 meeting on House File 34 76, a sweeping proposal to change how Minnesota purchases and manages Medicaid care. Representative Will Liebling framed the measure as a move to eliminate a longstanding “middleman” in the state’s Prepaid Medical Assistance Program (PMAP) and shift to county‑based direct payment and coordination.

Liebling argued the current managed‑care model creates a “black box” that shields how public dollars are spent and contributes to administrative overhead. He told the committee lawmakers should be accountable for roughly $10 billion a year in public program spending and questioned whether PMAP delivers better care or value for that money: “This is our public program...you are government,” he reminded members, urging legislative control and transparency over how taxpayer dollars flow.

Proponents who testified included Sheldon Taubman (attorney, Disability Rights Connecticut), nurses and clinicians, and medical students. Taubman described Connecticut’s experience and long advocacy to address access, network adequacy and transparency problems, saying the managed‑care system can produce narrow networks, burdensome prior authorizations and confidentiality over how providers are paid. Nurses and clinicians urged the committee to consider system‑level changes that prioritize patients and reduce administrative friction.

Opponents included representatives of nonprofit health plans and managed‑care organizations. Chelsea Olsen of the Minnesota Council of Health Plans said managed care delivers care coordination for high‑need populations and warned that dismantling the current model could add fiscal risk and fragment services; she urged a full programmatic and fiscal analysis before structural change. Testimony from health plans emphasized care coordination infrastructure, networks of care coordinators and state and federal program interactions that would be complicated to unwind.

Questions from lawmakers covered fiscal risk, transition timelines, whether counties would be certified purchasers, and how the state would staff or contract administrative services if the model changed. Supporters cited examples of other states that have moved away from similar models and argued the change could reduce overhead and increase accountability; opponents stressed that Minnesota’s integrated programs (particularly for elderly/dual‑eligible populations) are regarded as national models for care coordination and that a rapid transition could harm vulnerable patients.

Representative Liebling renewed his motion to lay HF 34 76 over for possible inclusion; the committee laid the bill over and adjourned after extended debate. Lawmakers requested additional analysis, and multiple members emphasized the need for detailed fiscal notes and implementation planning before any structural change would proceed.