WILLMAR — Kandiyohi County has suspended its entry into the PrimeWest Health county-based purchasing organization.

The move, which had been in the works for more than a year, was supposed to become official Jan. 1. But a clash between several Minnesota counties and the state Department of Human Services over the procurement process for publicly funded health programs has called a halt to Kandiyohi County's plans and cast doubt on the future of county-based purchasing.

For Kandiyohi County residents covered by Medical Assistance, MinnesotaCare, Minnesota Senior Health Options and Minnesota Senior Care Plus, the news means no immediate changes in the health plans currently available to them.

"We will continue with our current contracted providers," said Jennie Lippert, director of Kandiyohi County Health and Human Services.

The future for Kandiyohi County's relationship with PrimeWest remains uncertain, however.

In discussion Tuesday about the issue, the County Board of Commissioners expressed hope that a solution can be reached with the state and that Kandiyohi County can eventually proceed with its plan to join PrimeWest Health.

"We believe it's very important to continue plowing ahead," said Rollie Nissen, chairman of the County Board and the county's representative on the PrimeWest board of directors.

Joining the 24-county PrimeWest group would have given Kandiyohi County more local say in how health care services are provided to those covered by public health programs, say county leaders. The public programs cover a substantial population, accounting for about one in every five residents of Kandiyohi County.

Minnesota counties have had the option since 1997 of entering into county-based purchasing to administer public health programs at the local level. In effect it allows them to function as a health plan with the same ability as a commercial health plan to contract with providers, set payment rates and manage risk.

Supporters say it enables counties to direct resources toward needs that are uniquely local — for example, better reimbursement for dental care and for transportation, two services often in short supply for this population in rural communities. County-based purchasing also enables the member counties to keep the profits, if there are any, and reinvest them locally.

Trouble arose this summer when the Department of Human Services put its health plan contracts out for bid and issued recommendations that went counter to the recommendation of numerous rural counties, including Kandiyohi County, to choose a county-based purchasing organization as their sole option. The contracting process ultimately was suspended but it's not clear what will happen next.

"We were blindsided, there's no question about that," Nissen said Tuesday.

The situation has delivered "a major hit" to PrimeWest Health, agreed Commissioner Roger Imdieke.

More than this, it raises doubt over the willingness of state officials to continue recognizing county-based purchasing as a viable option, he said. "This threatens county-based purchasing."

Nissen said the PrimeWest board of directors is meeting in early October to talk about the next steps. Although the procurement process has been suspended for now, DHS is likely to call for a new round of health plan proposals in 2020 or 2021 "which could be the same dead end we ran into this time," he said.

He urged his fellow commissioners to talk to their legislators. The Association of Minnesota Counties has been having conversations with the Department of Human Services and Gov. Tim Walz as well.

Discussion also will be continuing among Kandiyohi County staff and officials, Lippert said. "I know we will have many meetings going forward."

Larry Kleindl, county administrator, said last week that Kandiyohi County hasn't made any financial contribution yet to PrimeWest Health. The county was to have paid $3.6 million into the PrimeWest capital reserve to underwrite its share of the risk. Half of this amount was to have been paid upon execution of the joint powers agreement, with the remainder due in mid-2020.