Insurers Face New Pressure Over Limited Doctor Choice
February 6, 2014
The Wall Street Journal
Anna Wilde Mathews and Christopher Weaver
Insurers are facing pressure from regulators and lawmakers about plans that offer limited choices of doctors and hospitals, a tactic the industry said is vital to keep down coverage prices in the new health law's marketplaces.
This week, federal regulators proposed a tougher review process for the doctors and hospitals in plans to be sold next year through HealthCare.gov, a shift that could force insurers to expand those networks.
Meantime, regulators in states including Washington and New Hampshire are ramping up their own scrutiny, and lawmakers in Mississippi and Pennsylvania, among others, are weighing bills that could force plans to add more hospitals and doctors.
The moves come amid complaints by some consumers that they don't have access to a broad enough range of care—such as specialists at top academic medical centers, which tend to charge insurers higher fees and aren't included in many of the new networks.
Some consumers say they will have to switch doctors with the new health-law plans. But the issue extends beyond the new policies, as insurers have been trimming the array of doctors in private Medicare Advantage coverage and losing some big health-network providers due to market clashes.
California Insurance Commissioner Dave Jones said he plans to revise his agency's standards for insurers' health networks partly because current regulations don't give him enough power to continue oversight after a health plan goes on the market. The aim would be to "make sure when people purchase health insurance, they have reasonable access to health-care providers," he said.
Under the new federal proposal, insurers selling plans in the federally run marketplace would be required to submit to the Centers for Medicare and Medicaid Services a full list of providers in a network before their plans are approved for listing in the exchanges. In the future, regulators also plan to develop federal standards for the required number of providers. For this year, the federal exchange relied largely on state regulators and third-party organizations to review networks, said Karen Pollitz, a senior fellow at the Kaiser Family Foundation.
"It's a substantial change," said Ms. Pollitz. "It's much more specific, and it's going to involve a lot more direct federal oversight."
Under the proposal, the plans offered in the federally run insurance marketplace also would need to include a larger share than previously required of "essential community providers," which are safety-net hospitals, clinics and others often used by lower-income people.
A spokesman for the Centers for Medicare and Medicaid Services said it is "working to strengthen the network adequacy requirements that took effect for this year."
The American Medical Association said it would monitor any patient-access problems in the exchanges and work "to implement proactive solutions we believe can enhance the public health and welfare by eliminating inadequate networks," which, it said, could "endanger patients' health if they cannot access timely, convenient, quality care."
A spokesman for America's Health Insurance Plans, the industry's main trade group, said narrower provider networks are "one way health plans can help to preserve benefits and mitigate cost increases for consumers" as health-law changes take effect.
Narrower networks can help keep down costs partly because providers agree to lower their fee in exchange for the volume of business they expect with fewer competitors.
Some 70% of new plans under the health law offer relatively narrow networks compared with many current plans, according to a recent report by McKinsey & Co. The consulting firm found that plans with smaller choices of hospitals had significantly lower premiums than similar plans offering a broader choice.
The narrow networks have drawn protests, lobbying and some legal challenges from doctors and hospitals.
In New Hampshire, WellPoint Inc. is the only insurer offering consumer plans on the exchange, and its network leaves out 10 of the state's 26 hospitals. The Legislature is considering a bill that would force health plans to negotiate with all providers, and the state's insurance regulator is planning to review its network standards, with a hearing set for Monday. Frisbie Memorial Hospital in Rochester, N.H., has filed a legal protest about the network, which doesn't include it, and is offering patients transportation to the hearing.
The state regulator has already heard from some, like Josh Kattef, 37 years old, an investor in Hopkinton, N.H. Mr. Kattef said that with any of the new plans he would have to drive about 40 minutes to the nearest hospital, and they don't include his current physicians.
"No one wants to give up their doctor," he said. Mr. Kattef said he currently is on an old plan with a broader network, but he will have to switch in December to a new health-law plan.
A WellPoint spokesman said its health-law plan network "meets and exceeds" New Hampshire standards, and that the plans would cost about 30% more if they didn't have a limited network. "All exchange members would have seen higher premiums," he said.
In Washington state, Seattle Children's Hospital has filed a legal protest against the insurance department's decision to approve networks that didn't include it. The state regulator, which clashed with several insurers over their networks last year, has proposed new standards for reviews that would toughen scrutiny about provider networks and require more disclosure of changes to consumers.
Meantime, legislation proposed in Mississippi would prohibit insurers from turning away most hospitals, doctors or other health providers that agree to prices set by insurers. The bill also would bar insurers from selectively charging higher copayments at some doctors' offices or hospitals as a means of steering patients to lower-fee options.
In Pennsylvania, state Rep. Jim Christiana, a Republican from suburban Pittsburgh, proposed legislation that would block insurers from excluding hospitals in some circumstances after a dispute between two big insurers with affiliated health systems. "We don't believe access should be restricted to lock out competition," he said.