Rural Health

MMB vs. MDs

Patients lose, who wins?

BY Christopher Wenner, MD

This outsourced administration applies to its health insurance and it may pose many conflicts of interest. In 2024 only two vendors will provide health care insurance administration and one of them is Blue Cross Blue Shield of Minnesota, helping to process claims for more than 165,000 state employees. With this volume, MMB is the largest purchaser of health care in the state and this expense accounts for a significant portion of the state’s budget. MMB is in a unique position in that they purchase care from clinics for their employees with taxpayer dollars but have no accountability to anyone for how they spend these vast sums. They do not release data to justify their purchase decisions or show they are being made with the public good as a driving force. They did manage to release a white paper in which they stated, “As stewards of taxpayer dollars, we are always seeking opportunities to enhance affordability for the State as well as for employees and their families,” yet their actions blatantly belie this goal.

Despite its mandate and exhortations, MMB ignores the lowest-cost providers in the state and actively funnels patients to high-cost, high-volume providers.

Fiscally mandated switching of primary care providers is nothing short of governmental malpractice.

A Tiered System

In something most closely resembling a shell game, MMB employs what they call cost-level assignment, or tiering to all primary care clinics in the state. This anachronistic gatekeeper model purportedly saves the state funds and very effectively drives patients toward select clinics. The higher the numerical tiering, the more cost is shifted to the patient in terms of out-of-pocket copays and total annual deductibles. A tier one clinic will cost a patient much less out of pocket than a tier-four clinic, which not unexpectedly directs an overwhelming majority of patients to lower-tiered clinics. MMB states that it has performed a “rigorous analysis” of SEGIP claims to determine the tiering. Evidently, its own accountants were not sufficient, and a national consulting firm was required to add an additional layer of complexity to the process. Said methodology, in theory, roots out the high-cost providers by assigning a higher, less favorable tiering. There may be a sliver of truth in the results of this mechanism, but the results are far from true. Clinical outcomes and patient satisfaction do not seem to calculate into the tiering process.

Integrity Health Network (IHN) is a clinically integrated, independent physician association with primary-care member clinics in Minnesota and Wisconsin. For decades it has championed the independent practice of medicine in a largely out-state service area. Its goals have always been centered around quality improvement, total cost of care and care continuum initiatives. IHN is accountable to its patients and has data, provided by several commercial payers, indicating its clinics risk-adjusted total costs are 30% less than the costs attributed by MMB. Other data sources, including Minnesota Community Measurement, corroborate this assertion. One would think this would garner favorable tiering and even accolades for cost containment, but the opposite has proven to be the case. These low-cost clinics were all lumped into tier 4. To be clear, physicians receive the same reimbursement per CPT code in any tier, it’s just that the patients pay more for the same code based on tiering. In the grandest sense of operating a banana republic with your tax dollars, MMB has caused patients to flee, en masse, to lower tiered, “lower cost” clinics. The tiering system can mean the difference between an annual deductible of $1,700/$3000 and $3,600/$7,200 (individual/family). Individual co-pays can vary by hundreds of dollars for the exact same service.

State employee families who elect to stay with high-tiered clinics are penalized with higher co-pays, deductibles and out-of-pocket expenses. Many of these families have long-standing relationships with their providers and accept the increases because they know where they will receive the best care: their established clinic. Established relationships and the resultant trust between patients and their primary care clinics promote open dialogue, shared decision-making and far less over consumption of resources. Fiscally mandated switching of primary care providers is nothing short of governmental malpractice.

Data Analysis

MMB does post some data on how tiers are determined. They state: “Our insurance team compares recent medical and pharmacy claims for each clinic from the previous year (to ensure member privacy, the data is de-identified). We calculate each provider’s total cost of care, which includes their own prices, services provided, referral patterns and more. Adjustments are made to ensure that clinics that have sicker patients are not penalized. The most cost-efficient clinics are placed in cost level 1, which has the lowest out-of-pocket expenses for members. This rewards clinics for managing the total cost of care for our members. From there, clinics are placed in cost level 2, cost level 3, and finally, cost level 4, which contains providers with the highest total cost of care in the area.”.

