doctors

Two More Lawsuits Over Narrow Networks

Despite the fact that narrow networks continue to come under fire, we believe they will remain an integral part of the fabric of health plan options.

Narrow network strategies are employed by carriers as a means to control costs, offer lower-priced health insurance options, and still comply with new provisions of the Affordable Care Act such as medical loss ratio requirements and qualified health plan actuarial values. The rub with narrow networks is that while narrow networks can help lower premiums, they can also limit choice, access and potentially even quality.  Plus, despite lower rates they can ultimately cost individual patients a lot more.

Lawsuit form with a stethoscope

In the cases of these newly reported lawsuits, some docs that were originally listed as participating were dropped from the network. Patients were then faced with very high and unexpected medical bills from the newly out-of-network docs. Some enrollees sued the insurance companies claiming that the carriers failed to let them know that the docs were no longer participating.

For some, narrow networks can be the right choice, e.g. those who focus on monthly premiums above all else. While we believe that to be true, we’ll continue to bang the drum loudly that before selecting a narrow network plan, buyers need to do their homework. Know who is in the network and re-confirm participation before seeking care whenever possible.

Read Consumer Group Sues 2 More Calif. Plans Over Narrow Networks from The KHN Blog.

Keep Your Doctor? Your Preferred Hospital? Do Your Homework Before Selecting A Plan.

With healthcare reform and the Affordable Care Act almost in full bloom, more potentially game-changing unintended consequences are starting to emerge.  One such consequence stems from the introduction of “narrow networks.” Initially intended for healthcare.gov or Exchange based products, most carriers have utilized the narrow networks to round out the low end of their 2014 individual and employer sponsored group plan offerings.

Employers changing plans in 2014 will have to pay closer attention to network selection. Or, potentially pay the price when you or your employees learn that preferred, familiar, closest and, in some cases, the best doctors and hospitals may not be in your plan’s network.

Until now, network size has not been a huge determinant in selecting carriers and plans. Most of the major insurance companies in the group market provided access to a vast selection of doctors and hospitals, especially those providers with the best reputations. With the advent of the Affordable Care Act and its impact on rate structures, benefits, and plan designs, carriers have less discretion on plan designs and rate setting. As a result, they are turning to these “skinnied” down networks as a primary means to manage costs, differentiate, and vary premium across their respective plan offerings.

In order to gauge the impact, I checked the online directories of two of the major group health plans in one large county in the Tampa Bay market where I reside. While decidedly informal and unscientific in nature, it nevertheless highlights the contrast.

I compared a few key categories of each respective carrier’s heretofore “staple” network (still offered; higher rates than the narrow network plans) against the new skinnier network offering (newly offered; lower rates than staple network plans). In both cases the “staple” networks contained a significantly greater number of providers, were described as open access, and did not require referrals. The new skinnier networks offered fewer participating providers, required designation of a Primary Care Provider (“PCP”), and required PCP referrals to obtain other services.

In comparing several categories of specialists, the narrow networks were on average comprised of about 50% fewer specialist physicians than the traditional networks.  However, the biggest difference between the customary networks and the newer narrower networks came when comparing participating PCPs and hospitals.  Here’s the breakdown:

Carrier 1

Carrier 2

OA Network

Narrow Referral-Driven  Network

OA Network

Narrow Referral-Driven  Network

Primary Care

1280

227

1300+

325

Hospital Primary and Secondary

12

3 (includes 1 major)

18

10 (includes 1 major)

We’ll be monitoring further developments, reporting more on this issue in future posts as well as discussing practical alternative strategies to this growing cost vs. access issue (eg. direct contracting, plan customization, buying a lower cost plan and supplementing, etc.).

In the meantime, what can you do?

When it comes to changing to new plans, look before you leap.  Or, at least plan on doing some homework.

To read more about this topic go to these recent articles in the Washington Post, Insurers Restricting Choice of Hospitals and Doctors to Keep Costs Down,” and at Health Care Policy and Marketplace Review, If You Like Your Doctor You Will Be Able to Keep Your Doctor. Period.”

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