Health alliance reports loss

BACKUS - South Country Health Alliance has gone from a $1.7 million net income in 2006 to a net loss of $6.8 million in 2007 since several northern counties, including Cass and Crow Wing, were added to the system last year.

The alliance of counties provides medical assistance to low-income residents in place of a state medical assistance program. It started with a group of southern Minnesota counties and added the northern counties group a year ago.

Cass County Commissioner Jim Dowson reported Tuesday an audit is being conducted to determine the reason for the profitability change in the program.

Health, Human and Veterans Services Director Dorothy Opheim said South Country Health Alliance has managed the program for the southern counties within the agency's office, but because Blue Cross/Blue Shield already had a database of network providers for the northern counties, the Blues managed the northern counties' claims during 2007.

South Country has doubled its staff within the last year and is in the process of shifting some case management from Blue Cross/Blue Shield into South Country staff management, Opheim said. Whether that will make a difference in 2008 remains to be seen, she added.

What is known at this time is that claims Blue Plus processed in 2007 ran $310 per member per month, compared with the $210 per member per month cost South Country recorded for claims it processed in 2007 for southern county clients.

Whether that cost differential was due to the claims processor or due to the type of claims may be reflected in the audit, Dowson suggested, adding that the increased South Country staff increase also could be a factor.

He also warned the board that if the audit doesn't show a reason that can be corrected, Cass County can expect to pay more to South Country Health Alliance in future years to offset costs running higher than projected before the county joined.

In other Health, Human and Veterans Services business Tuesday, Opheim reported Leech Lake Reservation began processing new child welfare cases Feb. 11, about a month later than initially planned, because not all counties and the reservation had signed all documents before that date.

March 1, Cass will begin transitioning existing Indian child welfare cases to Leech Lake over a three-month period. Opheim said her staff will track whether shifting Indian child welfare cases to Leech Lake results in cost savings to the county.