MMB cites that clinics not affiliated with large health care systems are grouped regionally “to develop credible claims experience”. Such is the case for the independent clinics noted above. It is also blatantly false. A clinic that is affiliated with a critical-access hospital is going to have a much higher total cost of care compared with a clinic that has options regarding hospitals and ambulatory surgical centers. Lumping all non-systems-based clinics into one pool and calling that “credible” is anything but. This situation demands a full investigation with full public reporting. Laziness is a charitable explanation and the public deserves better stewardship of its tax dollar.

MMB has caused patients to flee, en masse, to lower tiered, “lower cost” clinics.

Presumably, because they care about kids, MMB has assigned tier 2 status (remember, lower is better) to all pediatric clinics throughout the state. What they refuse to recognize is that family medicine practices provide over 20% of pediatric care statewide—certainly much higher in rural communities with a paucity of pediatricians. Perhaps kids in small towns are not as important as their urban cohorts (or perhaps, those who pull the strings of MMB do not live in rural areas).

The Minnesota Department of Human Services certifies a model of primary care clinics in the state called Health Care Homes (HCH). These HCH certified clinics are high touch and heavy on care coordination. Patients love them. In fact, consumers of the Minnesota Health Advantage Plan really love them: SEGIP polled their members and 85% preferred to receive their care at a certified HCH clinic. It would appear as though MMB is not interested in the opinions of said members, applying arbitrary tier 4 tiering to foundational HCH clinics. It is a classic example of the state vs. the state where on the one hand Minnesota creates the HCH model, which was painstakingly developed over many years, with great expense and great success, and then punishes it with the other hand. It is difficult to imagine who wins in this scenario, not the patients or taxpayers and not the independent physicians in their communities who are providing them the highest level of care.

Talk to the Hand

MMB has a rote response to any concerns about unfair/misapplied tiering: “up front reimbursement reduction” (Read: buy down to an acceptable tier ). Even accepting this banana republic mentality, MMB can still simply reject the buy down for no reason. For an independent family medicine clinic to buy down to a cost level 2 status — the same tiering as the system clinic down the street — they must agree to a 28% reduction in reimbursement for services provided. Recall this independent clinic is already 30% less expensive than the system clinic via prudent resource management, appropriate referrals and lean staffing. Now they are asked to cut their reimbursement by one-third. No business can survive that sort of cut to its margins. Unless, that is, your business has not-for-profit status, and your annual surplus exceeds hundreds of millions of dollars. .

Legislators, apparently, have no jurisdiction over MMB. For unclear reasons, legislators who have asked questions pertaining to the above are met with an impenetrable parry. “Getting the Heisman” (not the award, but the stiff arm of the runner represented on the trophy) is how one legislator described his dealings with MMB. Why is this? If the lawmakers are not in charge, who is? Is MMB above the law, or do they make it up as they go? It is unclear what input the governor has, though he can clearly appoint a new and perhaps more fair and open-minded MMB commissioner. It is beyond the scope of this article to speculate on the motivations behind MMB decision making, but clearly they are running afoul of their own guiding principles.

If the legislative and executive branches of our state government have limited authority over this organization, perhaps it is time to have the courts weigh in. As they are generous with national consultants, MMB must have a top-flight legal firm on retainer for such instances. Perhaps, more expeditious and certainly more economical than legal action, this article will generate interest from a local news outlet and the ongoing taxpayer mismanagement will be brought to the attention of the voting public.

Independent medicine provides an important counter lever to the hegemony of large health systems. It has repeatedly demonstrated its ability to provide low-cost, high-quality care to the State of Minnesota. This egregious slight-of-hand, favoring only the large systems, puts independent clinics at risk, as well as the health of Minnesotans. The time has come to look inside the black box of MMB and find out why they waste millions every year on policies that penalize patients and do not promote low cost, high quality care.

Christopher Wenner, MD, is chief medical officer for Integrity Health Network.