Marketplace Plans Covering Out-Of-Network Care Harder To Find
By Michelle Andrews
Kaiser Health News, November 6, 2015
Health plans that offer coverage of doctors and hospitals outside the plan’s network are getting harder to find on the insurance marketplaces, according to two analyses published this week.
Two-thirds of the 131 carriers that offered silver-level preferred provider organization plans in 2015 will either drop them entirely or offer fewer of them in January, an analysis by the Robert Wood Johnson Foundation found. Those cutbacks will affect customers in 37 states, according to the foundation.
Preferred provider organization plans, or PPOs, typically offer coverage for doctors and hospitals that aren’t in the plan’s network, but require consumers to pay a larger share of the cost. In contrast, health maintenance organizations, which make up roughly half of the plans offered on the exchanges, generally don’t cover any care provided outside the plan’s network.
Last year, many insurers shrunk the networks of providers in the plans that they sold on the marketplace.
A Tale Of Two Deliveries, Or An Out-Of-Network Problem
By Erin Taylor and Layla Parast
Health Affairs Blog, November 3, 2015
As co-workers and first-time moms-to-be, we shared much of the pregnancy journey together — including the same employer-sponsored health insurance plan. We even delivered within weeks of each other at the same hospital. For both of us, the key to managing the pain of labor and delivery was the epidural delivered by our anesthesiologists.
When it came to paying the bill, our hospital experiences diverged in one key way. Layla received an unexpected bill for $1,600 for anesthesiology services and warned Erin to expect the same. Yet Erin’s bill never came. Layla happened to deliver on a day when an out-of-network anesthesiologist was on call, while Erin was seen by an in-network anesthesiologist.
Patients who have gone out of their way to ensure they receive care at an in-network facility should not be surprised by bills for involuntary out-of-network services. One solution would be to require that all providers offering care at an in-network facility are included in the plan’s network. Absent that, a few policy changes in the current system could be a step in the right direction.
Make It Transparent
Hospitals could have patients preregister for a planned stay and work with the insurance company to provide each patient with the estimated total expected charges.
The key change here is that the estimated charges would include physician services for in- and out-of-network services. This approach would require the hospital to be straightforward with prospective patients regarding the likelihood of care being provided by out-of-network physicians
Make It Simple
Physician bills and insurance statements need to be simplified.
Clearer explanations of charges, reasons the insurance company did not pay the full amount, and why the patient is being charged would help consumers better understand their bills — and help prepare them to pay them.
Make It Available
Researchers and policymakers have questioned the limited hospital and physician networks in the ACA health insurance marketplaces, as these networks provide access to a smaller set of providers.
Some states, such as Texas, New York, and Louisiana, are tackling out-of-network billing, while legislation was recently introduced in Congress that would place limits on the ability to bill patients for out-of-network services provided at in-network hospitals.
Clearly spelling out expected health care costs, and the likelihood of out-of-network charges, would go a long way toward reducing the economic uncertainty associated with hospital stays — and help patients understand the billing statements they receive after discharge.
Blog Comment by Don McCanne, submitted but not published:
Our particular model of health care financing – a dysfunctional, fragmented, public and private multipayer system – is the most expensive way to finance health care, characterized especially by profound administrative waste. Trying to patch this system only adds further to the administrative complexity – in this case, the effort to create transparency and special handling of out-of-network charges and billing.
Modeling of health care financing systems has shown that the least expensive and most efficient are the national health service and single payer models. Considering our public support of Medicare, the single payer model would be the most feasible for the United States.
With the high numbers of uninsured and under-insured, with the reduced choice of care due to narrow networks, and with the increasing exposure to financial hardship due to shifting of risk to patients, we really do need to abandon the ACA experiment and move forward with a well-designed single payer system.
By Don McCanne, M.D.
One of the more nefarious methods that private insurers use to reduce their responsibility to pay for health care is to refuse to pay for health care services provided outside of the networks of contracted physicians and hospitals that they, rather than the patient, have selected. They have tightened the screws by shrinking these networks and by dropping some of the PPO plans which permitted at least some out-of-network coverage, but at reduced rates.
As the anecdote presented in the Health Affairs Blog indicates, limited networks can be quite unfair. The two authors of the blog, a policy researcher and a statistician employed by RAND, showed how the same employer-sponsored plan covered obstetrical anesthesia for one but not for the other, simply because by chance one anesthetist was in-network and the other was not.
Recognizing the unfairness of this, the authors recommend some policy changes. They recommend more transparency so you would at least know that the services would not be covered, though it would require more administrative services to obtain and communicate that information. They recommend that bills and insurance statements be “simplified,” though they are actually asking that additional information be required to clarify the network status of each provider involved – more administrative activity. They also suggest that legislation be passed to require special handling of out-of-network charges – yet more administrative complexity.
Unfortunately, this demonstrates the flawed approach to problems with our health care financing system that permeates the health policy community today. They accept as a given our fragmented system of financing health care, as modified by the Affordable Care Act. Their policy approach avoids carefully defining the fundamental problem and moves on with mere patches to our highly dysfunctional system. As this example indicates, the patches typically compound the problems, especially by adding more administrative tasks to our system that is already sinking with administrative overload.
So what is the fundamental problem with narrow networks? It should be obvious. They are designed to benefit the private insurer by shifting more costs to patients who unavoidably or inadvertently obtain care outside of networks. This is not for the benefit of patients; it is detrimental to patient care. Health financing systems should be designed to benefit patients, not multibillion dollar corporations.
So the fundamental problem is the existence of the narrow networks. They need to be eliminated. Along with the narrow networks, all of the other profound administrative excesses that uniquely characterize the American health care financing system need to be eliminated as well. They need to be replaced with an efficient single payer financing system.
Although the Health Affairs Blog posted numerous responses more or less commending the authors for their astute policy recommendations, they did not post my response which happened to be a proposal that would actually prevent the out of network injustices. For that reason, I have included it in today’s message so that it would have at least some limited public exposure. Fortunately, they did post a response by Thomas Cox PhD RN who calls for a single national health insurer.