Your questions answered:

How are cost levels determined for my primary care clinic and why do they change?

The rising cost of health care is hot topic in the U.S. Insurance is expensive because health care is expensive. One of the benefits of working for the State is our Minnesota Advantage Health Plan, which is a highly competitive insurance package. Our Insurance team works year-round so we can continue to offer comparatively low rates combined with a broad network, and primary care clinic cost levels play a key role.

As a SEGIP member, you designate a primary care clinic that is responsible for managing your care, including referrals to most specialists. Clinics have one of four cost levels assigned to them. The lower the cost level, the less you’ll pay in out-of-pocket costs. This tiered system encourages you to get care with the most cost-efficient providers among a broad network, all while saving money for the State and all our employees.

How it works

Here is how we determine primary care clinic cost levels each year:

1. Claims review and initial assignment. 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.
2. Negotiations. Cost level assignments don’t end there. We notify clinics of their preliminary cost level assignment and give them the opportunity to reduce their fees. Some providers may make a deal to appear in a lower cost level. These negotiations allow clinics to be in the cost level they want to attract business, while allowing us to get the best possible rates for you and your family.
3. Ensuring access for all members. The Insurance team reviews the cost levels across the state to ensure members have access to care in a lower cost level. If there are no clinics with a cost level 2 or lower within 30 miles from worksites, a clinic with a higher cost level will be adjusted to a cost level 2.
4. Finalization. We present the list of clinics and cost levels to the unions. Upon approval, the clinic network is set for Open Enrollment. After that point, clinics still have the opportunity to buy down into a lower cost level for the next year, but the earliest that arrangement could take effect is March 1.

Keeping costs low

We complete this process on an annual basis to challenge health systems and clinics to offer competitive pricing and so we can keep costs low for the State and our members.

Do you know what cost level your primary care clinic is in? Make sure to check using the Find a Clinic tool.