Hundreds of children in Minnesota could soon have a harder time getting healthcare because of a contract dispute between a payer and a provider.
PrairieCare, a Brooklyn Park-based operator of mental health hospitals and clinics, announced that, on Oct. 20, it will sever ties with Medica, a not-for-profit insurance company that serves an estimated 1.5 million customers in Minnesota and surrounding states.
PrairieCare claims the Minnetonka, Minn.-based insurer restricts when children can get care.
Medica, however, claims that patients, on average, stay at PrairieCare facilities three days longer than at other hospitals and the cost to care for them is 150% higher. PrairieCare is asking for a rate increase in its next contract.
Medica's behavioral healthcare network is maintained and managed by Optum, a highly profitable consulting and technology services arm of insurance giant UnitedHealth Group.
PrairieCare CEO Dr. Joel Oberstar was quoted in the announcement (PDF) as saying that only 20% of the system's patient population was covered by Medica, but its utilization-review staff spent 80% of its time...fighting to get authorization for critical psychiatric care."
Medica spokesman Larry Bussey says PrairieCare's patients are expensive to cover and that the health system is asking for rate increases of "200% to 300%.”
PrairieCare Chief Development Officer Todd Archibold said his system's lengths of stay were justified given the complexity of the children and adolescents they take care of. “We can't cure suicidality in five days,” he said.
Archibold added that PrairieCare rates are in line with other charges he sees on the Minnesota Hospital Association's Price Check website, though he acknowledges that PrairieCare declines to post what it charges.
PrairieCare just opened a 50-bed hospital on Sept. 8 which involved transferring the licenses (ODF) for the 30 existing beds at its Maple Grove Hospital.
Archibold noted that PrairieCare sees about 7,000 unique patients with about 1,800 receiving hospital-based care. Medica covered between 360 and 370 last year, but he projected the total would be about 500 for 2015.
Neither side has come off well in the dispute, but Bussey hopes an agreement can still be reached.
“It's not unusual to reach an impasse like this but, typically they get resolved,” he said. “But not always.”
Bussey acknowledged that access to youth psychiatric beds in the state is “tight,” and Medica is willing to “make exceptions” and cover patients at PrairieGrove facilities.
But, he noted, PrairieCare was the party “that made the decision that they're not going to go any further (in negotiations) and to withdraw from the network.”
Correction, September 16, 2015:
This story has been corrected to identify PrairieCare as requesting a rate increase.