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Posted by on Apr 4, 2016 in Uncategorized | 0 comments

Exploring Network Transparency

Exploring Network Transparency

How do you provide meaningful information to healthcare consumers about the provider networks available to them? The first thing most people shopping for health insurance will ask about a provider network is, “Is my doctor in network?” The ability to answer that question–using a clear and concise method–is the first step in network transparency.

The next question that must be addressed is, “How much choice will I have when selecting a new doctor within the network?” This is the question CMS is looking to answer in their introduction of network transparency focusing on network breadth or strength.

Download the PDF, Exploring Network Transparency, to get all the details about our preliminary analysis.

 

Summary

The federal government is adding standardized “network breadth” ratings to Healthcare.gov. Essentially, the network breadth ratings will be a measurement of network strength based on provider counts in a given county. This information will be made available to consumers on Healthcare.gov during the plan selection process.

We decided to take a deep dive into what the rating method looks like when applied in the real-world. In our preliminary analysis, we used sample network data from the 2016 Strenuus Exchange Bundle. In our evaluation, we calculated county-level PPRs for four provider type groups: Hospitals, Individuals, Primary Care Providers, and Specialists. We then calculated aggregate means and standard deviations for the four provider type groups in order to determine the network classification ranges for each group.

Assumptions

We made several assumptions where CMS has not yet provided sufficient detail about how the ratings will work.

Identify Specialty Type Specialties

We assume that CMS will define which specialties fall under the specialty types of hospitals, adult primary care, and pediatric primary care. In our preliminary analysis, we used the Strenuus standard definitions for these provider types.

Clarify Methodology for Defining Classification Ranges

The PPR is obviously meant to be calculated at the county level. When mean and standard deviation are mentioned, there is no indication that CMS is broadening the focus to all counties, although not doing so would provide uninformative results. We assume that CMS intends an aggregate of all counties be used to define the categories.

Clarify how the Classifications will be Applied

We assume that CMS intends these classifications to be applied at the specialty type level because there is a great deal of variation across the provider participation of specialty types in networks.

Concerns

While we have made assumptions about details that need to be clarified, there are some very real concerns that need to be addressed before these ratings are provided to consumers.

Results for Hospitals are Skewed

The large majority of hospital networks provide access to all hospitals in a county, meaning the PPR equals one. This skews the results making it impossible for any hospital network to be categorized as broad.

Not Enough Information about Different Provider Types

Specialty Type Provider Information is Absent

It is key that a consumer understands the impact of their network choice if something happens to them outside of their normal visits to the doctor and they need to see a specialist. They need to ask themselves, “What will my options look like?” This is where the real value of network transparency lies.

Composite Ratings would Muddle Network Breadth

If CMS adopts a composite rating across provider types, it could mask the fact that a hospital network may be broad, while a physician network may be narrow.

A Consumer’s Perceptions will Differ from Reality

Classifications Need to Line Up with Consumer Expectations

In most instances, the total number of providers available in QHP networks is below that of the actual total number of contracting providers in a market. In order to truly provide network transparency, not only do all providers available for contracting need to be included but there also needs to be a method for classifying networks that is more in line with the consumer’s expectations of provider networks, which are based on what is available in the commercial market and not solely on what is available on the ACA’s public exchanges.

One and Two Network Counties Provide Unstated Markets

In counties where only one or two networks are available and thus set the “QHP Market,” the QHP Market could be well below that of the total market of available providers. This could make even the narrowest networks appear standard or broad. In counties where there is only one issuer, the network will have all of the providers available in the QHP-market and the PPRs for each specialty type will equal one. This means the network will automatically be labeled as broad (with an exception for hospitals).

Recommendations

It is clear that the PPR-based rating system for network breadth of QHPs proposed by CMS has some shortcomings that could significantly mislead the consumer. Wanting to avoid a simple “hit and run” evaluation of the proposed rule, we have several recommendations that would making the ratings more meaningful to consumers.

Include Specialists in Ratings

It is key that a consumer understands the impact of their network choice if something happens to them outside of their normal visits to the doctor and they need to see a specialist. We recommend CMS include a unique rating for specialty type.

Modify Hospital Network Categories

The vast majority of QHPs have a hospital PPR of 1.0. This skews the statistics so that the mean plus one standard deviation exceeds the largest possible PPR (100%) and no hospital networks are rated as broad. We propose modifying the calculation of the rating ranges by first removing all PPRs equal to 100%, and then applying the regular methodology to the remaining Hospital network PPRs, which are approximately normally distributed.

Use All Providers Available for Contracting

We believe that the best way to communicate information about the relative network breadth of QHPs is to rate them in the context of all providers available for contracting. Consumers have formed their understanding of what constitutes a narrow or broad network through their interaction with commercial health plans. Therefore, our “gold standard” for measuring QHP network breadth uses all contracted providers in both on-exchange and off-exchange networks for both the calculation of Provider Participation Rates and the calculation of mean and standard deviation for the rating ranges.

Set Rating Categories at the CBSA Level

We recognize that an aggregate mean and standard deviation may not be the most appropriate approach. We think it would probably be better to calculate separate means and standard deviations depending on the urbanization of the counties to reflect potential structural differences between networks in highly urban counties and rural ones.

Download the PDF, Exploring Network Transparency, to get all the details about our preliminary analysis.

 

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