Weekly Health Insurance Industry Highlights
Catch up on healthcare news and gain insights from our own industry gurus.
Patient access to healthcare is in the spotlight as newly insured consumers begin to seek care. We are seeing proposed rules and regulations to monitor access and adequacy that will affect provider networks and competition in the marketplace. Ensuring consumers have access to the information needed to make informed healthcare decisions will be vital to the success of the healthcare system. Without meaningful information, consumers cannot understand their purchasing decisions and the trade-offs that accompany those purchases – specifically how provider access influences price. If consumers lack transparent information and decision support tools, we can expect to see another round of backlash regarding restrictions on access. As provider networks continue to evolve, it will be increasingly important to keep consumers informed about their options to access care.
In their efforts to hold down premiums on the new insurance exchanges, many plans have excluded some or all of the nation’s most prestigious cancer centers from their provider networks.
The issue is likely to play out over the coming months as people who purchased the narrow network plans seek cancer care for the first time. Even many community oncologists included in local networks say the restrictions may limit their options.
Last month, the Obama administration issued proposed rules affecting provider networks in exchange plans. Under the rules, federal exchanges will scrutinize plans offered on the federal exchange to see whether they have enough hospitals and specialists in various fields of practice. While the exact nature of this scrutiny is unclear, insurance industry leaders have expressed alarm about being required to broaden their networks, which they said could drive up premiums.
More awareness of the growing importance of the provider network composition of exchange offerings and effectively informing consumers at time-of-purchase is paramount to ensuring further improvements to healthcare into 2015.
Experienced nurse practitioners in the state of New York will no longer need to be formally tethered to a physician in order to practice medicine starting Jan. 1.
The [Nurse Practitioners Modernization Act] was promoted as a way to preserve access for patients who may otherwise not be able to see a physician after previously uninsured state residents gain coverage through the health insurance exchange or expanded Medicaid.
We are going to see more of these types of adjustments to the traditional definitions of healthcare now that the consumer is front-and-center.
[South Carolina has] three insurance providers with plans on the exchange. Consumers’ Choice, BlueCross BlueShield (which has two plans) and Coventry, which was acquired by insurance giant Aetna last year, are the other two.
Spartanburg Regional, has a contract only with Coventry. It will accept patients with the other plans, but those patients must pay out-of-pocket expenses.
A Consumers’ Choice spokeswoman said the company had discussions with Spartanburg Regional, but has not been able to reach an agreement.
A BlueCross BlueShield representative said the hospital opted out of its exchange network.
Coventry spokesman Walt Cherniak said Regional is part of a high-performance network with the insurance provider. In a high-performance network, Coventry collaborates with one health care system, he said.
“The focus is on better management of a patient population across the health care system and increased member engagement,” he said. “It is designed to improve quality and deliver care more efficiently and cost-effectively.”
Cherniak said Coventry does not have an exclusive arrangement with Spartanburg Regional. Members who buy the CareLink Health Plus plans can obtain care from other doctors or hospitals, but for a cost.
Adrian Grimes, spokeswoman with Consumers’ Choice, said the company is transparent with customers, but agrees that there is still a lot of work to do with education.
“Our provider directory is on our website and we have summaries of plans online. We also have our customer service number available, and customers should call before they purchase,” she said.
Shalama Jackson, with the South Carolina Hospital Association, which oversees both Mary Black and Spartanburg Regional, said the health care market is changing.
“Could more insurance providers be added for Regional? It’s possible,” she said. “The networks that we have today may not be the networks we have next week or tomorrow. Contracts are still being worked out.”
The South Carolina Department of Insurance encourages people to know what providers are in their networks before they buy insurance from the exchange.
Carriers are still getting their new networks worked out; this kind of change is affecting everyone. But a dependable, third-party source for collecting, organizing and disseminating this information can help in keeping consumers aware of the changes as they happen.
A new report from the nonprofit group Health Access California offers a number of recommendations as Obamacare moves forward.
