Minnesota Lawmaker Proposes Removing Insurers from State Health Programs

Rep. Tina Liebling cites fraud concerns as motivation for her bill to create a Patient-Centered Care program

Published on Feb. 25, 2026

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Minnesota state Rep. Tina Liebling, a DFLer from Rochester, has proposed legislation to remove managed care organizations (MCOs) from the state's public health programs like Medicaid and MinnesotaCare. Liebling cites ongoing fraud issues as the motivation for the bill, which would create a new Patient-Centered Care program administered directly by the state Department of Human Services rather than through private insurers.

Why it matters

Fraud has become a major issue in Minnesota's public health programs, with the state conducting audits of high-risk providers. Liebling believes that removing MCOs from the equation could help the state better track and address fraudulent activity. However, the proposal faces potential pushback from insurers and some healthcare providers who may benefit from higher reimbursement rates under the current MCO system.

The details

Liebling's legislation would create the Patient-Centered Care program, which would remove MCOs from administering Medicaid, MinnesotaCare, and other state health plans. Instead, the Department of Human Services would hire an administrative services organization to process claims and handle customer service, without the financial risk assumed by MCOs. For counties with their own MCOs, like Itasca Medical Care, the bill would allow those entities to continue serving as administrative service providers.

  • The Minnesota Legislature's 2026 session began on February 17, 2026.
  • Liebling and Sen. John Marty, DFL-Roseville, introduced similar legislation in the 2025 session under HF 255 and SF 1059.
  • Liebling's new bill for the 2026 session is SF 3612.

The players

Rep. Tina Liebling

A Democratic-Farmer-Labor (DFL) state representative from Rochester, Minnesota who has proposed legislation to remove managed care organizations from the state's public health programs.

Sen. John Marty

A DFL state senator from Roseville, Minnesota who co-introduced similar legislation with Rep. Liebling in the 2025 legislative session.

Minnesota Department of Human Services

The state agency that oversees Medicaid, MinnesotaCare, and other public health programs in Minnesota.

John Connolly

The state Medicaid director who said the Department of Human Services plans to expand its prepayment audit to include claims from managed care organizations.

Itasca Medical Care

A county-based managed care organization in Minnesota that would be allowed to continue serving as an administrative service provider under Liebling's proposed legislation.

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What they’re saying

“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. This is a moment to say, 'Wait a minute, why are we doing it this way?'”

— Rep. Tina Liebling (postbulletin.com)

“What we have been told is that each of the managed care organizations has its own proprietary anti-fraud measures. And there's a real question about, well, how much fraud have they discovered? What do they do when they find it?”

— Rep. Tina Liebling (postbulletin.com)

What’s next

The Minnesota Legislature will consider Liebling's bill, SF 3612, during the 2026 legislative session that began on February 17, 2026.

The takeaway

Liebling's proposal to remove managed care organizations from Minnesota's public health programs reflects growing concerns about fraud and a desire for more transparency and oversight in how these vital services are administered. The debate over this bill will likely center on balancing cost, efficiency, and anti-fraud measures in the state's Medicaid and other health coverage programs.