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Minnesota Legislature

Ensuring contract integrity

Published (4/17/2009)
By Patty Ostberg
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A bill to create more oversight of health care cooperatives was approved April 15 by the House Health Care and Human Services Finance Division.

HF120, sponsored by Rep. Larry Hosch (DFL-St. Joseph), would require the health commissioner to review and authorize contracts and business and financial arrangements made by cooperatives to ensure they are not in violation of federal antitrust law.

The bill now goes to the House Finance Committee. Its companion, SF203, sponsored by Sen. Gary Kubly (DFL-Granite Falls), awaits action by the Senate Finance Committee.

Under the bill, the commissioner would have 30 days to approve an application with contracts and financial arrangements from a cooperative. If the commissioner does not ask for more information from the cooperative, after 60 days the application is automatically approved. A $2,000 fee would be assessed for the commissioner’s cost of reviewing and monitoring the arrangements.

Opponents of health care cooperatives have said the negotiations through joint bargaining violate antitrust laws and result in price fixing. A letter from the Federal Trade Commission states concerns with the limited time frame of the commissioner’s review process.

Although rural cooperatives have been somewhat beneficial in providing coverage to many people, cooperatives have an unfair advantage as a public entity, said Rep. Steve Gottwalt (R-St. Cloud). He believes the bill would reduce competition for organizations.

Hosch said the cooperatives ensure access to health care in rural areas. “The Minnesota Rural Health Cooperative has helped in granting access to thousands of Minnesotans throughout the state.”

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