With the proliferation of narrow networks being rolled out as a cost-containing effort on health plan costs, the Obama administration and state insurance commissioners are vowing to more closely scrutinize such networks amid consumer concerns of limited choice of doctors and hospitals and potentially surprising out-of-network costs.
The New York Times reports that federal officials are developing new standards that would work similarly to how Medicare Advantage plans are overseen, and would help determine whether they have adequate physician networks. Narrow networks are expected to provide care for some 16 million Medicare beneficiaries out of the 54 million total.
State’s will be able to adopt additional standards on top of any federal guidance, as well, and some are already doing so.
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“I heard from many consumers who were upset to find their health plan no longer included their trusted doctor or hospital,” Mike Kreidler, insurance commissioner for Washington State, told the Times. “Some people discovered this only after they had enrolled.”
Similarly, New York state adopted a law that says physicians must notify patients which insurance plans they will accept, and if an insurer does not have an in-network physician to treat a condition, they have to tell the patient they can go out of network at no added cost.
Some networks are so limited, or narrow, that it forces consumers to look outside of what’s available for care, causing a spike in uncovered costs.
Narrow networks, or skinny networks, are often cheaper, so consumers often select the plan based purely on price. As such, the National Association of Insurance Commissioners is updating its model to add additional consumer protections.
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Kristin E. Binns, a vice president of WellPoint, told the Times that Anthem Blue Cross is “working to improve the accuracy of its provider directory.” It has added more than 3,800 physicians to its California exchange network, she said.
Stephen Shivinsky, a spokesman for Blue Shield of California, told the Times: “There was definitely confusion in the marketplace. The front-office staff in many doctors’ offices were also confused about what networks they were in.”
The federal government is familiar with ensuring network adequacy for Medicare, with standards specifying the minimum number of primary care and specialty physicians for a Medicare Advantage plan. It depends on factors such as the population and population density of a given county, for example. Other factors include maximum travel distances in both rural and urban areas.
The Times says insurers are weary of overly bearing federal mandates, noting that premiums on exchange plans were lower than expected because of narrow networks, and that consumers should be given the choice if they want to opt for more thorough network coverage.
CMS, which is overseeing the federal exchange HealthCare.gov, is increasing its review of provider networks. The deadline for insurance carriers to offer plans in the federal exchange next year was June 27.
Applications had to detail every doctor, hospital and pharmacy in their networks, and CMS is now viewing those applications for adequacy in the same manner Medicare Advantage plans are viewed.
Software developed by Wisconsin-based Quest Analytics is being used by both CMS and many insurers to measure distances between providers in certain areas.
Hospital systems, mental health providers, oncology and primary care are among areas that the Obama administration said it would be closely watching for network adequacy.
