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Network adequacy: Balancing cost, access and quality

Transcript from a Jan. 21, 2015, meeting of AHCJ's San Francisco Bay Area chapter, co-sponsored by the Alliance for Health Reform and the Association of Health Care Journalists.

With thanks to the Robert Wood Johnson Foundation for its support of this briefing.

This is an edited transcript.

Speakers:

  • Larry Levitt, senior vice president for special initiatives, Kaiser Family Foundation
  • Betsy Imholz, special projects director, Consumers Union
  • Anne Price, director of the plan management division, operations, at Covered California.
  • Emily Bazar, columnist and senior writer, California Health Care Foundation Center for Health Reporting
  • Marilyn Serafini (moderator), vice president for policy, Alliance for Health Reform

Marilyn Serafini: I want to thank both the Association Health Care Journalists for partnering with us on this event, and also the Robert Wood Johnson Foundation for making this event possible. We are here to talk about the subject of narrow networks. We know that this is a phenomenon that’s really taken root. With the Affordable Care Act and health plans no longer being able to work to lower their costs with preexisting condition limitations or denials, the ACA also made it impossible for health plans to put restrictions on lifetime limits and other tools that the health plans were using to try and keep their costs down. So with that, a lot of the health plans very quickly in the first year turned to narrow networks, cutting out some of the most expensive providers with hospitals and physicians and other providers in their networks. So while some folks have expressed concern about access, many people have said if done the right way this could create competition and keep costs down, which would be a good thing for consumers. So there’s a lot of discussion about this, especially now that we’ve been through this a year, and we’re right in the middle of the second open enrollment period.

The Alliance for Health Reform is a nonprofit, nonpartisan organization. We work out of Washington, D.C. We have two senators who are honorary chairmen. Senator Rockefeller, who is our founding honorary chairman, just retired. Senator Ben Cardin, a Democrat from Maryland, took over, and also Senator Roy Blunt, a Republican from Missouri. They keep us honest and nonpartisan in everything that we do.

Larry Levitt: I’m actually going to start by disagreeing with Marilyn, not about the Alliance for Health Reform, which is a terrific resource, but about the idea that narrow networks originated with the Affordable Care Act. In fact, narrow networks are limited networks that very much predated the Affordable Care Act. Selective contracting by insurers has always been their primary tool for controlling costs. In fact in California Kaiser Permanente is kind of the definition of a narrow network in some ways. But historically while networks have been limited, they’ve generally been quite broad, including large numbers of doctors and hospitals. There have been attempts over time by some insurers in California to create narrower networks for employers, who of course provide most of the health insurance in the United States. But those have generally been met by cold shoulders on the part of employers. The whole reason employers offer health benefits to their workers is to attract a quality workforce. So the idea that you’re going to take doctors and hospitals away from your workers and piss them off in the process turns out to be not so attractive. If you’re a large employer it’s very hard to satisfy the bulk of your workforce with a narrow network plan. But even broad networks have posed some tough decisions for employers. I sat in on some focus groups recently with human resources managers for small and midsize companies.

They all said that when choosing a plan or deciding whether to switch insurers, the first thing they do is they collect a list of all of the doctors that their senior executives use and they match that up with the networks of all of the insurers, and that’s how they pick an insurer. AFHR didn’t create limited networks, but I would agree with Marilyn that it has accelerated the trend towards narrower networks. That’s particularly true in California and particularly true in the individual insurance market or in the new marketplaces like Covered California. Marilyn had mentioned one of the ways in the individual market that insurers used to keep costs and premiums down was by excluding people with preexisting conditions. That’s no longer an option, so they needed to look to other ways of doing that and narrow networks have been one of those ways. Insurers also went into this market expecting consumers to be very price conscious. These are consumer buying their own insurance, often paying either the whole premium or paying the full difference in premiums between a low-cost plan and high-cost plan, even if they’re getting help in the new ACA marketplaces. It turns out people have actually been very price conscious, looking primarily at the premium when choosing their plan.

