Two more health systems with hospitals and clinics in Minnesota are going out-of-network in 2025 for certain Medicare Advantage health plans, pushing the estimated number of state seniors facing network disruptions next year to nearly 60,000 people.

Robbinsdale-based North Memorial Health, a two-hospital system in the Twin Cities metro, and South Dakota-based Avera Health, which operates three hospitals in southwest Minnesota, said they will drop out of the Humana network beginning Jan. 1.

The changes would mean higher out-of-pocket costs next year if seniors stick with Humana Medicare Advantage coverage and visit doctors at North Memorial and Avera Health.

Since July, three other health systems with Minnesota operations — Bloomington-based HealthPartners, South Dakota-based Sanford Health and Duluth-based Essentia Health — have said they'll go out-of-network next year with Medicare Advantage plans from Humana and/or Minnetonka-based UnitedHealthcare.

"We've never seen it this bad — never — where we've seen this number of providers that aren't going to take specific plans in 2025," said Kelli Jo Greiner, a health care policy analyst with the Minnesota Board on Aging. "There's just a lot of changes that are going to affect a lot of beneficiaries."

The network barriers could prompt seniors to move to a new Medicare Advantage insurer during open enrollment from Oct. 15 through Dec. 7.

There's been a sense for months that more health care providers across the country are dropping out of Medicare Advantage networks, although there aren't comprehensive figures, said Jack Hoadley, a health policy researcher at Georgetown University.

In Minnesota, the health systems all said they're leaving the Medicare Advantage networks because of onerous policies and slow processing times. Insurers, however, have pushed back on those arguments.

Negotiations on whether a health care provider will be in a health plan's network involve confidential financial terms, so there's no transparency about all the factors that drive disputes.

In general, analysts suspect health insurers might be pushing even harder to keep costs low because of changes in how the federal government pays Medicare Advantage plans.

In Medicare Advantage, seniors receive their government benefits through a private managed care company. The government pays insurers a set fee per enrollee with adjustments for the health status of seniors.

Last year, the federal Centers for Medicare and Medicaid Services said it would phase in changes to risk adjustment following allegations that some carriers were gaming the system. Carriers, while denying that any gaming occurred, said the changes are a hit to revenue.

"That may be leading to tougher negotiations with the hospitals systems, physician groups and so forth," Hoadley said. "That part of it, of course, is behind the curtain, so we can't directly see what's going on there. But that would be a guess as to what's happening and why some of these hospital systems are saying, 'Hey, we're not willing to negotiate a lower rate, we'd just rather be out of network.'"

Market power dynamics often come into play, said Cheryl Damberg, a health economist at the Rand Corp.

A large health system with a dominant market position might have leverage to hold out for higher rates, Damberg said, because insurers know they'll have a tough time attracting enrollees without that provider in the network. Conversely, health insurers use their size in a market when they can, she said, to keep rates lower.

In the Minnesota disputes, the five health systems said they're leaving networks because the Medicare Advantage plans have excessive rates of claims denials and payment delays. Damberg speculated that health care providers might be more willing to put up with these hassles if payments rates from the health insurers were higher.

"We've seen such significant growth in Medicare Advantage over the past four or five years, it now represents more than half the market," she said. "I don't know whether we've reached a tipping point where health systems could deal with some of the administrative hassles when Medicare Advantage was a smaller sharer of your book of business, but now that it's a very substantial portion it just creates too many headaches."

Avera Health said on Sept. 19 that it was dropping from Humana's Medicare Advantage network, saying long waits for prior authorizations from the insurer as well as denials of necessary services were creating troubles for patients. The move affects about 900 patients in Minnesota, according to the health system.

In early September, North Memorial sent notices about dropping from the Humana network to about 5,000 patients who indicated enrollment with the health plan within the past two years.

"Humana's application of onerous policies and procedures often require increased administrative resources compared to other health plans, due to staff members frequently needing to appeal coverage denials and negative payment adjustments," North Memorial said in a statement. "Additionally, decreased Humana network coverage makes referrals difficult, preventing our team members and providers from giving these patients the care they need and deserve."

Humana said in a statement that its goal is to help seniors receive affordable, high-quality care.

"When health systems demand significant rate increases during contract negotiations, which often far exceed rates for original, fee-for-service Medicare, it's important to understand that these requests will ultimately increase health care costs for patients," the insurer said. "Some health systems prefer to accept only patients in fee-for-service Medicare because it incentivizes ordering more procedures to increase their revenue, regardless of their value to patients."

Sanford Health raised concerns about payment delays and claims denials when it announced in August that the health system would go out-of-network with Humana next year. Sanford said it sent letters to nearly 10,000 Minnesotans about the change.

Essentia Health cited delays and denials in September when notifying about 14,000 seniors that it was dropping Medicare Advantage networks at Humana and UnitedHealthcare. HealthPartners said in July that its hospitals and clinics would leave the UnitedHealthcare Medicare Advantage network next year — a decision that will affect roughly 30,000 patients.

Essentia Health and HealthPartners said seniors in these Medicare Advantage plans won't be able to schedule appointments with their providers in 2025.

UnitedHealthcare said this week that it still hopes to negotiate terms so Essentia Health and HealthPartners will remain in-network options for its Medicare Advantage plan next year.