topic 7: articles
ppos decline in marketplace plans
-"narrow network" plans, which are characterized by a limited group of in-network providers. Absence of clear standards about actual or desirable network size has led to calls for both more-specific, consumer-friendly categorizations of network size, as well as the creation of stronger state, or even national, standards for "network adequacy," - In one sense this analysis underestimates the supply of PPO plans since it does not explicitly take new entrants into account -In another sense, this analysis may underestimate the extent of change because the term "PPO" does not have an exact definition. -It could be the case that many of the offerings that were retained are not actually the same, and in fact have smaller networks and/or fewer out-of-network benefits as compared to 2015. -Carriers who discontinued PPOs have argued their expense makes it impossible to affordably price exchange products. Given the significance of the prices to exchange consumers, and the competitiveness of the market, these are important considerations, yet some returning consumers will find that they no longer have access to their provider, or do not have the opportunity to purchase a plan with out-of-network benefits.
anthem blue cross faces charge of violating "any willing provider" law
-A Cali doctor has filed a lawsuit against Anthem Blue Cross for allegedly denying his application to become a part of the company's provider network, an action the lawsuit contends violates Cali's "any willing provider" law -Disallow Blue cross from preventing any physician who is willing to accept the terms of Blue Cross contracts and meets Blue Cross' eligibility criteria from becoming a Blue Cross provider -This issue arose in the early 2000s, when HMOs and MCOs had established a practice of limiting the number of doctors in their provider networks as a cost-saving measure -Any Willing Provider law - require insurance plans to accept any qualified provider who is willing to accept the terms and conditions of a managed care plan; the company must clearly state its criteria for selection as a provider Nordella met Blue Cross' eligibility criteria, had previously been a participating Blue Cross provider and was willing to accept the terms and conditions of Blue Cross' provider contracts, but Blue cross said there was "no network need established in the area of his practice" -At that time, the insurance industry contended that federal law under ERISA should super ceded AWP laws enacted at state level -Competing objectives - the physicians desire to provide a large, diverse and well-distributed network of doctors, which they say improves quality of care, and the insurance companies' desire to limit the # of doctors in its network as a cost control measure
a tale of two deliveries
-An out-of-network physician is allowed to bill patients for the difference between the amount charged for services and what the insurance company is willing to pay. For Layla, the difference was a few hundred dollars, but when surgery or emergency care is involved it can easily soar into the tens of thousands. -A national survey published in 2013 showed that the likelihood of involuntary use of out-of-network providers was higher among those with lower incomes and whose health status is "fair" or "poor." This suggests that out-of-network charges are disproportionately impacting those who may be least able to dispute them. -make it transparent -make it simple -make it available
brief on the sad status of narrow netowrks
-As interest in the use of narrow networks has increased, so have concerns about their effect on consumers' choices, costs, and access to care. With the growth of narrow network plans, it is important to understand the effectiveness of existing and emerging network design strategies and the potential for policies to ensure consumer access to high-quality care. -Greater use of primary care and reduced use of specialty care occurred. Savings were concentrated among consumers who could keep their primary care provider. -They suggested that, unless risk adjustment accounts for differences in patient mix and health status is employed and working well, the constructions of narrow networks could be used to discriminate against patients with complex conditions and greater needs. -Panelists suggested that more proactive monitoring of network adequacy is needed. They observed that current measures of network adequacy are weak and depend heavily on health plans' self-reported data. --Participants acknowledged the importance of striking a balance between flexibility for insurers in designing networks while ensuring consumer access to high-quality care. They discussed the need for greater oversight of and better standards to measure network adequacy. Experts agreed that the long-term implications of narrow networks remain to be seen. In identifying areas for research on narrow networks, they emphasized that research should account for market factors, both in the study design and in interpreting the results. Given that the narrow network strategy relies on consumer behavior, a recurring theme was the need to educate and assist consumers in making informed choices.
out of network litigation
-As out-of-network provider litigation continues, insurers would be wise to review recent published opinions dealing with common issues like assignment of claims from insured to provider, pre-service authorizations, and "usual and customary" charges.
