A prominent Minnesota health plan operated by a major not-for-profit system is dumping its Medicare HMO program in some parts of the state.
Medica Health Plans, part of the Minnetonka-based Allina Health System, added its name last week to a growing list of insurers defecting from the Medicare risk business.
Medica's departure is ironic because Allina's executive officer, Gordon Sprenger, is prominent within the American Hospital Association, which pushed for expansion of Medicare managed-care through provider-sponsored organizations. Allina also owns or manages 19 hospitals.
Sprenger, the 1996 AHA board chairman, was unavailable for comment.
The departure of Medica's Medicare HMO from four Minnesota counties is "one more flashing yellow light" for providers wanting to get into the Medicare risk business, said Richard Wade, the AHA's senior vice president for communications.
A pioneer in the Medicare risk market, Medica has had its HMO since 1984.
Medica had to pull the plan out of four Minnesota counties, said Patricia Riley, vice president of government programs for Medica. Low reimbursement rates had made it impossible to contract with enough providers to meet HCFA's access requirements, she said.
"We are getting out of the Medicare risk contract business in counties where it is not viable," Riley said.
Four major clinic systems backed out of the HMO because of low reimbursement, Riley said. She declined to name the clinics. "If you don't have a network, you don't have a program."
The problem, Riley said, is that changes haven't been made to address the geographic inequity in Medicare reimbursements.
Effective Jan. 1, Medica's SeniorCare Medicare HMO no longer will be offered in low-population Carver, Dakota, Goodhue and Scott counties. It will remain in the larger Anoka, Hennepin, Ramsey and Washington counties.
About 10,000 enrollees will be affected by Medica's exodus. That figure includes some enrollees in counties where the plan will remain, because a number of providers in those areas also are pulling out of the program, Riley said.
Displaced seniors can move to Medica's more traditional Medicare coverage plans or turn to competitors. Bloomington-based HealthPartners, for example, has a Medicare HMO.