WILLMAR — Kandiyohi County is seeking mediation after the Minnesota Department of Human Services rejected the county's choice of PrimeWest Health as its sole managed care plan for publicly funded health programs.

The County Board of Commissioners decided Tuesday to retain a Minneapolis law firm in its challenge of the recent decision by DHS.

There are signs that other counties in the PrimeWest consortium may pursue mediation as well.

The situation echoes health plan disputes in 2015 and 2017 over the state's bidding process for its managed care contracts and brings an element of uncertainty to Kandiyohi County's anticipated entry next year into the world of county-based purchasing with PrimeWest.

Every five years the Department of Human Services opens up the procurement process to determine which health plans will participate in the Medical Assistance and MinnesotaCare programs. Health plans are asked to respond to a request for proposals from the state. Proposals are then evaluated by DHS, the Minnesota Department of Health and counties to determine who will be offered a contract. Final decisions are made by the Human Services Commissioner.

Substantial dollars are at stake. Managed care contracts for Minnesota's public health programs involve more than $5 billion a year.

The state also uses the procurement process to ensure the best care is delivered to this population for the best value.

Kandiyohi County's choice of PrimeWest was supposed to have ushered in a new era of county-based purchasing, starting in January 2020.

Until now, the county has contracted with managed care organizations such as Blue Plus and UCare to deliver health care to low-income residents who qualify for these programs.

Last year the county opted to join PrimeWest Health, a regional organization that contracts directly with health providers and assumes its own risk. The arrangement, known as county-based purchasing, is unique to Minnesota statutes and allows county governments to directly operate the state's low-income health programs, either individually or jointly with other counties.

Kandiyohi County Commissioners and staff saw membership in PrimeWest as an opportunity to address specific local needs, such as a shortage of dental providers, and invest health care dollars at the local level.

Then notice came from DHS in late July of its disagreement with Kandiyohi County's selection of PrimeWest as the sole provider of managed care services for enrollees in public programs.

It's not known why the department decided not to choose PrimeWest as the single health plan, and Minnesota statutes limit what information can be made public during the health plan contracting process.

Because of the confidentiality restrictions, Kandiyohi County officials were unable to comment this week on the situation, although the language of the resolution adopted Tuesday by the County Board states that the county "strongly disagrees" with the DHS decision.

The resolution also indicates the county might take the issue to court if necessary.

The outcome of the mediation will likely be known in mid- to late September.