As Minnesota lawmakers convene for the 2026 legislative session, fraud prevention has emerged as a top issue. Rochester’s Rep. Tina Liebling, a DFLer, proposes removing managed care organizations from the state’s public health programs, which include Medicaid and MinnesotaCare. “The more complicated you make your systems, and the more you spin off pieces of it here, there and everywhere, the harder it is to really track what’s going on,” Liebling said.
The Patient-Centered Care Program
Liebling’s legislation would create the Patient-Centered Care program, which would eliminate managed care organizations from the picture. Most of Minnesota’s Medicaid and MinnesotaCare enrollees currently receive health coverage through an MCO—a health insurer contracted with the state government to provide health care benefits. The proposal updates earlier legislation introduced during the 2025 session, with the reworked bill text introduced this week via SF 3612.
“The reason we think this is the right moment for it is because of the fraud problem,” Liebling said. She pointed to the Minnesota Department of Human Services’ ongoing prepayment audit of Medicaid services provided by behavioral intervention practices, adult day programs, and other high-risk providers. Currently, the audit covers only fee-for-service Medicaid transactions—those provided under plans without an MCO. On February 2, state Medicaid Director John Connolly indicated the department plans to expand its prepayment audit to include MCO claims as well.
Implementation and Concerns
If enacted, the state human services department would hire an administrative services organization to process claims and handle customer service for public health programs without assuming the financial risk that MCOs do. Counties with their own MCO, such as Itasca Medical Care, could continue serving as an ASO. Liebling acknowledged expecting pushback from health insurers and providers, noting that MCO reimbursements are sometimes higher than fee-for-service coverage. She emphasized this is “just a starting point,” with plans to review rates over time to determine where additional payment may be needed.
This article is an AI-assisted summary. All facts and figures are drawn from the original report: https://www.wctrib.com/news/minnesota/as-lawmakers-debate-anti-fraud-measures-rep-tina-liebling-proposes-removing-insurers-from-state-health-programs