Allina may exit Humana’s Medicare Advantage network in 2025, affecting 18,000 Minnesotans

Allina Health has notified thousands of patients with Humana Medicare Advantage plans that their doctors might be out-of-network next year and therefore only available with higher out-of-pocket costs unless the Kentucky-based insurer agrees to a contract that reduces claims denials and prior authorization rules.

The Minneapolis-based health system, one of the largest operators of hospitals and clinics in Minnesota, alerted about 18,000 patients of the potential disruption last week, just as Medicare open enrollment was getting underway.

The network exit would extend a recent trend where four other nonprofit health systems operating in Minnesota have announced their intent to go out-of-network next year with Medicare Advantage health plans from Humana. A fifth health system has announced plans to go out-of-network with Minnetonka-based UnitedHealthcare’s Medicare Advantage plan, while a sixth large health care provider expects to leave Medicare networks at both Humana and United.

“It’s important that Humana agree to a contract that reduces administrative burden, eliminates friction for patients and providers and keeps up with the rising cost of providing outstanding care,” Allina said in a statement to the Minnesota Star Tribune. “We continue to negotiate with Humana and hope to reach an agreement that allows us to remain in-network in 2025 so that patients can keep their preferred Allina Health providers and hospitals.”

Humana says the insurer is committed to reaching an agreement so enrollees maintain access to high-quality and affordable health care services.

“We have engaged in good-faith discussions and proposed solutions to meet their requests,” the health insurer said in a statement. “Allina Health’s current demands overlook the value that Medicare Advantage plans provide, such as lower out-of-pocket costs, higher quality care than traditional Medicare and benefits that matter most to our members. We remain open to renewing a contract with Allina that is fair and beneficial for both parties.”

An Allina spokeswoman said it was difficult to generalize about exactly how much more patients would have to pay to visit Allina on an out-of-network basis; a statement posted on the health system’s website says, “If Allina Health and Humana don’t reach an agreement, you’ll need to find a new provider or enroll in a different plan for 2025.”

The impasse is the second-largest of the six contract disputes that have surfaced in recent months — an unusually high number, state officials say.

Public conflicts between health insurers and health care providers have occurred periodically for decades, but the recent crop is somewhat unusual for spotlighting allegations about excessive claims denials and prior authorization rules.

Hospitals say insurers have used these administrative tactics in ways that slow patient care and hurt medical centers financially. Insurers have denied the allegations while stressing how they still hope to reach contract agreements for 2025.

Joshua Haberman, an insurance agent with Haberman & Alexander in Bloomington, said the Allina-Humana news “underlines one of the most important factors that consumers need to be evaluating when they select a plan — do they feel good about their insurance company’s ability to maintain relationships and operating procedure in order to provide stable benefits? That carrier trust — that reputation — should be a significant factor in selecting a plan.”

Allina’s notice to patents last week mentioned that seniors could contact Humana to let the insurer know about the importance of continued access to the health system. One patient, who asked not to be identified, raised concerns about Allina’s suggestion.

“My question is whether patients being invited to be spokespersons/advocates by one of the parties in these contract negotiations might unwittingly become pawns or indirect victims in the dispute,” the person said via e-mail.

Medicare is a government health insurance program for U.S. seniors and younger people with disabilities that covers hospitalization and doctor visits. Since Medicare doesn’t cover all costs, many seniors buy a Medicare Supplement from a private insurer to expand the coverage, plus a separate policy from an insurer for prescription drugs.

Over the past 20 years, however, a growing number of beneficiaries have opted instead for Medicare Advantage health plans, which are sold by private insurers that have been hired by Medicare to provide for members’ care.

These Advantage plans typically bundle together benefits for hospital and physician care along with drug coverage, and they can be purchased at a lower monthly premium than a Medicare Supplement plus drug coverage. The plans also cap annual out-of-pocket costs and provide extra benefits.

A key trade-off is Medicare Advantage plans generally have fewer providers in their networks — and networks can change.

With network disputes, it’s difficult to outline all the factors that could be driving any particular impasse. Contract negotiations are private and involve market power dynamics that vary, but analysts say financial stress likely is part of the backstory with the recent surge in Minnesota.

Over the past year, Medicare Advantage plans have said they’re taking a revenue hit from the federal government, due in part to changes with risk adjustment payments to insurers. Hospitals, meanwhile, say they’re still recovering from financial pains including high labor costs with the COVID-19 pandemic.

Most Medicare Advantage health insurers in Minnesota aren’t reporting big network changes for next year, yet the Minnesota Hospital Association advised seniors earlier this month to take a “buyer beware” approach with Medicare Advantage plans from for-profit carriers.

“Medicare Advantage insurance denials grew by more than 50% in the U.S. last year, adding a significant bureaucratic burden for providers and hindering the care patients receive,” the trade group said in a news release, citing a September report from the American Hospital Association.

Asked about denials, a national trade group for insurers called America’s Health Insurance Plans asserted that more than 33 million seniors and people with disabilities have opted for Medicare Advantage “because they get better health care at lower costs.”

Chris Bond, a spokesman for the insurance group, added in a statement: “Surveys consistently show Medicare Advantage beneficiaries are highly satisfied with their choices of hospitals and doctors and their access to care.”

The Allina-Humana network break still might be avoided, but seniors who’ve been notified by the health system and want to stick with their health care providers next year should consider making changes now, said Kelli Jo Greiner of the Minnesota Board on Aging.

Open enrollment for Medicare health and drug plans started this month and ends Dec. 7. If Allina and Humana ultimately reach a contract agreement, Greiner said, seniors can switch back into Humana coverage during a second Medicare open enrollment period that runs from January through March.

The state Board on Aging and Senior LinkAge Line are offering this advice, as well, to Minnesota patients impacted by the other disputes.

“We are not encouraging beneficiaries who want to continue seeing their chosen providers in 2025 to wait,” Greiner said via e-mail. “Waiting could present many problems such as not being able to get the help needed to review options and make a plan selection that include their providers by Dec. 7.”

As the signup deadline approaches, help lines run by the state and federal government get busier, Greiner said. In Minnesota, the Senior LinkAge Line is “already experiencing a much higher call volume than we have experienced in previous years,” she said.

Open enrollment runs Oct. 15 through Dec. 7. The Medicare Plan Finder tool is available online at Medicare.gov. The federal government assists consumers over the phone at 1-800-MEDICARE (1-800-633-4227). Health insurance agents can help individual seniors, as well. Minnesota seniors can get help exploring options by calling the state’s Senior LinkAge Line at 1-800-333-2433.