New coverage comes as insurers and hospitals seek business in federal health law under Supreme Court review.
Medica is adding Mayo Clinic Rochester and the network of Mayo clinics to its roster of in-network providers in southern Minnesota, a move that will bring more competition for health insurance into the region.
The expanded coverage will be available to residents in 22 counties who buy Medica's individual and family plans beginning July 1, the two parties announced on Thursday.
The partnership comes at a time when insurers and hospital systems are jockeying for position as the federal health law, now under scrutiny by the U.S. Supreme Court, promises to give more people access to health care -- and more choice about where they'll spend their health care dollars.
Medica, along with other insurers, already covers treatment at Mayo Clinic facilities for those who get health insurance through their employers.
But officials at Minnetonka-based Medica see the alignment with Mayo as a way to expand the market share of its individual and family plans beyond the 5,000 to 10,000 current members, said Dannette Coleman, Medica vice president for individual and family businesses.
The individual market is the fastest growing part of Medica's business, with half of its enrollment coming since 2009, she said.
Away from 'fee-for-service'
Mayo will be paid using an incentives-based approach that will encourage treatments that keep costs down and prevent patients from relapse or returning for expensive hospital stays.
Such arrangements are a tenet of the federal health care law, which aims to move hospitals and doctors away from traditional "fee-for-service" payments where clinicians get paid for doing more treatments rather than keeping people healthy.
Although this is a new payment arrangement between Mayo and Medica, it is not unique. Medica and other plans have crafted similar deals with Fairview, Park Nicollet, Allina and other hospital systems in recent years.
Mayo CEO Dr. John Noseworthy said in an afternoon news conference that Mayo's "patient-centered, team-based care ... by its very nature drives out waste, reduces duplication and overutilization of services, and that keeps costs down."
The increased competition into the southern part of the state comes as health plans prepare for an influx of new customers through the federal Affordable Care Act.
In February, Wisconsin-based Gundersen Lutheran Health Plan became the first new health plan to get licenses in the state in 14 years, and it is focusing on the same region of southern Minnesota.
Many health care systems and plans are trying to build name recognition by advertising directly to consumers, particularly those who may be shopping for individual coverage on health insurance exchanges.
Court ruling this month?
The Supreme Court is expected to rule on the constitutionality of the Affordable Care Act by the end of the month, but many of the state's health care leaders believe the idea of the exchanges will move forward no matter what the court decides.
Noseworthy has sought to widen access to the Mayo Clinic through its growing network of primary care clinics in Minnesota, Wisconsin and Georgia, as well as its specialty care hospitals in Minnesota, Arizona and Florida.
The agreement with Medica is limited to Mayo's clinics in Minnesota and the flagship clinic in Rochester, but is expected to expand in Minnesota and western Wisconsin.
Jackie Crosby • 612-673-7335