centro medico vs laborers wellfare
-Centro Medico is a surgical center that is out of network under a Laborers' Welfare plan and hence had no negotiated rate agreement. Before treating several Laborers' Welfare members, Centro Medico called Laborers' Welfare and confirmed coverage. Laborers' Welfare then paid what it calculated to be the "usual and customary charge" for the services. Centro Medico sued for promissory estoppel, claiming that Laborers' Welfare had promised to pay a fixed percentage of Centro Medico's full billed charges. -The court held that the evidence did not support Centro Medico's claim: Centro Medico's written notes from the verification calls used the phrase "usual and customary," and Laborers' Welfare had a policy of training its representatives to explain limitations in coverage. The court likewise rejected Centro Medico's argument that even if Laborers' Welfare promised to pay only usual and customary rates, Centro Medico interpreted "usual and customary" to mean its full billed charges. The court pointed to common industry practice construing the phrase's contrary plain meaning
community hostpital vs aetna
-Community Hospital, a hospital that is out-of-network with Aetna, treated an Aetna insured in its emergency room on three occasions. In each instance, Community Hospital contacted Aetna, which either authorized the treatment or verified insurance eligibility. Also in each instance, Aetna paid Community Hospital less than its full billed charges for the services. Community Hospital brought suit, alleging negligent misrepresentation, breach of implied contract, and common count services rendered, among other causes of action, based on Aetna's refusal to pay the full billed charges despite the prior authorizations. -The district court held that the negligent misrepresentation claim failed because negligent misrepresentations must relate to past or existing facts, and Aetna's authorization before the services had been rendered related to what Aetna would do in the future. -The district court held that the implied contract claim also failed. While pre-service authorization calls from a provider to an insurer may form a contract, the court noted, the "dispositive issue" in this case was whether full payment was expected under that contract. The district court noted that Aetna informed Community Hospital that the patient was an "out of network admit." The court also pointed to standard practice in the insurance industry as reason that Community Hospital could not have reasonably expected payment of its full billed charges. -The district court likewise held that the common count "services rendered" claim failed. That claim requires that the defendant requested the services, and while Aetna may have authorized the treatment, the patient requested it, the court held. Because other claims not discussed here survived, however, the district court ultimately ordered that a jury must determine whether the amount that Aetna paid on the claims was reasonable.
health care option little used
-Consumers have long insisted choice is a good thing; many consumers bolt to less restrictive plans that allow them to choose their doctors -In the case of POS HMOs - a fast growing alternative to HMOs - few people exercise the freedom they pay for -7% of people in POS plans opted to pick their own specialist -Just having the option of choice seems to be enough for people -1 in 5 workers enrolled in a POS plan last year; the added choice cost on average $623 a year more than it would have paid for HMO coverage -Challenged for the right mix of benefits at the right price -Many patients like their health plan's freedom but not its fees -People will unstable chronic conditions, allergies, orthopedic problems and injuries has the highest rates of self-referral among POS plan members -Many people who bypassed their PCP to seek out a specialist on their own said they did so either to save time or b/c they had an existing relationship with a particular physician -The challenge is to put a price tag on choice that is low enough to attract workers but high enough to discourage unnecessary use of expensive services Money is the main reason people avoid POS plans or fail to use them properly In some areas HMOs are cheaper and people are used to them, so they haven't seen much success with POS plans POS flourished in California as a tight labor market drive ER's to offer ever richer health benefits as a tool to retain workers -People's fear if that they'll get sick and be stuck with a substandard doctor from the HMOs approved list -People will have to put a price tag on "peace of mind"
naic updates model network adequacy law to address narrow networks and surprise bills
-Controversy over the growing use of narrow provider networks by issuers on the Affordable Care Act's insurance exchanges ("Exchanges"), along with concern over enrollees' receipt of unexpected charges from out-of-network practitioners when receiving treatment at innetwork facilities (often referred to as "surprise bills"), compelled the NAIC to update the Network Adequacy Model Act. -The Network Adequacy Model Act looks to state insurance commissioners to determine the adequacy of an insurer's network, using criteria such as geographic population dispersion and new health care delivery options like telemedicine. Insurers are now required to have a process in place to ensure that covered persons can access covered benefits at the innetwork level (including for cost sharing) from a non-participating provider. Such process is necessary when the insurer has a sufficient network but not the specific type of provider needed to provide the covered benefit, or when the insurer does not have a sufficient number of the specific type of participating provider available to provide the covered benefit without unreasonable delay or travel. --The NAIC added a new section to the Network Adequacy Model Act to address the issue of surprise bills. Insurers would now be required to establish a program for the payment of facility-based out-of-network provider bills in instances where the billed charge and the plan's allowable amount is more than $500. The insurer can choose to either pay the submitted facility-based out-of-network provider bill or pay in accordance with benchmarks set by the state. -
no more gatekeepers: days of hmos referral restrictions coming to an end
-HMOs continue to loosen the restriction on requiring referrals form PCPs before patients can get to a specialist HMO of Blue Cross Blue Shield, CompacareBlue said that it would no longer require referrals for enrollees visiting in-network providers -Trend by insurers to ease primary care gatekeeping requirements, even as some -HMOs consider implementing greater restrictions on pre-authorizations for certain procedures and adding more stringent care management -Blurring of the line b/w managed care and more flexible insurance options like PPOs -"No growth potential in HMOs" -Unspecified costs associated with administration "hassle" were the driving force behind CompcareBlue's decision to end in-network referrals -Found itself saying no to fewer and fewer specialty visits, further lessening their usefulness -People expect to see much more "blended" HMO and PPO products in the future -The relaxed referral restrictions signal the end of the traditional managed care model - ER's and EE's have grown accustomed to choice -Referrals are still required for out-of-network providers -Some companies have removed referral requirements for visits to specific specialists or for specific treatments -Horror stories of missed diagnoses due to financial pressure on PCPs to not refer patients to specialists; day-to-day referral requirement hassles -Specialty providers still request that patients establish a relationship with a primary care physicians before seeing a specialist; CompcareBlue still requires that HMO patients will select a primary care doctor and most end up seeing that doctor before going to a specialist anyways
narrow network face fresh scrutiny: can they pass the adequacy test?
