One of the state's largest Medicare Advantage insurers says M Health Fairview and CentraCare are opting out of the health plan's network next year, a shift that could force more than 10,000 Minnesotans to either change insurers or pay more of out of pocket to see their doctors.

Humana Inc., the Kentucky-based insurance giant, says it recently received word that the health systems starting next year intend to leave the company's Medicare Advantage network. Networks are important in Medicare Advantage plans because patients typically pay more out of pocket if they want to visit an out-of-network doctor or hospital.

Humana says it's open to talking with both health systems so they might still be included next year, but M Health Fairview says seniors should consider changing insurers.

"This decision was brought on because of the significant incremental cost of working with Humana to recover payments for services that we feel were denied inappropriately to Humana members," the health system said in a statement. "We hope our patients will consider a different Medicare Advantage plan that includes M Health Fairview as part of its network."

Network disputes occur periodically between insurers and health care providers, usually over financial terms. They often settle without disruption for patients, but not always.

The market for Medicare Advantage plans in Minnesota is getting more competitive, with new companies entering the market in recent years and existing players expanding their service areas, said Allan Baumgarten, an independent health care analyst in St. Louis Park. Health care providers might see the competition as an opportunity, Baumgarten said, to negotiate for better financial terms from the insurers.

"It could be that they've gotten a better deal from one of the other Medicare Advantage plans," he said. "Or, maybe they're hoping that Humana will come around and match what they think are better terms from other Medicare Advantage plans. All these things are possible."

Dispute with Humana

Medicare Advantage health plans from Humana covered about 112,000 Medicare beneficiaries across Minnesota, according to federal data in September. M Health Fairview, which is one of the state's largest health care providers, says it currently provides services to about 10,000 of those subscribers.

St. Cloud-based CentraCare didn't say how many Humana subscribers use the health system's physicians and six hospitals in central Minnesota.

"Effective January 2, 2021, CentraCare will not be an in-network provider in the Humana Medicare Advantage program," the health system said in a statement to the Star Tribune. "We are currently in the process of informing our patients of their options, which are many."

Humana says it will provide continuity of care, as specified in federal law and regulations, for Medicare Advantage members who medically need to continue with a current course of treatment or ongoing services.

"Humana considers our negotiations with health care providers proprietary and will not publicly discuss specifics of proposals or contractual issues," the insurer said in a statement. "We remain open to continued discussion with both systems, and are disappointed this is occurring — particularly at this time, during the midst of the coronavirus pandemic and immediately preceding the start of [open enrollment]."

The annual period for Medicare beneficiaries to select a new health plan and/or prescription drug coverage begins Oct 15.

Medicare Advantage plans are a newer form of Medicare coverage, where beneficiaries opt to receive their government health insurance benefits through a private managed care company. A majority of seniors still receive benefits through the original Medicare program, but the market share of Medicare Advantage health plans has grown significantly as insurers see the market as a growing source of profits.

Whereas almost all doctors and hospitals are part of original Medicare, the newer Advantage plans have networks of doctors and hospitals that can significantly limit choices. Limits often come in exchange for lower monthly premiums.

Networks change

In Minnesota, the change with Humana next year shows another aspect of networks — their composition can change from year to year.

"Humana has a large number of enrollees in their plans in Minnesota," said Kelli Jo Greiner, the Medicare program manager at the Minnesota Board on Aging. "These are large medical providers in the communities they serve so it is likely that this will generate … the potential for plan changes."

Federal data show that Humana was the third-largest provider of Medicare Advantage and Medicare Cost plans in the state in September. The insurer significantly increased its market share in 2019 when thousands of Minnesotans lost their Medicare Cost health plans and had to pick a new insurance option.

On Tuesday, M Health Fairview said it was notifying patients about the Humana change and had told its own health care providers. Patients face financial burdens, the health system said, when their health care providers are out-of-network.

M Health Fairview is the brand for health care services from the University of Minnesota, University of Minnesota Physicians and Fairview Health Services. Minneapolis-based Fairview operates 10 hospitals including the University of Minnesota Medical Center in Minneapolis and M Health Fairview Southdale Hospital in Edina.

On Monday, Fairview announced a large restructuring in the face of significant financial losses.

In 2020, about 36% of all people on Medicare — 24.1 million people out of 67.7 million beneficiaries overall — are enrolled in Medicare Advantage plans, according to the California-based Kaiser Family Foundation. More than 40% of Medicare beneficiaries in Minnesota are enrolled in a Medicare Advantage or Medicare Cost health plan.

In 2016, a contract dispute threatened in-network access to Fairview for Medicare beneficiaries with coverage via Blue Cross and Blue Shield of Minnesota, but patient disruptions ultimately were averted. The following year, Children's Minnesota went out of network for just a few days before it resolved a contract dispute with Blue Cross.