HHS Message to Insurers: Do as we say, not as we do

In a 51-page February 4th letter to insurance companies that participate in the Federally Facilitated Exchange, HHS put insurers on notice that they may need to increase the size of their provider networks in 2015.

During next year’s QHP certification process, insurance companies will submit a list of their network providers and facilities, and “CMS will review the collected provider list to evaluate provider networks using a ‘reasonable access’ review standard, and will identify networks that fail to provide access without unreasonable delay.” This is a departure from the original practice of utilizing issuer accreditation status, identifying states with stringent review processes, or collecting network access plans as part of its evaluation of a plan’s network adequacy.

The letter goes on to say that if the CMS review “determines that an issuer’s network is inadequate under the reasonable access review standard, CMS will notify the issuer of the identified problem area(s) and will consider the issuer’s response in assessing whether the issuer has met the regulatory requirement…prior to making the certification or recertification determination.”

Additionally, HHS intends to propose a rule that Qualified Health Plans must “demonstrate that at least 30 percent of available ECPs in each plan’s service area participate in the provider network.” ECP stands for Essential Community Providers, which HHS defines as “providers that serve predominantly low-income and medically underserved individuals.”

Insurance companies that participate in both federal and state exchanges have been cutting their provider networks on some plans in an attempt to keep premiums under control. In fact, we’ve seen a resurgence of HMO plans in a number of networks, which feature limited provider networks with lower provider reimbursement rates and generally require a referral from the primary care physician to see a specialist. These plans were popular two decades ago but have declined steadily in recent years from a high of 31% of all covered workers in 1996 to just 14% in 2013.

What’s funny is that the same day HHS sent the letter telling insurance companies that they needed better provider networks, The Daily Caller reported that less than half of physicians in the nation’s largest cities are now accepting Medicaid. Their report was based on a survey by consulting firm Merritt Hawkins, which found that many doctors cannot afford to participate in the federal welfare program, which “cuts costs by reimbursing physicians at extremely low rates.”

Perhaps HHS has never heard that saying “what’s good for the goose is good for the gander”…

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