-Insurers are narrowing networks to better control costs; creating "high quality" networks to include providers that rank well on quality metrics; and introducing tiered networks in which consumers pay more for high-cost providers. These changes may please the providers who are fortunate enough to be chosen for the networks, but are threatening to those left out, such as higher-cost academic medical centers or specialty providers such as children's hospitals or cancer centers. -States generally regulate networks by responding to complaints, according to a report by NAIC's consumer advocacy group -Consumers don't necessarily see narrow networks as a bad thing if they keep costs down, and they have been relatively popular in the ACA exchanges so far, accounting for about 70% of health plan sales in 2014. -Consumers may be lured in by the lower premium, but attitudes may change once they learn that they can't see certain specialists or when they get a big medical bill from an out-of-network provider that they didn't know was out of network "surprise billing"
remember managed care? its quietly coming back
-Insurers are rolling out plans with more restricted choices of doctors and hospitals and weighing new requirements for referrals before patients can see specialists -Some insurers are increasingly requiring doctors to get prior authorization before patients can get certain care such as spinal surgeries -UnitedHealth said it is using prior authorization "surgically" to counter "extreme variations in quality and cost;" doctors aren't sure how much things have changed -The growing number of prior authorizations that have to secured for treatments costs a tremendous amount of time -In recent years, the insurers have been shifting a growing share of the expense of coverage onto workers and companies are betting EE's will accept trade-offs they rejected 15 years ago in order to prevent premiums from jumping even faster -Employers are interested in "rigorous, aggressive medical management," including prior authorization, as well as limited networks of health-care providers Some insurers have promised savings of 3% to 5% from narrow-network plans and reductions of more than 10% if other restrictions are added, including even fewer choices of medical providers, strong pre-authorization, and requirements for patients to get a referral to access specialty care In 1999 UnitedHealth said it would stop second-guessing doctors' decisions before treatment and adopted a care coordination process that wasn't supposed to require formal preclearance But UHealth said that for the next 18 months, care coordination will generally be replaced by a new "prior authorization" process - for certain services and tests, including joint replacements and spine surgeries, services determined to be not medically necessary beforehand wouldn't be covered -Insurers have been experimenting with smaller provider networks for years and are now rapidly ramping up, though they continue to simultaneously sell typical broad preferred provider org plans The narrower plans can have closed structures that work like classic HMOs Insurers can reduce costs with narrow networks b/c they can exclude the priciest doctors and hospitals -The doctors and hospitals in the narrow networks are selected based on quality measures as well as cost, while data help them ensure they use prior authorization only where it is needed
north cypress med vs cigna
-North Cypress, a hospital that is out-of-network with Cigna, brought suit alleging that Cigna underpaid for services. Under the ERISA plans at issue, members were required to pay higher co-pay and coinsurance amounts when they went to an out-of-network provider, which Cigna noted incentivized patients to choose in-network providers and lowered the cost of healthcare overall. North Cypress, however, allowed Cigna members to pay co-pay and coinsurance amounts at in-network rates if they paid either up front or within a short amount of time. North Cypress did not offer a corresponding discount on the amount it billed Cigna. Because of a plan provision that excluded coverage for services for which members were not required to pay, and the fact that members were not required to pay the full out-of network co-pay and coinsurance amount, Cigna took the position that it should pay North Cypress' claims as if North Cypress billed a lesser amount that corresponded to the lesser co-pay and coinsurance rates. -The district court dismissed the ERISA claims for lack of standing, but the U.S. Court of Appeals for the Fifth Circuit disagreed. Cigna argued that North Cypress could point to no concrete injury supporting its standing to sue because: (1) North Cypress had standing, if at all, through assignments of rights it received from the plan members, and (2) the members were never at risk of higher out-of-pocket charges because North Cypress did not later charge them amounts that Cigna refused to pay. However, the Fifth Circuit reasoned that what happened to plan members after they assigned rights was not determinative: at the time members assigned rights to North Cypress, members had the right to seek payment from Cigna under the plans, which provided certain coverage for out-of-network providers. Cigna next argued that even if North Cypress had standing to bring suit, that suit failed on its merits because Cigna was not obligated to pay more than it did under the terms of the plans. The Fifth Circuit, however, remanded that issue to the district court.
