Spikes in Uncovered Medical Costs Concern Consumers Under Narrow Networks Plans

Published Online: July 28, 2014
Cate Douglass
The Obama administration and state insurance commissioners are developing new standards to oversee narrow networks as consumers begin to express concerns of limited physician choice and unexpected out-of-network costs. Initially implemented as a cost-constraining effort for health plans, narrow networks have grown so wildly over the past several years because they are relatively inexpensive; yet, many consumers are now facing a spike in uncovered costs due to limited physician and hospital choices.
With nearly 16 of the 54 million Medicare beneficiaries covered under narrow network plans, federal officials are working to establish stricter standards for such networks to determine whether these plans provide sufficient physician networks for the enrolled patients. In most cases, many consumers say they do not. Mike Kreidler, insurance commissioner for Washington State, said that he “heard from many consumers who were upset to find their health plan no longer included their trusted doctor or hospital [and] some people discovered this only after they had enrolled.”
Federal officials report that standards will be modeled after the plans employed to oversee the Medicare Advantage program, which also was in question for the number of care options available in its networks. However, states may apply additional standards to couple with any sort of federal guidance.
In New York, physicians must now notify their patients when their services are not covered by the patient’s health plans, and insurers must allow their clients to seek medical care from a physician not covered by their plan free of added charge if such medical treatment is not offered by any other physician in the plan. Additionally, the National Association of Insurance Commissioners is working to revamp an outdated model law for consumer protection after they found that many insurers excluded several children’s hospitals, cancer centers, and academic medical centers from health plans as a means of cutting costs.
To resolve these growing concerns, industry leaders who attended the Alliance for Health Reform briefing said that narrow networks must find a “balance among value, access and affordability.” For these networks to truly “foster high-quality, low-cost care,” they suggested that consumers must have sufficient information regarding which doctors are covered. They also included that patients should know how to access out-of-network services as well as about any changes to their health plan after the initial sign-up. Both providers and insurers, they said, must play an active role in communicating their patients’ care options.
Katherine Arbuckle, Chief Financial Officer, Ascension Health, suggested that insurers account for varying patient populations when creating narrow networks with adequate numbers and types of providers, as measuring hospital distance will not be enough for many low-income families who may not have access to means of transportation.
While narrow networks may create challenges, many insurers are working to address consumer concerns. Kristin E. Binns, a vice president of WellPoint, said that Anthem Blue Cross increased its provider directory by 10% —adding 38,000 doctors to the California exchange network —to improve the accuracy of the insurer’s system.
Around the Web

Narrow networks getting wide attention from regulators [MedCity News]

To Prevent Surprise Bills, New Health Law Rules Could Widen Insurer Networks [The New York Times]

Narrow Networks: Striking the Right Balance [FierceHealthPayer]