Republicans question Dayton on MNsure vendor payments

Citing health exchange troubles in Maryland, Republicans are pushing DFL Gov. Mark Dayton to seek recovery of taxpayer funds if vendors working on the MNsure IT system failed to satisfy contractual obligations.

In a letter released Friday, Rep. Greg Davids, R-Preston, and Rep. Joe Hoppe, R-Chaska, referenced a July decision by the state Department of Human Services to stop using MNsure for sending bills to enrollees in the state's MinnesotaCare public health insurance program.

The Republicans said the decision was based on "serious flaws in the system," adding that "problems with MNsure are extensive, well documented and ongoing."

In July, the state of Maryland announced it will recover $45 million from the lead contractor on its insurance exchange, Davids and Hoppe noted, because of the failure to deliver a functioning product.

"Minnesota must take the same steps as Maryland to recover any funds possible from the MNsure debacle," the Republicans wrote Dayton and state Attorney General Lori Swanson. "Refusal to do so will send the message that vendors who fail to fulfill their obligations can take advantage of our state without any consequence."

In a prepared statement, Dayton chief of staff Jaime Tincher said Dayton has made clear his criticism of MNsure's vendors, and the state has made important contact changes since launching the exchange in 2013.

"Those changes have included: overhauling the management structure of the project, concluding the work with our contractors and only paying for services they delivered, and withholding $5.6 million in payments for services not provided," Tincher said. "Our primary objective now is giving Minnesotans the reliable services they need to purchase quality, affordable health coverage."

Minnesota and Maryland were two of more than a dozen states to create their own health exchanges to implement the federal Affordable Care Act. The states hired different lead vendors, but there were similarities between the projects.

After a rocky rollout, Maryland opted in early 2014 to drop its homegrown health exchange IT system and use a modified version of a system built by another state-based exchange. Minnesota decided to keep working to improve MNsure.

"The Minnesota exchange shared many of the same key vendors as Maryland with many of the same poor outcomes," Davids and Hoppe wrote. "In addition, state officials responsible for the construction of MNsure collaborated extensively with those in charge of building Maryland's exchange."

Joe Campbell, a MNsure spokesman, said there were important differences between the situations in Minnesota and Maryland.

MNsure's lead vendor had a contract that was much more limited in scope and dollar value, Campbell said. Plus, Minnesota's exchange had technical issues that were different than those in Maryland.

"We had three or four different vendors tell us our infrastructure and load-bearing capacity was fine," Campbell said.

In other MNsure news Friday, the state's new 29-person task force on health care financing met near the Capitol to consider possible changes to the exchange as well as the state's public health insurance programs. The task force must submit recommendations to the Legislature by January.

The group took no action Friday, but touched on financial struggles for Minnesotans who suffer illnesses while covered by high-deductible insurance plans.

DFLers have suggested that by seeking a federal waiver through the Affordable Care Act, Minnesota could help lower-income residents with some of these out-of-pocket costs.

"It's not whether you can afford the insurance," said Sen. Tony Lourey, DFL-Kerrick. "It's whether you can afford to get sick, as well."

Christopher Snowbeck • 612-673-4744

Twitter: @chrissnowbeck