narrower doctor choices coming for group health plans
-On the public exchanges, consumers are likely to find an increasing number of narrow network plans, though it may vary from state to state -Plans must narrow networks, researchers say, because insurers can no longer deny people coverage due to pre-existing conditions and must cover certain essential health benefits. While this means Americans are no longer discriminated against when it comes to buying health care coverage, it can lead to higher costs if they want a large number of doctor and hospital choices. -Carriers who discontinued PPOs have argued their expense makes it impossible to affordably price exchange products. Given the significance of the prices to exchange consumers, and the competitiveness of the market, these are important considerations, yet some returning consumers will find that they no longer have access to their provider, or do not have the opportunity to purchase a plan with out-of-network benefits.
big hmo to give decisions on care back to doctors
-The United Health group is returning decision-making power over patient care to physicians, breaking a longstanding element of managed care that has angered many doctors & patients -A patients doctor will be able to decide w/o the insurer's interference whether to admit health plan members to a hospital or provide other treatment -The Co will still review decisions after the fact and urge doctors not to exceed certain averages - doctors can be dismissed from company's network of approved physicians -United said it approves 9/10 care decisions anyway - decision will save them $100 million -The decision also allows them to smooth relations w/ doctors and patients, attract more customers and perhaps avoid some future legal liability - suits generally contend that managed care companies misrepresent that their clients are getting the best possible care when in fact the cost of care is the determining factor United, Aetna and several Blue Cross plans have separately offered their members the right to appeal denials of care to an independent panel outside the company -Physicians and consumer advocates hailed United's move United's actions are "the next stage in the evolution of HC, the edge of a wave of change" -The changes being made could attribute to developments like the "patients' rights" legislation that is awaiting action; provisions include the right to sue health plans for medical malpractice, the right to appeal denials of care to independent review panels and guaranteed access to specialists -Managed care companies that turned over medical decision-making to physicians would not be liable to medical malpractice lawsuits under the bill The right to sue companies could increase costs for health plan members, or is likely to result in lower costs b/c the best care in the long run is less expensive than cutting corners -The change will help re-establish a sense of trust b/w insurers and the doctors and reduce burdensome paperwork in doctors offices -Some of the $ saved will go towards programs for patients -United will still negotiate discounts on payments to doctors and hospitals and will continue to try to minimize expensive hospital stays
sustainable provider payment arrangements
-The standard arrangement for managed care was a per-member-per-month amount that physicians were paid for patients in their panel; physicians would then provide the care needed - placed insurance risk on physicians -The physician and their practice could only achieve adequate revenue if the aggregate cost of services provided was equal to or less than the total of all capitation payments -FFS reimbursement system demonstrated unsustainable in the LT -Designing a reimbursement system that avoids the pitfalls of both FFS and capitation is one of the largest challenges facing the HC industry today -The arrangement should have the following goals: 1. Provide medically appropriate care to the patient 2. Compensate providers adequately to ensure financial health, and in a way that rewards high-quality care 3. Restrain growth in HC costs Categorizing risk: 1. Controllable risk - risk associated with an action and outcome over which an org has some degree of control 2. Uncontrollable risk - risk that is out of an organizations control -A uncontrollable risk over which insurers have limited control in a pure FFS system is physician behavior - recommendations and treatments may be redundant and unnecessary and create liability for the insurer 1. The intensity/severity of the treatment is uncontrollable to insurer 2. Physicians and patients have the most influence on the costs borne by the insurer, yet have minimal financial downside for doing so -The insurers sought to move the moral hazard associated with provider behavior by shifting the entire medical risk to providers by means of capitation -From an actuarial perspective an improved reimbursement system would limit uncontrollable risk for all parties involved and maximize the taking on of controllable risk 1. Increase controllable risk 2. Avoid transfer of uncontrollable risk Alternative provider payment arrangements will have to be carefully constructed on a case-by-case basis
the out of network battle heats up
-The underlying issue in cases such as the ones discussed below center around coinsurance payments or the percentage of charges for the "covered expenses" that an insured person is required to pay under the plan. The payors' position is that patients should not be enticed to seek treatment from out-of-network providers with a promise that their coinsurance will be waived or reduced, also known as a "discount program." The providers' position is that offering discounts to the patients is not an unlawful practice and that nothing in the patients' insurance plans allows the payors to pay less than the amount billed by the out-of-network provider. These providers insist that such discount programs are appropriate and that payors should pay the full amounts charged. In response, payors have begun to take internal steps to avoid the "phantom charges" they claim are being billed by out-of-network providers. -The district court made two significant rulings: (1) NCMC did not have standing to bring its ERISA claims because the claims were brought as assignee of the patients and since NCMC has excused the patients from paying the amounts charged to CIGNA, the patients did not have an "injury in fact" or a threat for actual or imminent injury and NCMC did not have standing for the underlying suit; and (2) CIGNA's interpretation of the plan language was correct and therefore CIGNA was entitled to pay the providers amounts based upon what the patients were paying (the "fee forgiving policy").
