WASHINGTON—As more and more previously uninsured Americans sign up for coverage under the Affordable Care Act (ACA), concerns have been raised about the adequacy of the health plans in which they enroll. That is because the ACA has led to health care plans sold on the exchanges that use narrow, tightly organized provider networks that exclude certain physicians, other health care professionals and hospitals.
At a briefing hosted by the Alliance for Health Reform at the National Press Club here, speakers shared insights on issues surrounding the concept of network adequacy, and gave a preview of concerns the new National Association of Insurance Commissioners (NAIC) national model plan needs to address.
As described at the briefing, worries have been raised about limited networks that exclude specialists (including those who treat children) and academic health institutions with comprehensive cancer centers, because these are seen as too expensive. According to a report in May prepared jointly by the Center on Health Insurance Reforms at Georgetown University's Health Policy Institute and the Urban Institute, the fields of oncology, primary care, and mental health are the ones that have traditionally prompted concerns about health network adequacy.
The American Society of Clinical Oncology has identified the need for network adequacy standards under the ACA, since vulnerable populations (children with cancer and adults with rare cancers) may require oncologists out of their network for appropriate treatment options. ASCO also supports an appeals process for patients who realize following treatment that their insurance does not cover the services provided to them.
Advocates of narrow networks, also called value networks—which were marketed as health maintenance organizations (HMOs) in managed care during the late 1980s and early 1990s—see these smaller health networks as a way to create competition and control costs. Critics say they limit consumer choice, because if a patient chooses to go out of network, he or she may pay thousands of dollars out-of-pocket in uncovered care.
The ACA creates new national rules designed to protect consumers by requiring that insurers provide a minimum level of access to local health care providers. But the ACA also gives states flexibility in establishing network adequacy.
New Model Health Plan
NAIC is currently in the process of drafting a new model health plan for states to use—which updates its 18-year-old model plan—to ensure that patients receive adequate care under the ACA. And the National Committee for Quality Assurance (NCQA) in late July of this year released Health Plan Accreditation 2015, a new model of network adequacy that sets forth network transparency requirements; quality measures that emphasize value and health outcomes; and the need for annual rescoring of the plan's network on a common set of quality measures.
The NAIC health plan model should be completed by the end of 2014 or early 2015, said Theodore K. Nickel, Wisconsin Commissioner of Insurance, Chair of the NAIC Midwest Zone, a member of the NAIC Executive Committee and Governance Review Task Force, and Chair of the NAIC Health Care Reform Regulatory Alternatives Working Group.
Because health insurance is regulated at the state level, the NAIC regulatory model on network adequacy will have to be voted on and adopted by state legislatures.
“This is a very important discussion, and one that's going to continue for some time in the future,” he said. “The issue of network adequacy is “accelerating at a rate that we didn't anticipate. This is all new to folks; this is the first time we've had a national mandate to buy health insurance.”
He noted that for physicians and other health care providers, the wider the health plan networks, the greater the reimbursement rates. But, Nickel said, insurers are constantly trying to narrow the networks used in their plans to save money.
“Higher prices for services do not necessarily mean better outcomes,” he said.
However, the new NAIC model plan for insurers will probably contain certain specified out-of-network exemptions for emergencies or specialized care—a rare cancer, for example. (The ACA prohibits insurers from charging consumers out-of-network cost sharing for emergency services, even if the patient goes to an out-of-network provider.)
Nickel said that because of the diversity and complexity of health insurance plans—given the geographical diversity of states—determining the adequacy of a given health network is not a simple matter. “There may be different standards for different products,” he said. “It's clear that this business of state-to-state differences needs to be recognized.”
Some states have multi-tier plans. Some states may offer plans with higher standards than federal regulations require. “Are narrow networks even a problem?” he asked. “How narrow is too narrow? What is the appeals process for going out of network? What if a doctor or hospital leaves a network?” And what should the appeals process be if a patient in a health network believes he has been treated unfairly?
