Wednesday, November 20, 2013

Fwd: qotd: Low payment rates for exchange plans threaten adequacy of provider networks

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Low payment rates for exchange plans threaten adequacy
of provider networks
Date: Wed, 20 Nov 2013 12:40:56 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

Kaiser Health News
November 19, 2013
Doctors Complain They Will Be Paid Less By Exchange Plans
By Roni Caryn Rabin

Many doctors are disturbed they will be paid less -- often a lot less --
to care for the millions of patients projected to buy coverage through
the health law's new insurance marketplaces.

Some have complained to medical associations, including those in New
York, California, Connecticut, Texas and Georgia, saying the discounted
rates could lead to a two-tiered system in which fewer doctors
participate, potentially making it harder for consumers to get the care
they need.

"As it is, there is a shortage of primary care physicians in the
country, and they don't have enough time to see all the patients who are
calling them," said Peter Cunningham, a senior fellow at the nonpartisan
Center for Studying Health System Change in Washington D.C.

If providers are paid less, "are [enrollees] going to have difficulty
getting physicians to accept them as patients?"

Physicians are uncomfortable discussing their rates because of antitrust
laws, and insurers say the information is proprietary. But information
cobbled together from interviews suggests that if the Medicare pays $90
for an office visit of a complex nature, and a commercial plan pays $100
or more, some exchange plans are offering $60 to $70.

Insurance officials acknowledge they have reduced rates in some plans,
saying they are under enormous pressure to keep premiums affordable.
They say physicians will make up for the lower pay by seeing more
patients, since the plans tend to have smaller networks of doctors.

Comment: Insurers will be paying physicians less through their exchange
plans than they do through their existing commercial plans. If the rates
turn out to be typically 30 or 40 percent less, as this article
suggests, they will have problems maintaining adequate provider
networks. An insurance card is of little value if you cannot find
physicians who will accept it.

As we said from the start, those designing health care reform were
making a terrible mistake when they decided to make health insurance
premiums affordable while largely ignoring health care costs.

Look what they did:

* They assigned very low actuarial values to the plans that most
individuals will select, leaving 30 to 40 percent of health care costs
to be paid by the patient, though some will receive inadequate subsidies.

* They designed plans with very high deductibles, causing the large
percentage of patients who need less care to receive virtually no
sickness or injury benefits from their plans.

* They reduced the size of their provider networks which will reduce
spending by making care less accessible, especially specialized care.

* Now it appears that they will be reducing provider payments to levels
that will be rejected by many physicians. Although employer-sponsored
plans are moving in the same direction, it is likely that many
physicians will limit their practices to these plans and cash-paying
patients, while avoiding patients in the exchange plans and the
chronically-underfunded Medicaid program.

* As part of the SGR fix, legislators are considering not allowing any
inflationary increases in the Medicare program for the next ten years -
keeping the payment rates flat. If so, physicians are apt to leave the
Medicare program as payment rates approach that of Medicaid.

As we approach $3 trillion in health care spending, this is criminal!
For that kind of spending, everyone could have high quality health care.
Instead, we get a system that perpetuates disparities in health care
while creating financial burdens for precisely those individuals who
most need health care.

The entire health care system will not collapse, but this experiment
will perform so miserably that most will consider it to be a failure. We
don't need to go back to the drawing boards. We merely need to enact a
system that we already know will achieve our goals - an improved
Medicare for all.

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