The data shows that people have gravitated towards one of the two lowest cost plans in the exchanges, usually in the silver or second tier. Insurers have been able to attract big market shares by lowering their premium through narrow networks. Some of our polling supports that. We asked uninsured people and also people with employer coverage, “Would you prefer a plan with a lower premium in a narrower network, or would you be willing to pay more for a broader network?” The majority of the uninsured in particular said that they would prefer a lower premium plan with a narrower network. And these plans are definitely lower premiums. There isn’t a good analysis of this, but McKenzie had one analysis which found that narrower network plans offered by the same insurer and the same type of plan had a twenty-six percent premium advantage over plans that covered a broader set of hospitals. They looked particularly at hospitals.

And my conversations with insurers suggest that that’s probably a little bit overstated. I would think narrower network plans generally have a price advantage of somewhere in between 10 and 20 percent, but there is a significant price advantage. And as I said, people have been very price conscious in choosing which plans they enroll in, so all of this raises a couple of different issues. The first is whether these plans are so narrow that they’re inadequate, at least in a legal sense and in fact failing to deliver the benefits that they’ve promised to deliver to consumers. And second is even if they need minimum standards of adequacy, how can consumers navigate the system and choose plans effectively with the proliferation of narrower network plans? So let me start briefly with the issue of adequacy. There’s not a lot of evidence at this point I would say. Betsy may disagree. That these narrower network plans are so narrow that they’re actually inadequate, at least in a legal sense. But we’re somewhat challenged here by the fact that the regulation in this area can be quite loose. It depends not only on the state, but also in the type of plan. To start at the top level with the statue, the Affordable Care Act doesn’t provide a lot of detail here. There are essentially two requirements in the Affordable Care Act. One is that marketplace plans have to ensure a sufficient choice, a fairly lose standard. And they have to include what are called “essential community providers,” providers that serve lower income patients. Once the law was implemented through regulations not a whole lot of detail was actually added.

The final regulation from HHS said that plans had to provide benefits without unreasonable delays, this is again a fairly loose standard, and to also make provider directories available publically. In the few years the way HHS has implemented this in the first year, 2014, they relied on accreditation bodies, in particular two organizations, NCQA and URAC to accredit plans. So if a plan was accredited by those bodies, then they were presumed to have an adequate network. Those bodies generally did not require specific standards or do an independent review of the networks, but instead required that insurers have their own policies or have their own standards.

For this year and for next year, HHS has said they are applying what’s known as a “reasonable access standard.”

So they’re looking at the plans. If they have any reason to believe that the plans are not providing reasonable access to providers, then they do further investigation, but again without a lot of detail of what that actually means. So far a lot of this has been left up to the state, which has historically been quite uneven in how strictly they police networks. First as I mentioned different plans tend to have different standards. Plans with HMO’s are more likely to be subject to rules around network adequacy than more loosely organized PPO’s. Some states, California being one of them and Texas being another, have specific standards for two factors. One is the ratio of the number of providers to the number of enrollees so that you have enough providers to serve the number of enrollees you’re signing up. And also what’s known as “Time and Distance Standards.” So essentially looking at how accessible providers are based on where they are to consumers in the plans service area.

The federal government has similar standards for Medicare plans and has said that they’ll consider these numeric standards in the future for marketplace plans, but again have not gotten there yet. Other states have chosen to have more flexible standards, not a strict standard for a provider to enrollee ratio or time and distance, but a more flexible standard that they apply to plans. The other regulatory action in this area has been through the National Association of Insurance Commissioners, which has a model law. Any IC has model laws on lots of different things. There’s a requirement that states actually put in place those laws, but they’re meant to be sort of guides for states. In this case very few states have actually taken up the model law.

About ten states have put in place either all or a part of the model law and another ten have done something similar.

