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Changing Provider Networks In Marketplace Health Plans: Balancing Affordability And Access To Quality Care

June 11th, 2014

Editor’s note: In addition to Sabrina Corlette, JoAnn Volk, Robert Berenson, and Judy Feder coauthored this post. 

Twelve percent of the complaints to California’s Department of Managed Health Care this year relate to access to care problems. In New Hampshire, consumers were upset to learn that their local hospital had been excluded from the network of the sole insurance company participating on the state’s health insurance marketplace. In reaction to concerns about narrowing networks, legislators in Mississippi and North Dakota considered “any willing provider” legislation this year.

But at the same time, the Congressional Budget Office expects narrow networks to help reduce marketplace costs by billions of dollars. Network configurations clearly offer consumers a cost-access trade-off. Narrowing networks is by no means a new trend – using network design to constrain providers’ price demands has long predated the Affordable Care Act (ACA). In the new marketplaces, insurers are using narrow networks to help keep premiums low for price-sensitive purchasers. But if a plan’s low premium reflects limited network access, its policyholders might not only face compromised quality care but unanticipated and potentially crippling financial liabilities.

Regulators are recognizing this trade-off and reconsidering network standards at the state and federal level. But regulators face a challenge: If they overly constrain insurers’ ability to negotiate with providers, consumers could face significant premium increases. On the other hand, if they ignore provider participation issues, consumers will lack confidence that there is a sufficient network to deliver the benefits promised without posing financial or quality risks.

Quantitative Versus Subjective Network Adequacy Standards

A number of states have enacted – or are considering enacting – quantitative standards for provider networks, such as a maximum time and distance a consumer must travel to see a provider.   Other states maintain a network adequacy standard but it is predicated on a subjective expectation that insurers provide access to care “without unreasonable delay.” While quantitative standards have significant drawbacks, we conclude that a clear numeric adequacy standard is preferable to a subjective “reasonableness” standard.

However, insurers must be able to maintain leverage in their negotiations with providers to limit price demands and require quality improvements. We therefore encourage regulators to give insurers greater flexibility if they can demonstrate that hospitals and specialty providers within the requisite geographic area do not meet, or are not willing to meet, the plan’s requirements for price and quality. Providers who use telemedicine, meet plan expectations for quality performance, deliver better outcomes at a better price than local providers, or offer evening and weekend office hours could be considered as if they are within prescribed time and/or distance limits. At the same time, insurers who do not have a skilled and experienced in-network hospital or clinician to perform a needed service should be required to provide coverage for that service out-of-network, at no additional cost to the policyholder.

Improving Consumer Information And Regulatory Oversight

It will be equally, if not more important for states and the federally run marketplaces to dramatically improve consumers’ ability to make an informed decision when selecting a health plan. It is often difficult for consumers to obtain clear and understandable information about the breadth and restrictiveness of plan networks before making a purchase, and insurers’ provider directories are notoriously inaccurate and out-of-date. Marketplace officials, insurers, and providers need to work together to provide better information about networks to consumers – and be held accountable when they don’t.

Lastly, state and federal regulators need to actively monitor plans inside and outside the marketplaces on an ongoing basis. This should include data collection to assess policyholders’ use of out-of-network services and audits (such as “secret shopper” calls) to ensure that policyholders are able to access the provider they need in a timely fashion. It should also include a review – and the public display – of consumer satisfaction scores, complaints filed with state and federal agencies, and data on the resolution of internal and external appeals.

These recommendations address some but not all of the challenges associated with narrow or restrictive provider networks. Because many of the ACA’s system reforms have only just been fully implemented, state and federal policymakers will need to continuously monitor how consumers are faring and be ready to adapt requirements to improve the functioning of insurance markets and protect consumers’ ability to obtain affordable, high quality care.

Editor’s note: These topics are explored in an issue brief released May 29 by the Georgetown University Center on Health Insurance Reforms and the Urban Institute and supported by the Robert Wood Johnson Foundation.

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2 Responses to “Changing Provider Networks In Marketplace Health Plans: Balancing Affordability And Access To Quality Care”

  1. David Morf Says:

    Hmm, looks like narrow networks + population arbitrage funding + CMS [for poor&old] = US future? Try RHC+UCC+FQHC+hosp+EMR = regional futures. OK, that’s too cryptic. The idea here is to focus on the key access points into health care on a regional population basis, wrapped around where people live, and focused on the small issues that represent on-hand care for most people, most of the time, but with regional population EMR and cross-silo telemedicine centers (AKA hospitalists in hospitals and in key specialty locations) so onsite care, cross-site coordination, site-to-site care escalation and transition, meds management, and recovery activity can serve people on a regional population basis. The top end exists (hospitals and specialty sites), and the entry points are fast emerging (retail health clinics from drug store chains, on-site workplace care, urgent care centers if not staffed by hospitalist MDs, and the critical value-add middle layer well served by FQHCs—Federally Qualified Health Clinics). Several streams fund the process: CMS for elderly, low income, and special populations, and productivity-based employer contributions based on regional competitiveness gains driven by healthier populations furnishing healthier regional labor enabling more work team reliability, trainability, and productivity, leading to regional comparative advantage, increased employment, wages, non-debt consumption demand, and induced business investment demand. The sketch is the standard regional economic growth model, in this case made sustainable by leveraging funds flows grounded in labor health and output value linked to improved population health and desirable (magnet) population-friendly living environments. The best part is that regions can decide to move on this today. For the purposes of making a point that we’re not talking outside inputs here, this is mostly a matter of how firms, people, and participants choose to look at the framework, tools, and resources currently scattered on the ground where they’ve growed like topsy over the years. Consider it a systemic hypothesis, in lieu of yet another insider loop.

  2. Adam Schaefer Says:

    Agree that properly educating consumers about network vs. price is vital. Simple metrics could be used like percentage of participating providers(hospitals, pcps, specialists) in a 15- mile radius for each plan.

    At this point, though, insurers accurately updating network information for each plan would be a nice step.

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