Medtronic is striking a first-of-its-kind agreement with Minnesota's largest health plan in which the device maker will pay back the insurer if patients using a specific Medtronic diabetes device don't see their blood sugar levels stay within an acceptable range.

The "value-based" arrangement, to be unveiled Monday, is designed to make it easier for Blue Cross and Blue Shield of Minnesota members to obtain and use a Guardian Connect continuous glucose monitor from Medtronic.

The agreement requires Medtronic, which has operations headquarters in Fridley, to pay rebates to the Eagan-based Blue Cross insurer if its members with diabetes who receive Medtronic's Guardian Connect device fail to keep their blood sugar levels within a targeted range for a specific period of time while using the device. Patients who participate in a Medtronic user-engagement program called the Inner Circle can earn up to $300 a year to offset the cost of the monitor and sensors.

"This is the first time we are entering into a value-based agreement that has as its primary metric achievement of [a plan member's] time-in-range. That means being in a very healthy range for their glucose," said Suzanne Winter, vice president for the Americas region of Medtronic's diabetes group.

The insurer is reclassifying the device as a pharmacy product instead of durable medical equipment, which means that some Minnesota Blue Cross members with traditional copay plans will pay less for the Medtronic blood monitor and disposable sensors. That's because members often reach out-of-pocket spending caps for drugs long before they hit personal spending caps on medical equipment.

"Our two organizations really came together to partner on a novel approach to impact the health of our … insulin-dependent diabetic members, where they are going to have access to this newer, continuous glucose monitoring technology," said Dr. Mark Steffen, interim chief medical officer at Blue Cross and Blue Shield of Minnesota. "Not only are they going to have access to the newest technology, it's going to be easier to get the technology because it's on their pharmacy benefit."

Diabetes is a blood sugar disorder that takes two main forms. Type 1 diabetes is an autoimmune disorder in which the body can't make insulin to consume blood sugar, while Type 2 diabetes (the more prevalent form) means a person can't effectively use the insulin they make.

Having too much blood sugar because of diabetes can lead to long-term health problems including skin infections, eye problems and nerve damage. Having too little blood sugar can lead to short-term problems like shakiness, headaches, confusion and loss of consciousness, which can be especially problematic if the person is doing an activity like driving when the "low" hits.

The American Diabetes Association estimates that the disease affected 1 in 11 Americans in 2017 and accounted for $237 billion in direct medical costs, including an average of $9,600 per person in medical expenditures just for their diabetes care.

Diabetics use disposable blood-test strips or body-worn continuous glucose monitors (CGMs) to keep a close watch over their blood sugar levels and make adjustments as needed, whether it's a quick infusion of sugar or a dose of the drug Glucagon when blood sugar is low, or doing exercise and injecting insulin when glucose goes too high.

Blood sugar is affected by such a wide range of factors that Medtronic teamed up with IBM Watson to apply artificial intelligence to the problem. The result is the Guardian Connect's Sugar.IQ app, which analyzes blood data and personal habits to come up with "personalized insights" that can help make good decisions in real time. Separately, the Medtronic CGM also uses predictive alerts to tell a user when their blood sugars are about to soar or plunge.

Minnesota Blue Cross members will also get access to Medtronic's Inner Circle program for CGM users, which uses social and game-design elements to create personalized challenges and social support for diabetics, with the goal of keeping blood sugar in a range between 70 and 180 mg/dL.

The Guardian Connect is one of several CGMs approved by the Food and Drug Administration for sale in the U.S.

Others include Abbott Laboratories' FreeStyle Libre, DexCom's G5 and G6 CGMs, and Senseonics' Eversense system. Each of the systems is capable of transmitting data to apps on mobile consumer devices. The Guardian Connect, the G5 and the Eversense require calibration with a fingerstick every 12 hours, while the FreeStyle Libre and G6 do not.

Dr. Anders Carlson, medical director of the Park Nicollet International Diabetes Center in St. Louis Park, said he thinks every person with diabetes could benefit from using a CGM.

But he also said it's not enough to simply put a CGM into a patient's hands. A recent study examined 22,700 patients with Type 1 diabetes and found a rise in CGM use was not correlated with an overall improvement in the three-month blood-glucose measurement called HbA1c. Patients in the study weren't restricted to any particular CGM system, and they had varying levels of engagement with the devices.

"The studies are pretty clear that the benefit of these devices correlates with how often you use it," said Carlson, who is not involved in the Medtronic-Blue Cross announcement.

Medtronic promotional materials cite clinical study data presented at a 2018 conference in Vienna showing that people who used the Guardian Connect's predictive alerts feature experienced fewer events of high blood sugar 39 percent of the time, vs. having fewer high events only 10 percent of the time without using the alerts.

Minnesota Blue Cross officials said the announcement with Medtronic does not mean it is eliminating other CGM devices from the plan. But the Medtronic device is the only one that is being reclassified to a pharmacy benefit.