~ Creates new Coordinating Care Organization; replaces General Assistance Medical Care ~

Saint Paul – Following negotiations, Governor Pawlenty and legislative leaders today announced an agreement to provide continued health care for Minnesota’s low income population. The plan will replace General Assistance Medical Care (GAMC).

The agreement establishes substantial payment reforms to the state’s health care system.

“This agreement includes meaningful health care reform and important cost savings,” Governor Pawlenty said. “I would like to thank Senator Berglin, Representatives Murphy, Huntley and Dean for their hard work on this issue. This is a step forward in difficult times.”

Effective June 1, 2010, the plan creates a new hospital-based coordinated care delivery system in partnership with county agencies. Coordinating Care Organizations (CCO) will manage health care and provide medically necessary services for eligible Minnesota residents. Capped block grants to CCO’s will be funded with $71 million from the state’s General Fund in FY 2010-11 and $131 million in FY 2012-13.

The Governor and legislators also agreed to establish a method to reimburse CCO’s for drug costs associated with medical care. Drug reimbursements would be capped at $45 million coming from the General Fund in FY 2010-11 and $83 million in FY 2012-13.

To ensure a seamless transition to the CCO model, GAMC will be temporarily extended under the agreement through May 2010. The extension will be funded with $28 million from the Health Care Access Fund. As a result, the Department of Human Services will not proceed with its plan to transition GAMC recipients to MinnesotaCare.

The agreement also includes a six month Uncompensated Care Pool (UCP) for hospitals that are not designated as CCOs. The temporary UCP will be funded with $20 million from the Health Care Access Fund in FY 2010-11.

GAMC eligible individuals are low-income adults, ages 21-64, who have no dependent children and who do not qualify for federally funded health care programs.

Funding for the program was set to end April 1, 2010. When GAMC funding ended, enrollees were to be automatically moved to MinnesotaCare.