By Jeffrey Jackson, Owatonna People’s Press

 

OWATONNA — Medicare patients with Blue Cross Blue Shield may find themselves paying more — in some cases much more — out-of-pocket expenses for medical care provided at Owatonna Hospital or seeking care in another hospital altogether beginning in 2019, thanks to a decision by Blue Cross Blue Shield, say hospital officials.

The reason for the change, said Dave Albrecht, president of Owatonna Hospital, is the decision Blue Cross Blue Shield of Minnesota to exclude the local hospital from its Medicare Advantage provider network. The decision that could impact not only where Medicare patients can receive hospital care and how much that care will cost, but also the doctor-patient relationship and even the financial strength of the Owatonna Hospital itself, Albrecht said.

The decision by Blue Cross Blue Shield to take the Owatonna Hospital, as well as the hospital in New Ulm — Owatonna’s sister hospital in the Allina Health group — out of the provider network came as a surprise, Albrecht said. He learned of it Oct. 4, a scant 11 days before Medicare’s open enrollment was scheduled to begin.

“I have no idea why Blue Cross has done this, as it has nothing to do with contracts or rate negotiation that I am aware of,” Albrecht wrote in an email to area insurance agencies this week.

Open enrollment for Medicare begins Monday.

Specifically, Blue Cross Blue Shield’s decision pertains to the insurance carrier’s Medicare Advantage products, part of Medicare Part C. Medicare Advantage plans are offered by private companies, such as Blue Cross, that contract with Medicare.

The plans differ from the original Medicare, known as Medicare Part A, which covers hospital expenses, and Part B, which covers services covered by medical insurance such as doctor’s office visits, lab work, outpatient surgery and preventative services. Medicare Advantage plans must offer the same coverage as the original Medicare, with a few exceptions, but are able to offer additional benefits, such as vision, dental and hearing services, that are not covered in the original Medicare. The premiums paid by the insurance recipient are set by the individual insurance companies.

The insurance companies that administer the Medicare Advantage plans can also determine which medical facilities are “in network” and which are not. An in-network provider is an organization, such as a hospital or a lab, that has negotiated with the insurance company to provide medical services to plan members for a certain cost. That cost is usually lower — often much lower — than the amount charged people outside the plan.

A patient with a Medicare Advantage plan would pay a lower deductible to go to a hospital that is in-network compared to one that it out-of-network. Or another way of looking at it is to say that a Medicare Advantage patient may opt to go to a hospital that is out-of-network, but he or she should be ready to pay more — perhaps thousands of dollars more — in out-of-pocket costs.

And that, Albrecht said, is precisely what will happen to patients here who have Blue Cross Blue Shield Medicare Advantage plans but still want to utilize the services of Owatonna Hospital.

“They can still come to the emergency room, but if they need more services, they are subject to higher out-of-pocket costs,” said Albrecht.

That leaves the Medicare recipients, many of whom are on a fixed income, with a difficult choice, Albrecht said. Either they can use the services of Owatonna Hospital, which will cost them thousands of dollars more because it is not in-network, or they can choose a hospital that is in-network, but much farther away from their home, their family and even their primary care physician if that doctor remains in Owatonna.

On Friday afternoon, Jim McManus, the director of public relations for Blue Cross and Blue Shield of Minnesota released a statement saying that Blue Cross is offering a Medicare option in southern Minnesota that does provide access to Owatonna Hospital.

The option, however, is not part of the Blue Cross Medicare Advantage, but is a Medicare Supplement plan. A Medicare Supplement plan, sometimes called a Medigap plan, is a plan offered through a private insurance company, in this case Blue Cross, that helps “fill the gaps” by paying some hospital and medical costs that original Medicare does not cover.

As far as Blue Cross’ Medicare Advantage plans, McManus acknowledges that in southern Minnesota the plans “do not include access to Owatonna Hospital,” meaning that the hospital is not in-network.

“For our Blue Cross Medicare Advantage plans, seniors in the Owatonna area have access to a more focused network of providers that are part of a regional network for southern Minnesota,” McManus said in the statement.

The providers are Mayo Clinic Health System, Mankato Clinic, Northfield Hospital and Clinics, Olmsted Medical Center, St. Elizabeth’s Medical Center, Winneshiek Medical Center, Winona Health and United Hospital District. Missing from the list is Owatonna Hospital.

The situation is complicated by the unusual, if not unique, relationship between the hospital and Mayo Clinic Health System – Owatonna. An elderly patient who sees his or her doctor at the clinic would no longer be able to simply move easily between the clinic and the hospital — which, of course, are connected — without incurring those higher costs. Or, if that same patient opted to go to another hospital that was in-network — the Mayo hospitals in Rochester and Mankato or Olmsted County Medical Center, also in Rochester, to name a few — not only would they be at least 45 minutes away from Owatonna, but they would be 45 minutes away from their doctors.

