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Legislative Update from Rep. Glenn Gruenhagen

Thursday, July 22, 2021

Dear Neighbors,

Earlier this month, I shared information regarding the possibility that the Walz administration may have negotiated sweetheart deals with Vault Health and Infinity BiologiX (IBX) for COVID-19 testing. This was especially important to highlight because a last-minute amendment to the taxes bill during special session gave the administration the ability to ignore state contracting, conflict of interest, and competitive bidding laws.

Beginning in November 2020, Vault Health and IBX entered into a contract with the state to provide COVID-19 testing at numerous sites around the state. The initial contract obligated the State of Minnesota to pay a total of up to $24.66 million to Vault and IBX. In April 2021, an amendment to the contract increased the State of Minnesota’s maximum obligation to $74.96 million. The contract also authorized Vault and IBX to assume responsibility for a previous state contract to provide COVID-19 testing to educators in Minnesota.

It should be noted that a former DFL candidate in Minnesota’s 1st Congressional District is a high-ranking official at Vault.

These contracts are back in the news this week after the non-partisan Legislative Auditor (OLA) completed and released a review of payments for COVID testing from state contracted insurers to Vault Health and IBX after receiving several complaints on the topic.

The review reveals that claims that were paid out by the state were not “excessive”. However, the review did not examine the appropriateness of the rates negotiated by the state or payments from private insurers. This is an important distinction.

OLA examined only COVID tests given to people enrolled through the state’s employee group insurance program (SEGIP) or through public health care programs. Keeping the review to only these groups severely limited the reviewable claims investigated and may not show us the full picture of what is really going on with these contracts.

The narrow scope of the review and the lack of investigation into whether the negotiated rates per test were reasonable makes me believe that there may be more to this story.

This review also revealed that some SEGIP affiliated managed care organizations (MCOs) perceived that the claim amounts submitted by Vault and IBX were excessive, given the services that were provided.

Ultimately, the review has resulted in more questions than answers. Because of this, House Republicans have requested additional information from the Legislative Auditor. It is our duty to provide oversight as needed and to be good stewards of taxpayer dollars. We will continue digging into this issue because Minnesotans deserve to know if the Walz administration negotiated sweetheart, no-bid contracts with Vault Health and IBX.

Staying in Touch

Please do not hesitate to reach out to me to share your thoughts, questions, and concerns as it relates to state government. I can be reached at 651-296-4229 or via email at rep.glenn.gruenhagen@house.mn.

Have a great day,

Glenn

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