Jul 22, 2021 - COVID

What Minnesota's COVID-19 testing contracts might cost taxpayers

Workers sort through vials at IBX's COVID-19 spit test processing facility in Oakdale, Minnesota.

IBX's spit test processing facility in Oakdale, Minnesota. Photo: Glen Stubbe/Star Tribune via Getty Images

A new investigation is raising questions about Minnesota's COVID-19 testing program, the pricey contracts it awarded to private companies as the pandemic raged and how much of those costs will be passed on to taxpayers.

What's new: APM Reports dug through droves of public records and found that the state "relied on no-bid contracts for companies backed by private equity, regulatory shortcuts, and a complicated payment structure" to get the program off the ground.

Why it matters: The program was expensive, totaling $130 million so far, and the two private companies that secured most of that funding β€” Vault Health and IBX β€” faced no competition or public vetting before the contracts were inked.

  • The deals they struck with the state "will eventually pass tens of millions of dollars in testing costs on to the public, either through tax hikes or higher health insurance costs," APM notes.

Reality check: Widespread access to testing was essential to tracking the virus' spread and saving lives.

  • Many public health experts have lauded Minnesota's testing effort as an overall success, and a number of other states scrambled to expand capacity through similar avenues.

Yes, but: The emergency agreements made it difficult to track how much the companies are actually billing, especially to private insurers.

  • And a decision to skip federal authorization for IBX's spit tests means there isn't good public data about how accurate they are at identifying asymptomatic cases.

What they're saying: State officials and company representatives defended the contracts to APM, arguing that they allowed Minnesota to significantly increase its testing capacity at a crucial time.

  • They noted that the decisions were made as states rushed to launch mass testing programs without much federal coordination or support.

The other side: Republican state Sen. Michelle Benson, who has previously raised questions about the agreement, said the report "makes it clear that something needs to change about the way we as a State handle these types of contracts."

  • "We must take accusations of price-gouging very seriously because ultimately those excess costs will be shifted to consumers," she added.

The bottom line: Sixteen months later, and we still have no idea how much the testing really costs β€” or how accurate the spit tests are for asymptomatic carriers.

  • Costs, and stakes, could rise heading into the fall, as Delta and other variants threaten to drive a surge in cases.

Go deeper with the full investigation.


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