The Government Battle Against Narrow Network Begins


“……a battle is brewing in at least a half dozen states that are challenging limited choice of doctors and hospitals in public exchange options…..”

By Bruce Shutan

December 19, 2013

In hoping for expanded access to health insurance, proponents of the emerging HIX marketplace have had to make a few Faustian deals along the way to realizing their objectives. One such tradeoff under the Affordable Care Act involves narrower provider networks – an old strategy used to rein in runaway costs that’s rooted in the managed care era.

But a battle is brewing in at least a half dozen states that are challenging limited choice of doctors and hospitals in public exchange options. The thinking behind these arrangements is that caregivers charge lower prices in anticipation of higher patient volume, with savings passed along to consumers. There’s also a belief that tighter networks enable primary care physicians, specialists and hospitals on the same network improve coordination of care.

Criticism of this approach follows President Obama’s apology for promises made about keeping existing health insurance without first warning the American public about substandard coverage. The collateral damage: an inability for some consumers to afford visits with physicians or hospitals that they were long accustomed to seeing.

A recent Kaiser Health News story produced in collaboration with POLITICO Pro revealed the following key developments:

◾A handful of states, including South Dakota, Pennsylvania and Mississippi, are considering “any-willing-provider” laws forcing insurers to accept more network participants. One such example involves BlueCross Blue Shield of Mississippi, which cancelled contracts with a for-profit chain with 10 hospitals. The Blues plan filed a legal challenge over the order’s constitutionality, which led to a call for hearings.

◾Anthem BlueCross BlueShield’s plan to save 12% prompted Maine regulators to block the switching of several thousand subscribers to an HIX network excluding the Central Maine Medical Center, as well as partner doctors and hospitals.

◾Washington State’s insurance commissioner sought to keep five insurers from the state exchange, fearing inadequate caregiver networks and some patients needing to drive anywhere from 50 to 100 miles to see various specialists. Three of those plans reached settlements, which included network adjustments, while an administrative judge sided with the Coordinated Care network and Seattle Children’s Hospital alleged adequate access to care and filed a lawsuit.

◾In the wake of Anthem’s plan to exclude more than a third of New Hampshire hospitals from the HIX network and charge 25% lower premiums, state lawmakers have proposed forcing insurers to expand choice and at least one hospital has threatened litigation.

Shutan is a Los Angeles freelance writer.

Editor’s Note: Why have a network? Why not pay all providers the same? Why should one hospital get to charge $12,000 for an MRI when another gets to charge only $3,500? Same MRI machine, same cost. If a provider wants to charge more than the “allowed amount”, the patient pays the difference.