Minnesota Modifies Provider Payment System

By Staff Report

May. 30, 2008

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

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