Blue Cross shifting work to Anthem

Blue Cross and Blue Shield of Minnesota is shifting back-office work for its management of state public health insurance programs to a subsidiary of Indiana-based Anthem, one of the nation's largest health insurers.

The move comes while the state's relationship to health insurers in the public programs is in flux, with Minnetonka-based Medica largely dropping the business last year and state lawmakers opting in early 2017 to open the market to for-profit HMOs for the first time in decades.

In a statement, Eagan-based Blue Cross did not connect the Anthem development to any broader changes within public programs, which provide coverage for lower-income residents who qualify for the state-federal Medicaid program.

"To continue to better serve our Medicaid members now and in the future, we're establishing a partnership to acquire best-in-class capabilities for our members," Blue Cross said in a statement that specified the partnership is with the Anthem affiliate Amerigroup. The "extent of this partnership is limited to our Medicaid business within Minnesota."

Neither Blue Cross nor Anthem disclosed financial terms. Blue Cross officials didn't say how many local jobs would be affected, but the insurer said in a statement that it expects to reassign many employees to its Medicare Advantage business and other growing areas of the company.

Blue Cross of Minnesota is the state's biggest health plan by some measures, with large businesses serving employer groups and Medicare beneficiaries.

Anthem operates Blue Cross Blue Shield health plans in numerous states and is a publicly traded company.

"Through our affiliated family of companies, we provide supports and services for Medicaid members in more than 20 states, including several markets where we have collaborations with the local Blue Cross Blue Shield plan," Anthem said in a statement.

Amerigroup will not have a public presence within Minnesota, according to Blue Cross of Minnesota, which manages the Medicaid business through an HMO called Blue Plus. This month, about 310,000 parents, children and adults without children are receiving Medicaid coverage managed by Blue Plus.

For decades, the state has hired HMOs including Blue Plus as managed care organizations in the public insurance programs.

"Blue Plus will continue to maintain its direct relationships with providers, members and the community," Blue Cross said in a statement. "Amerigroup will be providing back-office services and sharing its extensive knowledge and experience with Blue Plus in order to improve our offering in the market."

In 2016, Blue Cross of Minnesota posted net income of $103.4 million on about $12.1 billion in revenue.

Anthem, which operates Blue Cross Blue Shield health plans in several states, posted net income from continuing operations of $2.47 billion on $84.86 billion in revenue in 2016.

Christopher Snowbeck • 612-673-4744 Twitter: @chrissnowbeck