qotd: Can the out-of-network problem be repaired with patches?

Kaiser Health News
November 6, 2015
Marketplace Plans Covering Out-Of-Network Care Harder To Find
By Michelle Andrews

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.

http://khn.org/news/marketplace-plans-covering-out-of-network-care-harder-to-find/

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Health Affairs Blog
November 3, 2015
A Tale Of Two Deliveries, Or An Out-Of-Network Problem
By Erin Taylor and Layla Parast

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.

http://healthaffairs.org/blog/2015/11/03/a-tale-of-two-deliveries-or-an-out-of-network-problem/

***


Comment by Don McCanne

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.