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Rules to Rein in HIX Narrow Networks Could Drive Away Payers

Christopher Cheney, for HealthLeaders Media, March 11, 2014

Healthcare providers have raised alarms over narrow provider networks in the public health insurance exchanges, but Moody's Investors Service says proposed rules to open up the networks could drive health plans to drop out of the new market.

Proposed federal rules that would limit the ability of health plans to craft narrow provider networks for the PPACA exchanges would benefit some hospitals, but tighter regulation could create an unbearable level of risk for insurers, market analysts say.

In a healthcare "sector comment" released last week, Moody's Investors Service predicts that plans to limit narrow networks in 2015 would benefit rural hospitals and safety net hospitals because those facilities are the most likely to be left out of a narrow network.

"If [hospitals] are considered essential, that would protect them from being excluded from a narrow network," Moody's Senior Vice President Lisa Martin said Monday of the new rules under consideration at the federal Centers for Medicare & Medicaid Services. "[They provide] protection in terms of market share."

The Moody's sector comment singles out CMS's plan to increase the percentage of "essential community providers" included in a health plan's provider network for a public exchange: "While not mandating the inclusion of a specific provider, the proposal requires insurers offering plans on the exchanges to provide adequate access to essential providers in order to be certified as a qualified health plan. Adequate access means that 30 percent of essential community providers in the plan area must be included in the network, an increase from 20 percent under current regulations."

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