The Law leaves a lot of details up to the states, even if they put in place a model. The other approach that’s been considered is providing something of a safety valve for patients, because it is very hard to police or determine the adequacy of these networks upfront and approaches to essentially after the fact provide consumers with this safety valve if they run into trouble. For example, the Federal Government has this, but only for preventive benefits. The ACA plans have to provide preventive benefits with no patient cost sharing. And the regulations say that if you’re not able to find a provider for those preventive benefits, let’s say for a colonoscopy or a mammogram that you can go out of the network and get those benefits. The plan has to provide you with those benefits still for no cost sharing. But that does not apply for anything beyond preventive benefits. It’s just preventive benefits. But similar provisions do exist in states for benefits beyond preventative care. There are two regulatory bodies in California, the Department of Insurance and the Department of Managed Health Care. The Department of Insurance is run by an elected insurance commissioner. The Department of Managed Health Care is run by an appointee of the Governor. The vast majority of health insurance plans are regulated by the Department of Managed Health Care, though there are a few cases where they are regulated by the Department of Insurance. But HMO’s and most HMO like plans are regulated by the Department of Managed Health Care.

The insurance commissioner recently issued emergency regulations to provide this kind of safety valve for all types of plans that are under his control. I believe this similar provision exists for HMO’s as well in California. Similar issues can arise when a patient is using their plan when they’re seeking care in an in-network facility and in particular a hospital where the patient does her due diligence and go to an in-network hospital, but end up getting treated at that hospital by out-of-network providers. It might be a surgeon. It might be an anesthesiologist or a radiologist. It might be a lab that’s reading her lab results, and she often has no way of knowing that this is going to happen once she’s chosen the in-network hospital. Again these new regulations issued by the Department of Insurance start to get at this a little bit by requiring network facilities, so network hospitals to inform a patient ahead of time if any out-of-network providers will be caring for her while she’s getting care. There’s no requirement that they be a network, but at least informing the patient that they might be. And so this starts to gets beyond the question of just regulation, but how consumers actually navigate this system. This gets to the issue of transparency, how well consumers actually know when they’re choosing a plan or even using a plan of what the network looks like.

Provider directories are now publically available. Plans are required to provide them, but there continues to be questions about how accurate these directories are.

And depending on the state, they’re updated at different intervals throughout the year. So how up-to-date and how accurate they are to begin with. Not all of this is within the control of insurers. Providers may stop taking patients or may drop out of a network and the insurer has to keep up with that. Directories are also not always easy to use. They’re within the control of the insurers, so they vary from insurer to insurer. Typically what you have to do when you go to one of these directories is you can search for a particular doctor or a particular hospital and it’ll tell you whether that doctor or hospital is in the insurer’s network. But if you’re choosing a plan, you may have multiple doctors that your family is using and you’ve got to do this for every doctor and for every plan you might be considering. The LA Times had an interesting solution to this. They’ve got a data journalism project where they through a public records act request got the provider directories and created an interactive map-based app where you can actually look geographically which providers are in your area and then see which plans they’re in. But that’s certainly not something that exists everywhere and there’s no guarantee that app will be up-to-date. There’s also a fundamental challenge here for patients in that you may know who your primary care providers are or who your family member’s primary care providers are. If you have a chronic illness and you’re seeing a specialist regularly, you may have a relationship with that specialist. But it’s just the nature of health care that you don’t always know what’s going to happen to you. So you may be healthy now when you’re picking a plan, but you don’t know that six months from now you’re going to be diagnosed with diabetes or a heart condition and all of a sudden you’re going to need a specialist. So when you’re choosing the plan you have no way of knowing that you need to look for a cardiologist and which cardiologist is in your network, because you didn’t know you needed a cardiologist at the time.

So in some sense what you would ideally want is some kind of rating system that tells you whether an insurer is a broad network or a narrow network, so at least you’d have a sense of what you’re choosing when you’re making that tradeoff between the premium and the network. And that may not be obvious to you if you’re just searching for your family’s primary care providers. In closing I think it’s fair to say that these narrow networks are here to stay. If you talk to insurers they certainly feel like they made the right marketing decision by narrowing networks and lowering premiums in the first couple of years. There may be a backlash at some point, but as of now many people buying coverage seem to be willing to have these narrow networks in return for lower premiums. We may actually even be seeing this expanding to the employer market as well. Lisa’s written about the current fight going on between Blue Shield and Sutter, which could affect a significant number of patients with employer-based coverage. It remains to be seen that this fight may be all about brinkmanship and they’ll reach a deal soon. But it’s at least an indication that Blue Shield, a major insurer in the state, is willing to start dipping their toes into the water with narrower networks for employer-based benefits as well as the individual market.