The report says California’s online health insurance exchange must improve its customer service. It needs to reduce call center wait times and provide a fully functioning search tool for people to see which doctors are covered under which plans.
Lost in Monday’s announcement by the CMS of 2015 Medicare Advantage rates was another significant decision it issued to allow consumers an opt-out option when their health plans narrow their MA networks.
The agency “is establishing a policy to allow enrollees to switch plans when they are affected by significant mid-year provider network terminations initiated by their Medicare Advantage Organization without cause,” according to a CMS fact sheet. This action was being taken “in response to comments from beneficiary advocates and some professional associations,” according to the fact sheet.
The CMS now will require plans to give 90 days’ advance notice of “any significant changes to their provider networks in order to ensure help compliance with provider access requirements.” It also established best practices to guide plans making significant changes to their networks.
This type of policy could have staggering ramifications for insurers if the ACA follows suit. The volatility within new narrow networks by far outpaces Medicare Advantage networks.
Health insurers are on the defensive over the way some provider networks for public exchanges are designed, leading to criticism that consumers buying coverage on the new marketplaces don’t have access to out-of-network care. States such as New York are pondering changes to exchange rules this month that would mandate out-of-network coverage, and the federal government on March 14 confirmed that CMS plans to increase monitoring of network adequacy in general and inclusion of providers for low-income populations in particular.
Against this backdrop, industry sources say there is an Alice in Wonderland-like quality about the scrutiny of provider networks on exchanges since they say consumer choice is the foundation of the new marketplaces. After all, they contend, narrow networks are in place to help make “affordable” coverage possible, notably for those previously uninsured. Carriers in many markets set up narrow networks with providers who agree to lower reimbursement in exchange for more volume. In some cases, however, these plans have left academic medical centers and other specialists out, which has raised the hackles of some consumers and triggered regulatory reviews.
As one insurance industry executive tells HPW, speaking anonymously, “if we don’t have the ability to offer a range of products at various price points with a full range of benefits, any limitation on that is something that we don’t want to do. It would be like telling Wal-Mart you can only sell toilet paper if it meets this standard.” And, the source adds, it is not like closed networks were born with the reform law; the concept has been around since the start of HMOs and is also part of the many accountable care organizations sprouting up all over the country. “It is a supply and demand market, even in the health insurance world, and the extent to which regulation limits consumer options and our options to meet consumer demand would just be unfortunate,” the source adds.
For some industry players, the idea that narrow networks or out-of-network practices are being questioned is a big drag on market development. “What it is, is a killer for the hope of price competition,” Mark Rust, office managing partner for law firm Barnes & Thornburg LLP in Chicago, tells HPW. “Because one of the key factors in introducing price competition as the health care delivery world evolves is going to be narrow networks. And the proof of that is the degree to which plans on the exchange quickly went to narrow networks to try to deliver to the market a more bare-boned cost product.”
Healthcare Payer News
Health plans must calculate what they will charge for 2015 exchange plan premiums despite the lack of detailed data from the just-ended enrollment window. Rate filing deadlines are fast approaching: May for some states and June for those using the HealthCare.gov marketplace.
The following four considerations will factor into insurers’ 2015 pricing:
1. The risk pool may differ somewhat.
2. The risk mitigation program – risk adjustment, reinsurance and risk corridor – continues but at lower funding in 2015
3. Narrow provider networks were a key reason 2014 exchange rates ended up lower than most had predicted, and will continue in 2015. “It is harder to distinguish how much of the rate reductions were due to the introduction of a narrow network versus market positioning and market competition,” O’Connor said.
Some narrow networks are valued-based, high performance networks that deliver high quality care and try to minimize cost. Others may just offer incidental value depending on the providers, although they can be an underwriting tool to attract healthy people.
Consumers are becoming more aware of narrow networks, but they don’t yet have the tools to evaluate plan and network differences. “Over time, value networks will win out because word will get out,” O’Connor said. “We will see more and more value networks being created, even going into 2015.”
4. Insurer positioning next to the lowest rates is an important strategy to be competitive.