health insurance plans to be rated by network size
-Under new rules to be published Tuesday in the Federal Register, insurers will still be allowed to sell health plans with narrow networks of providers. But consumers will know in advance what they are getting because the government will attach a label indicating the breadth of the network for each plan sold on HealthCare.gov. -Out-of-pocket costs, as defined by the government, include deductibles and co-payments, but not the premiums that people pay for insurance. Each insurer sets limits on out-of-pocket costs for its health plans, and the limit cannot be higher than the maximum specified by the government. The maximum for an individual will exceed $7,000 next year for the first time. It will go up by $300 in 2017, after an increase of $250 this year. -people with low incomes can obtain discounts that reduce their deductibles and other out-of-pocket costs if they choose midlevel silver plans. Slightly more than half of the people with marketplace coverage received such "cost-sharing reductions" last year. -Another new requirement is meant to guarantee "continuity of care" for certain patients. If a health plan drops a doctor from its network without cause, the insurer must allow patients in "an active course of treatment" to continue seeing the doctor for up to 90 days. -Under the new rules, consumers using the federal marketplace will be able to get help year-round from insurance counselors financed by the government. The counselors, known as navigators, help people sign up in the annual open enrollment period. The administration is expanding their duties to include teaching people how to use insurance, appeal denials of coverage and obtain exemptions.
why your doctor isn't happy to see you
-Woman has an HMO - the PCP she selected from the list provided by her HMO turned out to be a physicians assistant, who immediately referred her to a specialist; four weeks later finally saw the specialist who did not have time to answer her questions In the past, when doctors assumed responsibility for complex patients, they were reimbursed in a manner generally proportional to the amount of time required -Now in the "capitated" payment practices used by most HMOs, doctors are paid a small, fixed fee per year for each patient - regardless of how many visits, operations or extended hospitalizations needed -The fee is so small that is the patient needs to be seen more than 2 or 3 times a year, the physician will actually be working for nothing b/c the fixed costs of seeing the patient are not paid for by the HMO -Doctors who have a reputation for compassion and excellence who attract the largest share of the sickest patients now realize that they cannot make a living taking care of sick patients HMOs want doctors to be more "efficient" - meaning spending less time with patients and order fewer tests -Doctors have traditionally been expected to provide free care for the poor; it is only in the age of the HMO that they have to provide free care to the rich -Specialists sign the contract so they can continue to receive referrals from PCP's; thought that since the contracts applied to a minority of patients, they could make up for losses w/ other patients covered by conventional FFS insurance plans - eventually those other patients were "forced" to join HMOs as well -Failure and bankruptcy of many medical groups and offices - even the most esteemed practices in the community -Efficiency is rewarded, while quality, compassionate medicine is punished While more patients are driven into HMOs, many more find themselves w/o any HC whatsoever -"Big mistake to assume that market-driven, investor-owned, for-profit HMOs could be trusted to provide a fair balance b/w profits for shareholders and HC for the public -Solution: a single-payer national health plan; take out HC out of the hands of profit-driven corporations and put HMOs under public oversight
health plan should learn new rules to prevent balance billing
-under aca, if plan or policy includes emergency service benefits, then it must cover both in and out of network providers and they must have equal levels of restrictive administrative requirements