Marilyn Serafini: Thank you Larry. We’re going to move now to Betsy.

Betsy Imholz:  There’s no question that it’s an extremely dynamic point in history in the health care marketplace, and the network issue has certainly garnered a lot of attention. I do agree with Larry that the narrow network issue coincides with the ACA and may be accelerated by it. But it was going to happen anyway, because we’ve all come to recognize I think that health care costs are spiraling out of control and we do need to find ways to rein them in. The narrower networks are one technique that’s put forward to assume that health plans can negotiate hard with providers, guarantee provider a volume of care, therefore costs will go down to the plans and hopefully be passed onto the consumer and then everything will be stabilized. That’s the theory. I do think that it’s early on, that the evidence isn’t fully in yet. I think we need more time really to figure it out. But it does seem to have lowered premiums somewhat and that gets us then very closely to the question of network adequacy.

Consumers Union, who publish Consumer Reports, doesn’t oppose narrower networks so long as they are sufficient in terms of the network adequacy standards in the state, that the savings are obtained and are actually passed along to consumers, and that the quality of the providers is of good quality.

Those are all “ifs,” and I think we’re waiting to see what happens out there in the marketplace. Also, I think we need to be able to signal to consumers what they’re getting, “Is this a very broad network, a narrower network, an ultra-narrow network?” And I think that’s another sort of evolving policy thing that we need to work on more and test with consumers to see how we develop those kinds of measures. As Larry said, network adequacy really is a term of art. It’s a legal regulatory standard that only the regulators can enforce, and it involves these things like time and distance standards, how quickly you can get an appointment, and in some cases provider ratios. But only the regulators, the Department of Managed Health Care and the Department of Insurance in California can enforce those. I would also add in a third agency just to make things really complicated, which is the Department of Health Care Services. It has a role in ensuring the adequacy of Medi-Cal plan networks. But we also have as Larry is describing other players now increasingly involved and concerned about networks. I think that’s partly because it’s not just network adequacy, the legal standard that counts, but also for consumers its network satisfaction. Maybe they meet the letter of the law, but do I feel okay about it? Is it really what I wanted? Do we feel accepting of it? Will we buy that product from Covered California? So we have CMS coming in. Larry described some of the regulations and the regulatory approaches there are starting to take exchange plans for example. And the NAIC, the National Association of Insurance Commissioners, and their Model Act. Then Covered California, our exchange also having active purchaser status. That is they will also negotiate with the plans. They don’t have to let all plans in. They can pick and choose and they have contracts with these plans. I’m sure that Anne will talk more about how they’re exercising that.

Marilyn said to me, ‘So with all of these players, what’s the best thing? What works for California?’ What I’ve said is that the Affordable Care Act is there and there are standards and we need them. All states need them. Some states need to come up in their network adequacy standards. They don’t have anything much going on. Other states like California have really pretty rigorous standards going back to the Patient’s Bill of Rights days. We had some good things put in place in California, but the federal ones need to be a floor to set the minimum standards. And then allow states that have a vision or an aspiration or a need based on their unique geography or market conditions to go further. So similarly the NAIC, the National Association of Insurance Commissioners, they call it a Model Act, but from the consumer advocacy side Model is maybe not the quite word, because these Model Acts are the product of a lot of negotiation amongst Commissioners from all kinds of states. Red states, blue states. They can often be a lower common denominator than we might like here in California, especially where we like to push the envelope. We do think the revisions that they’re proposing are good ones. It was time to update the Act and we’re really pleased about those, but we want to push them even further and make it a real model that’s sort of an aspirational model. I’m not sure that we’ll achieve that, but I think we have to give it a try.

