Essentia Health is dropping out of Medicare Advantage health insurance networks next year at UnitedHealthcare and Humana, moves that will impact about 14,000 seniors in Minnesota.

The Duluth-based health system's announcement Tuesday makes it the third large nonprofit with Minnesota operations to recently say it will break future network ties with a Medicare Advantage health plan, all citing concerns about coverage denials and payment delays.

While the effects will vary, seniors in Medicare Advantage plans generally see more limits on their access to out-of-network doctors, clinics and hospitals. In some cases, out-of-pocket costs are significantly higher; in others, out-of-network health systems won't schedule appointments for patients covered by the health insurers.

"When we looked at UnitedHealthcare and Humana, they deny and delay at rates more than twice [that] of our other Medicare Advantage plans," said Dr. Cathy Cantor, chief medical officer for population health at Essentia. The health system, in online notices to patients, also described "excessive" prior authorization requirements by the insurers, saying these rules can delay treatment.

The insurers responded Tuesday by saying they still hope to negotiate deals so Essentia Health stays in-network.

UnitedHealthcare said it recently extended its contract with Essentia Health through the end of 2024 for existing Medicaid, Medicare Advantage and employer-sponsored health plans.

As part of that extension, the insurer said in a statement that it "agreed to items on which we'd collaborate" — an apparent reference to Essentia's concerns about denials and prior authorization. But none of these issues was specific to Medicare Advantage, according to UnitedHealthcare.

"In fact, Essentia Health didn't raise concerns regarding its participation in our Medicare Advantage network until last week," the insurer said. "We have since met with Essentia on Sept. 9 and are committed to working with the health system to explore solutions with the goal of renewing our relationship. We hope Essentia shares our commitment toward reaching an agreement."

Essentia Health says it will remain in UnitedHealthcare networks next year for patients with employer-sponsored and Medicaid coverage in Wisconsin.

Humana said in a statement that it's "open to good-faith discussions with Essentia Health and the possibility of renewing the contract if it's fair to both sides."

"Humana strives to provide access to high-quality healthcare for our health plan members while minimizing out-of-pocket costs," the insurer said. "Humana maintains a network of high-performing providers that will help ensure our members continue to receive high-quality, effective, and affordable care."

Insurers and providers feud

Essentia Health, which operates 14 hospitals and 78 clinics across Minnesota, North Dakota and Wisconsin, said it's notifying a total of roughly 20,000 patients who've visited health system facilities in the past 18 months. More than half of those being contacted have UnitedHealthcare coverage, according to an Essentia Health spokesman.

Medicare Advantage plans are an increasingly popular option where seniors receive their government health insurance benefits through a private managed care health insurer. In Minnesota, enrollment in Medicare Advantage plans has grown considerably since 2019, a period that's also seen three large health systems — St. Cloud-based CentraCare, Minneapolis-based Fairview Health Services and HealthPartners — announce dropouts from the Humana network.

In late July, Bloomington-based HealthPartners said it was dropping from the network at Minnetonka-based UnitedHealthcare (UHC), which is the nation's largest health insurer.

Earlier this month, South Dakota-based Sanford Health said it would drop next year from the Medicare Advantage network at Humana, which is large health insurer based in Kentucky.

The network exits announced by Essentia, Sanford and HealthPartners won't take effect until Jan. 1, so patients won't see any change for the remainder of this year in their access to doctors, clinics and hospitals.

In the HealthPartners dispute, which impacts about 30,000 seniors, UnitedHealthcare has called the health system's allegations about excessive delays and denials untrue, "outlandish" and part of a push by the health system for excessively high payment rates.

With Sanford Health, where about 10,000 Minnesota patients are impacted, Humana officials said the health system's complaints about payment delays and denials had not been voiced previously in contract negotiations.

Both UnitedHealthcare and Humana said they hope negotiations would re-start to keep HealthPartners and Sanford Health, respectively, in network next year.

The effect on seniors

The consequences for seniors when health systems go out-of-network have been described differently in the recent spate of announcements, with insurers and providers offering alternative takes.

Seniors covered by Humana and UnitedHealthcare will still have access to emergency rooms within Essentia Health, the health system said, but won't be able to schedule appointments at Essentia.

In its dispute with HealthPartners, UnitedHealthcare has suggested seniors might still be able to use out-of-network benefits at the health system. HealthPartners, however, has said this is not true, insisting the insurer's subscribers won't be able to schedule appointments next year at clinics and hospitals operated by the health system.

Sanford Health says Humana subscribers will be able to visit its facilities next year on an out-of-network basis, which likely involves more out-of-pocket spending.

In the online notices, Essentia says seniors with a Humana or UHC Medicare Advantage plan can switch to a new insurance option during the annual open enrollment period, which runs from Oct. 15 through Dec. 7. Alternately, patients can keep their Humana or UHC insurance and opt to see different in-network providers.

This decision can be more complicated, however, for seniors in a Medicare Advantage plan that's offered as a retiree benefit, since subsidies from former employers might not be available for seniors who switch plans. Seniors with retiree benefits "are encouraged to contact your former employer for information on group options," Essentia Health said in online materials for patients.

Essentia Health says it posted letters about the change in online patient charts on Monday. Letters are being mailed to seniors this week, as well.

A small number of UnitedHealthcare Medicare Advantage patients with certain conditions will be able to schedule appointments for next year, Essentia officials say, but only for a limited time under continuity-of-care provisions.

Essentia Health was the eighth-largest nonprofit group in Minnesota in 2022, with revenue that fiscal year of $2.62 billion.

"This was not a decision we made lightly," Cantor said in a news release issued Tuesday by Essentia. "The frequent denials and associated delays negatively impact our ability to provide the timely and appropriate care our patients deserve."