Friday, November 6, 2015

Health Insurers’ Narrow Networks Putting Squeeze on Patients

Health insurance companies are sharply limiting the number of physicians and hospitals they include in their networks as a tool to limit how much they have to pay in covered benefits. Narrow networks are booming in plans sold both through employer-sponsored insurance and on the Affordable Care Act (ACA) marketplace exchanges.

These moves leave patients out in the cold, and squeezed for the costs of health care the plans aren’t covering. The popular news media and scientific literature have been filled with stories lately about narrow networks. Here’s a roundup.

ACA Plans Lack Specialists

















As many as 14 percent of health plans on the ACA exchanges lack physicians in at least one key specialty. That’s what researchers from Harvard’s T. H. Chan School of Public Health reported in the Journal of the American Medical Association. (“Adequacy of Outpatient Specialty Care Access in Marketplace Plans Under the Affordable Care Act,” JAMA, Oct. 27, 2015.)

“We found this practice among multiple states and issuers,” the authors wrote. “This likely violates network adequacy requirements, raising concerns regarding patient access to specialty care. Such plans precipitate high out-of-pocket costs and may lead to adverse selection (i.e., sicker individuals choosing plans with broader networks), which is similar to concerns over restrictive drug formularies.”

Rheumatologists, endocrinologists, and psychiatrists were the specialists most often missing from the plans.

Texas Leads in “X-small” ACA Networks

Texas has more “x-small” networks (45 percent) on the ACA exchange than any other state in the network. That’s what the Leonard Davis Institute of Health Economics (LDI) at the University of Pennsylvania found. (“State Variation in Narrow Networks on the ACA Marketplaces,” published by the Robert Wood Johnson Foundation, August 2015.) Those super-shrunken networks offer access to 10 percent or fewer of the physicians in a rating area. 

This study looked at plans issued by 267 carriers across 355 networks in all 50 states. It used “t-shirt size” ratings of x-small (less than 10 percent), small (10 percent-25 percent), medium (25 percent-40 percent), large (40 percent-60 percent), and x-large (more than 60 percent). The variation was extensive. Some states, such as Delaware, Kansas, and North Dakota, have mostly large or x-large networks. Others don’t at all.

Here are the states with the most x-small or small networks:
  • Georgia – 83 percent
  • Florida – 79 percent
  • Oklahoma – 78 percent
  • California – 75 percent
  • Texas – 73 percent
  • Arizona – 73 percent
In an earlier study, the authors at the Davis Institute found that 41 percent of silver plans on the ACA exchanges were x-small or small. 

Half of ACA Hospital Networks Are Narrow


























Patients’ choice of hospitals on the ACA exchange plans is similarly limited. That’s what the McKinsey Center for U.S. Health System Reform found. (“Hospital networks: Evolution of the configurations on the 2015 exchanges,” published by McKinsey & Co., April 2015.)

“Across the country, close to half of the 2015 networks that consumers can choose from are narrowed; in the largest cities, almost two-thirds of the networks are narrowed,” the report states.

The report defines a “narrow” network as having 70 percent or fewer of local hospitals participating. An “ultra-narrow” network has 30 percent or fewer participating.

“Many consumers, however, do not appear to understand the choices available to them or the impact of those choices (especially limits on access to care),” McKinsey found. “In our consumer survey, 44 percent of those who bought an ACA plan for the first time this year reported that they did not know the network configuration associated with their plan.”

Half of ACA Plans Don’t Cover Out of Network






















Another study found that 47 percent of the plans sold on the federal ACA exchange have no coverage for out-of-network care. In Texas, that number is 67 percent. (“Almost Half of Obamacare Plans on Federal Marketplace Lack Out-Of-Network Coverage,” published by HealthPocket, Oct. 7, 2015.)

That, HealthPocket explains, means “the plans will not cover the costs except in the case of a medical emergency or if a prior authorization from the plan had been formally submitted and then approved by the health plan.”

Narrow Networks Forcing Patients to the ED

Because of narrow networks, a survey of emergency department doctors found, patients are showing up sicker in the emergency department. Also, emergency physicians are finding fewer primary care doctors and specialists to whom they can refer patients for follow-up. (“Insurance Industry Drives Patients to Sacrifice Necessary Medical Care,” published by American College of Emergency Physicians [ACEP], Oct. 26, 2015.)

Specifically, the national study of emergency physicians found:
  • 73 percent of the doctors see more Medicaid patients because insurance companies don’t provide enough primary care or specialty physicians for their patients.
  • 65 percent see more patients in the emergency department, in large part because health insurance companies don’t provide enough primary care physicians to support the community.
  • 60 percent have difficulty finding specialists for their patients, because of narrow networks.
  • More than 80 percent treat patients who said they had difficulty finding specialists to care for them because health plans have narrow networks.  
“This is a scary environment for patients,” said Jay Kaplan, MD, president of ACEP. “The insurance companies are shifting costs onto patients and medical providers as they attempt to increase their bottom lines, and this threatens the foundation of our nation’s medical care system.”

Health Plans Mount Lackluster PR Campaign

Trying to escape the cascade of negative publicity, the insurance industry issued a report blaming physicians’ overcharges for medical care as the cause of “surprise bills.” (“Texas doctors, insurers taking ‘balance billing’ fight public,” Houston Chronicle, Oct. 11, 2015; “Doctors fire back at insurance industry report on what Texans are charged for ER visits,” Quorum Report, Oct. 8, 2015)

It didn’t work. The news media saw right through it and reported this comment from TMA President Tom Garcia, MD:
This so-called report is nothing more than a desperate smoke screen to divert attention from the real problem. The health insurance industry games the system to keep more of patients’ premium dollars by forcing patients to seek care out of network. Then they have the gall to criticize what some doctors’ bill for that care.
And the San Antonio Express-News published a response to the study from William W. Hinchey, MD. 

“Insurers want your local pathologist in the network only for inpatient hospital services but not for your outpatient services — even when the pathologist wants to be in your network for both,” Dr. Hinchey explained. “The insurance company ultimately decides who will be in or out of your network. Essentially the insurers are saying to the physicians: We want you some of the time but not all the time.”

The Real Truth About Balance Billing

A TMA study examines how insurance plans’ network designs and payment decisions leave many Texans with “surprise bills” for health care services.

Inadequate and limited physician networks that insurers sell today are leaving patients with unpaid bills. Unfortunately, Texas consumers are learning the limits of the coverage they bought just when most need coverage, especially in emergencies. The consumer is no longer satisfied with the not-very-well-explained, varying levels of savings that insurance networks create, especially if that means a greater financial burden in emergencies. Yet, despite network shortcomings, consumers do not want to be left without the choice of plans that offer network benefits.



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