Kandiyohi County joins others in taking look at PrimeWest for Medical Assistance services

WILLMAR -- When 10 western Minnesota counties got together in 1998 to create their own single-payer organization to provide public medical programs, Kandiyohi County bowed out of an invitation to join the fledgling group.

Now, Kandiyohi County is taking a second look at the joint powers, county-based purchasing organization called PrimeWest Health System.

On Tuesday, PrimeWest CEO Jim Przybilla made a presentation to the Kandiyohi County Board of Commissioners about the success of the program, which has now grown to 13 counties. More counties are considering joining.

"It's a pretty significant decision for counties considering going this route," Przybilla said.

Currently 80 to 90 percent of Kandiyohi County's approximately 5,000 prepaid Medical Assistance recipients receive services through Blue Cross Blue Shield.

Medical Assistance is Minnesota's version of Medicaid for low-income families, seniors or people with disabilities.

The state contracts with Blue Cross Blue Shield for the services provided for participants in Kandiyohi County.

In PrimeWest's case, the joint powers board receives the state money based on a risk-factor formula of a set amount of money for each recipient. PrimeWest then contracts for services directly with local providers based on the needs of county residents.

Through careful management, Przybilla said PrimeWest has avoided the financial pitfalls other county-based purchasing programs have seen and expects revenues of $150 million this year.

PrimeWest has maintained surplus revenue, while paying its local providers about 25 percent more than the state or federal reimbursements to make it "one of the bigger payers." That means more money is invested back into the local providers of mental and health care services.

Case managers are also paid about 20 percent more.

Last year PrimeWest issued $5.5 million in grants from its $18 million surplus.

Revenues are also used to provide more integrated and preventative care to recipients, which reduces institutionalization, visits to emergency rooms and hospital stays, Przybilla said.

PrimeWest is driven by the overall mission to find ways to "best serve the people." The operation is "proving to be the success model."

The joint powers agreement for PrimeWest was signed in 1998 with Big Stone, Douglas, Grant, McLeod, Meeker, Pipestone, Pope, Renville, Stevens and Traverse counties. PrimeWest began offering services in July of 2003 to about 10,000 people.

In the current 13-county area, PrimeWest has a network of more than 250 providers and serves 18,000 clients, a number that's expected to grow to 24,000.

"We're competing with some pretty big boys in the public sector," Przybilla said.

Commissioner Harlan Madsen said he was in favor of Kandiyohi County joining PrimeWest when it started, but he was "in the minority."

At the time, Madsen said, other commissioners expressed concern about the risk and "uncertainty" of jumping in with a brand new entity.

Even if Kandiyohi County does not join PrimeWest, Przybilla said it could use PrimeWest as a bargaining tool to negotiate better options with its current provider.

A representative from Blue Cross Blue Shield is expected to make a presentation to the commissioners sometime in the next month.

In other action Tuesday, the commissioners, meeting as the Family Services Committee, gave final approval to a plan to charge a $500 fee to license a corporate foster care facility, effective Oct. 1.

The fee will not cover the actual costs but will help the county recoup some of the expenses incurred in processing the licenses.