Minnesota Modifies Provider Payment System

State legislation that would permit employers in Minnesota to pay medical providers based on episodes of care rather than on a fee-for-service basis was signed Thursday, May 29, by Gov. Tim Pawlenty.

Under the law, employers would, for example, pay providers a package price for a year’s worth of care delivered to a diabetic, explained Charles Montreuil, vice president of human resources at Minnetonka, Minnesota-based Carlson Cos. Montreuil was a member of the task force that developed the legislation.

State Sen. Linda Berglin, who introduced the measure in the Senate, said the state Department of Health would define the so-called “baskets of care”—the specific chronic conditions that providers would treat for a package price.

The Omnibus Health Care Bill also establishes a pay-for-performance program for Medicaid and a certification program for medical homes, where a single physician coordinates all the care for an individual; gives consumers online access to provider price and quality information; and requires that all prescription orders be made electronically by 2011. Senate File 3780 also creates a grant program to help small employers establish Section 125 plans that allow individuals to pay insurance premiums on a pretax basis.

Berglin said the Department of Health also will publish prices for all providers on the Internet.

Filed by Joanne Wojcik of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.