They Annoy Patients. They Scare Docs. But Narrow Networks Might Be a Good Thing.

by Dan Diamond, California Healthline Contributing Editor

TOPIC ALERT:

Is it better to confuse patients -- or lower their bills?

Narrow networks seem to be doing both.

The model, under which insurers use quality and cost metrics to limit the number of health care providers participating in a given plan, isn't new. But narrow networks have been in vogue in the post-Affordable Care Act world, as payers seek to roll out offerings that serve patients who are potentially older and sicker -- while keeping premium costs within a certain band.

McKinsey found that about 70% of hospital provider networks on the ACA's exchanges are either narrow or ultra-narrow, which the consultancy defined as having 14 or fewer hospitals. Closer to home in California, only about one-third of San Diego-area doctors were covered through Covered California, one expert noted.

Patients and providers have raised concerns that by limiting plan participants, narrow networks are creating unexpected access challenges. For instance, Californians who were used to shopping through the individual market and have been pushed to the exchange may find that they can't access the doctors they've been seeing for years. Some patients have said they can't find the specialists they need.

(In a further complication for patients attempting to pick a plan, many insurance exchanges' online provider directories have been broken or misleading.)

But on one count, narrow networks have scored a big win: They've been credited with tamping down health insurance costs.

"If you don't like narrow networks," David Blumenthal of the Commonwealth Fund recently wrote, "you're saying ... that you don't like competitive solutions -- at least under current market conditions -- to our health system's problems."

Inside the Model -- and Why it's Frustrated so Many

Narrow networks aren't just an Obamacare story, of course. Even four years ago, more and more insurers suggested they were exploring the model at the impetus of employers seeking to rein in health spending.

And in some cases, those insurers were celebrated for their ingenuity. In a 2012 cover story for Managed Care Magazine, an executive putting together a narrow network was even compared to baseball general manager Billy Beane -- creator of "Moneyball" -- for his savvy in picking and choosing plan participants.

No one is celebrating narrow network creators now.

What changed? The divisive nature of the ACA may have helped tarnish the idea -- narrow networks are an easy target for opponents of the law, some suggest. But more acutely, the widespread changeover in the individual market has led to growing frustration in the provider community.

A California Medical Association survey released in April found that 80% of surveyed doctors have been confused about their participation in a Covered California plan -- and roughly 50% of them weren't even sure how they ended up on certain plan lists.

More than half think they lost patients as a result of patients picking the wrong plans.

But if doctors have it bad ... patients may have it worse.

In her "Ask Emily" column, Emily Bazar recently walked through a scenario where a doctor and hospital didn't mix: The doctor was included in a new ACA exchange plan, but the hospital where the doctor practiced was not. That left the patient on the hook to pick up extra costs.

"As more Californians start to use their new health insurance, they're finding these kinds of doctor and hospital mismatches," Bazar writes.

"[And] now that you're stuck with a plan, the best thing you can do is verify, verify, verify," she adds, unless you want to be stick with thousands of extra dollars in bills or have to switch doctors.

The "ACA has made my health care significantly worse because I can no longer see any of my doctors," one reader told California Healthline. "My only hope is next year more doctors start taking Covered [California] insurance."

Pressures To Change

But there's a challenge for critics: While they can cite anecdotal stories of angry patients or doctors who lost revenue, they're ultimately facing a data gap. Defenders of narrow networks can point to several studies that suggest high-priced providers don't offer any additional value. For example, a 2011 study by Massachusetts Attorney General Martha Coakley found that hospitals that charged more didn't deliver any better care.

And supporters of the model can cite Covered California's premiums, which were surprisingly low in year one of ACA enrollment. That was largely because some top-rated, if expensive, providers were left out of the exchange.

Still, there are a few reasons why narrow networks will get a bit less narrow in the coming months.

The push for 'reasonable access': Get used to hearing this term -- and "network adequacy" -- as year two of ACA enrollment kicks in. In a regulation released last month, CMS pushed new rules that specify a percentage of how many providers must be in a certain network. For example, CMS will require insurers to have contracts with at least 30% of "essential community providers" in their service areas.

According to Kaiser Family Foundation's Karen Pollitz, who commented on an earlier version of the rules, the move away from allowing individual exchanges to monitor participating plans is a big change. "It's much more specific, and it's going to involve a lot more direct federal oversight," she told the Wall Street Journal.

