With healthcare payers increasingly relying on narrow provider networks to contain costs and achieve quality, California regulators are pressing health plans to blunt out-of-network costs and maintain accurate provider directories.
California insurance officials are drawing the line on health plans with narrow provider networks.
Emergency regulations announced on Jan. 5 by Insurance Commissioner Dave Jones "are meant to address the deficiencies in the market we have been seeing," says Janice Rocco, deputy commissioner for health policy and reform at the state Department of Insurance.
"The department received more complaints in 2014 over access to in-network care than in previous years," says Rocco. In the prepared statement announcing those regulations, DOI officials detailed some of the consumer complaints:
- Trouble getting appointments with doctors
- Traveling long distances to receive in-network medical care
- Seeking care from doctors who appeared in their health insurer's provider directory but who were not actually in the health insurer's medical provider network
In 2014, two of California's largest commercial health insurance carriers, Anthem Blue Cross and Blue Shield of California, offered narrow provider networks on The Golden State's new public exchange, Covered California. Both carriers drew fire over network adequacy, including a lawsuit 33 health plan members filed against Anthem in August 2014 and investigations launched by the state Department of Managed Health Care.
The DMHC, which is under the direct authority of the governor's administration, has regulatory oversight for most health coverage in California, including more than 9 million people covered through Medi-Cal and coverage purchased by individuals and their families through Covered California.
In November, the DMHC released the final report of a "Non-Routine Survey" of Blue Shield of California based on 2014 data that found significant inaccuracies in the provider director for the health plan's narrow network.
The report revealed that "a significant percentage (18.2%) of the physicians listed in the directory were not at the location listed in the Provider Directory and that a significant percentage (8.8%) were not willing to accept members enrolled in the Blue Shield's Covered California products, despite being listed on the website as doing so."
Through a spokesman, Blue Shield of California declined to comment. Anthem did not respond in time for publication.
Rocco say the emergency regulations, which will become effective after a state legal review is completed, feature several new consumer protections such as wait-time standards for a range of medical services appointments and requirements on payers to provide information on providers in their network.
Additionally, health plans must update provider directories on a weekly basis, and they must make provider information available to the public online and in "hard copy" upon consumer demand.
The emergency regulations also set a strict standard for out-of-network care. "If they don't have a provider in-network who is accessible, the health plans have to arrange for a provider out-of-network," Rocco says. And "the cost sharing has to be the same" to protect consumers from unexpected healthcare expenses.
State and federal regulators are working together in California to achieve "expansion of insurance," Rocco says. "Without access to care from doctors who are in the network, insurance coverage offers limited value."
When drawing the line on narrow networks, regulators have to consider patient need as paramount. "Patients have to have access in a timely manner to meet all of their healthcare needs," she says.
California a Sets Bar for Network Adequacy
Rodger Butler, spokesman for DMHC, says the agency has followed state laws for network adequacy that were in place before passage of the Patient Protection and Affordable Care Act in 2010.
"Health plans under DMHC oversight are required to provide enrollees access to primary care physicians within 15 miles or 30 minutes of their homes," he said via email. "There are some exceptions for rural areas; for example, when there isn't a hospital or doctor's office within 15 miles of a person's home. In these cases, the plan may request an alternate access plan."
Butler says there are also quantitative physician staffing standards for provider networks. "Plans are also required to have a PCP-to-enrollee ratio of 1 to 2,000 and an overall physician-to-enrollee ratio of 1 to 1,200. The number of enrollees a PCP may be eligible to oversee increases by 1,000 for each full-time physician assistant or nurse practitioner under the PCP's supervision."
Health plans are required to provide "reasonable access to specialists," Butler says. "The law does not establish specific time or distance requirements for specialists, as there are a wide variety of specialists and their availability varies based upon their rarity. If for some reason a health plan does not have a particular type of specialist that an enrollee needs to treat a condition, then the health plan is obligated to find such a provider and cover those services. Health plans are also required by law to meet the state timely access standards."
Narrow Networks 'Infinitely More Important Now'
Micah Weinberg, PhD, who was elevated this month from senior policy adviser to president at the San Francisco-based Bay Area Council Economic Institute, says narrow networks have emerged as a huge factor in California health insurance markets.
"It's not that it was unimportant before," he says. "It's just infinitely more important now… We've limited the things that health plans can do to design networks and benefits."
Weinberg says the California DOI's emergency regulations for network adequacy carry symbolic weight compared to the stronger watchdog role of the DMHC. "For total healthcare coverage oversight, we're talking about under 20% and shrinking under DOI." The state's insurance commissioner, he notes, is an elected official outside the direct authority of the governor.
The DMHC appears to be showing at least a measure of resolve on narrow networks. "The DMHC has conducted studies and issued some warnings to different health plans," Weinberg says. "They're not political the way the DOI is political. Dave Jones is on the short list to be the next governor."
With the PPACA-spawned exchanges expanding the individual health coverage market, Weinberg says health plans and regulators are under pressure to carve out standards for narrow networks. "The insurance companies are changing their business model for the individual market overnight," he says.
Christopher Cheney is the CMO editor at HealthLeaders.