Also speaking, Joel Ario, JD, Managing Director of Manatt Health Solutions, former insurance commissioner of Pennsylvania and of Oregon, a member of NAIC's executive committee for 10 years, and the first director of the U.S. Department of Health and Human Services Office of Health Insurance Exchanges (2010-2011), said that narrower networks were intended by the ACA to manage the costs of care—“You could call them ‘Kaiser-like’ plans,” he said, noting that these integrated health-delivery systems are intended to ensure price controls without sacrificing quality.
Ario emphasized the need for health plan transparency, stating that “Consumers have to understand what they're buying,” to avoid an unwelcome shock. As a hypothetical example of a lack of health plan transparency, a patient might have surgery by a surgeon in the network, but because the anesthesiologist may not be in the network, the patient may receive an unanticipated separate bill for the anesthesiologist, which he is expected to pay out-of-pocket.
In addition to transparency, there need to be “safety valves” for patients who go out of network for health care services, Ario emphasized.
“Value and narrow are not synonymous,” said Michael Chernew, PhD, the Leonard D. Schaeffer Professor of Health Care Policy at Harvard Medical School, former Vice Chair of the Medicare Payment Advisory Commission and a member of the Congressional Budget Office's Panel of Health Advisors.
He noted that narrower, tightly organised networks strengthen the hand of the negotiating buyers (health plan administrators), especially with large medical plans and hospitals, because the administrators can choose providers they believe are more efficient and provide good value for the price.
‘Bait and Switch’
But, Chernew said, “There are a lot of legitimate concerns about these products.” The main problem is that a consumer usually chooses a plan before he becomes ill. One major concern is a so-called “bait and switch” tactic; a healthy consumer chooses a plan and then selects a health care provider from that plan when he gets sick, only to be told that his bills will not be covered because the physician is no longer in the plan's network.
“We need to reduce the consequences when a doctor or hospital goes out of network,” Chernew said.
“I think we should really differentiate ‘narrow’ from ‘value,’” said Diane P. Holder, MS, Executive Vice President of UPMC, President of the Insurance Services Division, and President and CEO of the UPMC Health Plan, which provides insurance coverage to some 2.3 million Pennsylvanians.
What is Adequate?
Asked by OT whether it is prudent for health plan networks to exclude cancer centers of excellence—since their upfront care might save costs down the road—Holder said, “One of the things at the heart of this debate is, what is adequate?” Holder, who serves on the adjunct faculty of the University of Pittsburgh's Graduate School of Public Health, said the issue of network adequacy is really about what patients need.
He added: “I think there are certain minimal standards that have to be met.” Chernew said he would be “very, very wary” of forcing health insurers to include certain medical centers of excellence, a tactic he called “on the road to some kind of price regulation” or monopoly. He said he opposes the idea of giving a “blank check” to certain medical centers even if they have a reputation and track record of excellence.
What really worries him about narrow health networks, he said, is access to the physicians that patients want and trust. He told OT that his late mother had lymphoma, which was diagnosed in 2001. She had two physicians of whom she was very fond: her primary care physician and her oncologist. Because his mother had Medicare, she did not have to worry about whether these two physicians were in the same network. But what if a non-Medicare patient wanted to go to a primary care physician and to an oncologist who were not in the same network? (Chernew said his mother was successfully treated for lymphoma and its recurrences, and died of another condition.)
All the speakers at the briefing agreed that in this time of uncertainty, complexity, and ferment as the ACA is implemented, it is very important to give consumers shopping for health insurance the information they need to make informed choices about coverage: “The key is, what plan is better for me?” Chernew said.
Physicians themselves also need to be well informed, Chernow said, so they can inform their patients.
“They [physicians] are the key to the information flow,” he added. “Providers are the ones who are dealing with the patients... they are the face of the medical profession.” Thus physicians need to know who is in and out of the network, for they are the ones who make referrals.
Holder agreed: “Historically patients have trusted their physicians more than anyone” when it comes to matters of health insurance. And when they are informed, “Ultimately consumers will be the barometer on this issue,” Ario said.