Legal pressures on insurers: Providers in several states -- a children's hospital in Seattle and a medical association in Connecticut -- have sued insurers in an attempt to avoid being dropped or excluded. Whether or not those suits are successful, it's upped broader scrutiny on insurers. And wary about the potential backlash from providers, and the possibility of state legislation that requires them to take "Any Willing Provider," payers are working to be more inclusive.

Other plans opting in: A number of insurers sat out of the health insurance exchanges, citing concerns over launch and implementation. But more plans participating in the exchanges in year two presumably will lead to more choices.

Some of the problem with "narrow network" may be related to the word itself. And a different way of thinking about the term may induce different connotations.

"I'm going to offer the provider perspective (and) use the term high-performing network instead of narrow network," Craig Sammit of HealthCare Partners told Modern Healthcare in December. "It really is more characteristic of the environment that we're in."

Around the nation

Here's a look at other stories making news on the road to reform.

Medicaid enrollees may be sicker, underserved: Peter Frost at the Chicago Tribune notes that the first crop of consumers gaining coverage in Cook County suffer from many chronic conditions.

Can we do the 'right thing' profitably? Harold Pollack interviews Harvard economist and Obamacare architect David Cutler on the social impact of current reforms.

Why Cleveland Clinic's model is so hard to replicate: The White House is reportedly eying Toby Cosgrove, CEO of Cleveland Clinic, to serve as the next Secretary of Veterans Affairs. In 2012, "Road to Reform" took a look at why Cleveland Clinic was celebrated as a model for the Affordable Care Act -- and why its model is so hard to replicate.

Kevin Powell
cont. Forcing plane to allow Any Willing Provider, will not increase cost even when using high priced providers, as they are reimbursed at the same rate as other providers. In a healthcare atmosphere were patient’s have little or no access to specialist due to the fact that the plans are limit contracting, it is obvious why the these plan are choosing narrow networks, not because the so called high priced providers cost more, but because having more providers means the plans will have to pay for the care their patient actually need.
Kevin Powell
The assertion that narrow networks lower cost is very curious. The Any Willing Provider laws definition generally reads “Any willing provider laws require managed care plans to accept any qualified provider who is willing to accept the terms and conditions of a managed care plan”. The terms and conditions of the plan include the rate of payment, so how could allowing a wider network of providers increase the cost to the plan? The obvious answer is that a wider provider network creates more access by patients to providers thus increasing the amount of services the plan will have to pay for. The re-print from David Blumenthal of the Commonwealth Fund “If you don't like narrow networks, you're saying ... that you don't like competitive solutions -- at least under current market conditions -- to our health system's problems.” is obviously disingenuous. Allowing greater numbers of providers always increases competition.
Denise Early
What a complicated and expensive healthcare system we have! And how wasteful! Doctors are contracted with dozens of insurance companies and their front desk staff can't seem to keep up. Now you add smaller networks to the mix and more confusion results. Have you noticed your one doctor has a nurse in the office and three or four additional employees to work on verifying health insurance, and sending off referrals and prior authorization requests. The paperwork is enormous and expensive. The solution would be for the government to negotiate the price for services rather than dozens of insurance companies. Then there wouldn't be an issue of keeping more expensive providers out of a network - Everybody would be paid the same. Isn't this what every other developed country does? This is one of the reasons Americans pay twice as any other country for our health care. What a stupid system!
Hatti Hamlin
Lower costs to insurers can be achieved through narrower networks, but it's less about lowering overall costs and more about shifting costs to patients. If you need a cancer specialist and the only two of them in-network are 30 or more miles away, a patient simply may not be able to choose that provider. Radiation, chemo and all the follow-up care is a huge time-sink, and if you add a two+ hour commute to access it--sometimes on a daily basis--you may have to choose an out-of-network provider closer to home in order to not lose your job. That's a win for the insurer but for the patient it's right back to the bad old days of budget-breaking medical bills. The ACA and state exchanges like to think everything is fungible; Doc A is equal to Doc B, and patients can get the same quality of care for less, every time. This system operates in a Reality-Free Zone.
Christopher Johnson
The problem isn't narrow networks in and of themselves. The problem is that the regulators' and health plans' systems for monitoring and reporting on networks are not built for an environment where one or two specialists suddenly becoming unavailable mean serious access issues for a patient. Systems currently in place are designed for a world where it's fine to only update your network every 3 months (shockingly, the current standard), because you can tolerate fluctuations in available providers (and who cares if the directory is outdated because there are still plenty of available providers somewhere on that list?). Even where we're trying to do the right thing in reporting, it's garbage-in and garbage-out and the health plans don't have to worry about effective monitoring or enforcement impacting their behavior. I really hope we get with the times soon.

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