The Free Press, Mankato, MN

Local News

February 27, 2014

Mankato Clinic regains state insurance price tier

Clinic lost about 2,000 patients to Mayo

MANKATO — The Mankato Clinic estimates it lost roughly 2,000 state employee patients when the state put them in a category of coverage that was more expensive than its competitor.

But now, after renegotiating contracts, the Mankato Clinic is back to the price tier it was in before it was recategorized with the three insurance carriers available through the Minnesota Advantage Health Plan, the health insurance program for state employees that offers plans from Preferred One, Blue Cross Blue Shield and Health Partners. The change will take effect Saturday.

Mankato Clinic CEO Randy Farrow said the clinic’s decision to make further cuts in prices was prompted in part by the number of patients they heard from who wanted to stay with the clinic but couldn’t afford to pass up cheaper rates elsewhere.

“We were kind of frustrated this time around with the process,” Farrow said. “We didn’t think it was very transparent with the data and why we were being placed in a higher tier.”

At the same time the Mankato Clinic was renegotiating (which is common; renegotiating takes place every two years), so was Mayo Clinic Health System. But while Mayo was in tier 4 for Health Partners and Blue Cross Blue Shield, it received a tier 2 designation with Preferred One. This prompted about a third of the employees to go with Preferred One and switch to Mayo.

Farrow said the clinic served roughly 6,500 state employees before the tier changes. After the changes — where the clinic got moved up to a costlier tier for state employees who chose Preferred One while its main competitor, Mayo Clinic Health System in Mankato, went down to a cheaper tier 2 — about a third of the employees left, most going to Mayo.

We learned a lot through the process, got some of our state representatives involved,” Farrow said.

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