“It could be an oversight,” said Albrecht, adding that it is possible that Blue Cross Blue Shield of Minnesota doesn’t know of the relationship between Mayo and Allina in Owatonna.

In his letter to the area insurance agencies, Albrecht addressed the potential impact of the Blue Cross decision on the Mayo-Allina relationship in Owatonna.

“Owatonna Hospital, part of Allina Health, and Mayo Clinic Health System in Owatonna have partnered for many years to build an excellent medical delivery system for the residents of Steele and surrounding counties,” he wrote. “Blue Cross, through its decision, is tearing apart years of hard work, much of which will not be easily recovered.”

But beyond the impact that the decision by Blue Cross Blue Shield may have on patients and physicians, there is a potentially large financial impact that it will have on the hospital itself.

According to figures from the federal Center for Medicare and Medicaid Services that were released by Owatonna Hospital, in 2018, about 59 percent of all individuals from Steele County enrolled in Medicare managed care plans are enrolled in the Platinum Blue Core Plan of Blue Cross Blue Shield of Minnesota, with the remaining 41 percent enrolled in one of six other plans provided by six other insurance providers — Group Health Plan, Humana Insurance Company, Medica Insurance Co., Sierra Health and Life Insurance Co., South County Health Alliance and UCare Minnesota.

The percentage of Medicare Advantage patients enrolled in Blue Cross Blue Shield from Dodge and Waseca counties — two other counties whose residents heavily use Owatonna Hospital — is even greater. In Dodge County, about 69 percent of Medicaid Advantage patients are enrolled in Blue Cross Blue Shield. In Waseca County, it is about 70 percent.

Overall, between the three counties, 64 percent of the Medicare Advantage patients are enrolled in Blue Cross Blue Shield.

If that number of Medicare Advantage patients chose to use another hospital that was in-network as opposed to Owatonna Hospital that, beginning in 2019, would be out-of-network and the financial impact would be great, said Albrecht.

“The guesstimated impact for 2019 would be $6 million to $8 million in revenue,” said Albrecht, who added that that would be more than 10 percent of the hospital’s projected net revenue for the year.

Such a significant loss of revenue, he said, would mean that the hospital would have no choice but try to make up for those losses by reducing costs. And that, he said, could mean downsizing.

“If there’s a big enrollment [in Blue Cross Blue Shield Medicare Advantage plans], we could be in big trouble,” Albrecht said.

Albrecht said he cannot remember a time when Owatonna Hospital was not in-network with Blue Cross Blue Shield of Minnesota, which, he said, makes Blue Cross’ decision to boot the hospital out of its provider network even more curious.

What’s even more odd, he said, is that the Blue Cross Blue Shield decision affects only Allina-affiliated hospital in southern Minnesota. Allina hospitals in the Twin Cities metro area will remain in-network. That includes Faribault’s District One Hospital, which is also an Allina Hospital but which also will remain in-network because Blue Cross considers it to be in the Metro area.

Albrecht said Friday that after a week of not hearing from Blue Cross Blue Shield despite several attempts, Allina — specifically, its Payer Relations department — had a discussion with Blue Cross that morning.

“The conversation was characterized as positive and maybe something could be worked out for the Owatonna and New Ulm markets, but no specifics,” Albrecht said in an email. “There will likely not be a resolution before open enrollment begins on Monday, and my skeptical side says there may not in fact be a resolution.”

In his Friday afternoon statement, McManus from Blue Cross acknowledged the ongoing conversations between Blue Cross and Allina.

“We agree that Owatonna Hospital, which is part of the Allina system, would be a valued addition to our Medicare Advantage network,” he wrote. “Blue Cross is in conversations with Allina regarding the hospital’s participation in that network.”

In the meantime, Albrecht’s letter to area insurance agencies asks the agents to inform their Medicare Advantage clients of the Blue Cross network issue and encourage those clients to consider insurance plans — he notes specifically Humana, Medica and UCare — that include Owatonna Hospital and Mayo physicians in their network.

“Enrollees will not have to leave the community or area for their care if enrolled in these alternative plans,” Albrecht wrote. “Please encourage enrollees to weigh their options and make an informed choice. I do not know the underlying premiums or coverage benefits of the alternative plans but it is certainly my hope people will find value and select a plan that includes Owatonna Hospital in partnership with Mayo Clinic Health System in Owatonna and Waseca.”