Marilyn also asked me to talk a little bit about the state of play in California. So what’s going on here? If we have stronger rules and as I said we’re leading and aspirational and we’ve got some good things from back in the olden days which we do have, why are we still having problems? I think what it really comes down to is this is a very complicated thing to monitor and to regulate. So we have room for improvement in our standards it’s true, but then it’s not just having the standards but actually enforcing them and having that ongoing monitoring system and also aligning them between the two regulators for example, the Department of Insurance and the Department of Managed Health Care. I’ll give you an example of a difference. In 2002 we passed a law in California requiring that the regulators come up with standards for timely access to care. Because of the different political structures that they come from, one being an elected official and the other being appointed by the Governor’s Office, they did their own regulatory processes. And the Department of Insurance at that time did geographic standards. You have to be I think within thirty miles, or ten miles and thirty minutes from the consumer’s residence or workplace. And the Department of Managed Health Care adopted a different standard, which is the Timely Access Standard based on wait time for appointments. So we’ve got two both very good, but different standards. And it makes for a very confusing marketplace. I would think also for the regulated entities as well as for consumers to figure out what exactly are the rules. The commissioner has just put forward emergency regulations, really thorough good ones. I think they got closer to aligning the two. They are I would say though emergency regulations and the Office of Administrative Law as a procedural matter has to approve them as emergency regulations. We’ll wait to see if that happens. If it does then they’re only in effect for a hundred and eighty days. As everything in health care and especially around the Affordable Care Act, everything is always an influx. Just don’t take it as a given that those regs are yet in effect. Furthermore around network adequacy, the regulators checking on this stuff are checking at a point in time. It’s really a snapshot. When you file you may have a perfectly adequate network. But maybe next month a doctor retires they die, or their contracts are terminated. It’s very difficult I think to keep up with the assumption that a network is an adequate one.

I will spare you the details of our exact standards for network adequacy unless you want them in the question and answer period. We can’t ignore the fact that in the early stages of open enrollment in the first open enrollment period, there were huge outcries from consumers about problems in narrowed networks. It came up particularly around products in Covered California. We believe that some of those networks really have broadened and improved. I know that Anthem said they have increased their networks between January and August of 2014 by thirty-eight hundred doctors. Blue Shield of California as well had a very narrow network. In Alameda County it was just Alameda. You couldn’t go outside of Alameda County for your care. They broadened that to allow people to come across the Bay to get providers. So there definitely has been whether it’s from public pressure, from journalism, from regulators, from Covered California, for whatever reasons the plans did start to broaden their networks. We hope that in 2015 we’ll find that people are more satisfied with those. Because of the complaints the Department of Managed Health Care have gotten about network adequacy, did what they call a non-routine survey.

It’s sort of like an audit of the two biggest plans in the exchange, Anthem and Blue Shield of California and the findings are in your packet that came out in November of 2014. They made some significant findings.

At Anthem for example 12 percent of the providers were not at the location listed. Thirteen percent were not accepting new patients.

And in addition, more than ten percent of the providers had changed in the network from the original filing and that they should have reported that and didn’t. As well there are a couple of law suits. You’ve probably written about them or have read about them. Some were against Anthem that involves the adequacy of their pharmacy networks. For HIV patients there were requiring people to use their mail order service and not go to the community pharmacy. In essence the community pharmacies were becoming out of network pharmacies with much higher costs. That’s been challenged in a couple of law suits in at least three lawsuits that I know of. There are challenges of allegations of misrepresentation of networks, false listings in provider directories, getting consumer’s information about the narrowing of the networks not until it was too late to change plans. These suits go on.

I want to take a minute to talk about provider directories that Larry raised as well. The problems with provider directories are age-old problems. They predate the ACA, but I think they’re really taking on new meaning and importance in visibility because the ACA actually gives us a chance now to shop for insurance. Because there are no more preexisting condition exclusions, we have an array of plans both on and off the exchange. People are really now getting the first chance to really, really dig into them and to use them. Our research shows exactly what Larry was saying, that people care about two things when they’re choosing a plan. Premium is number one and closely behind that was who my provider is. It’s vitally important that people know when they’re choosing a plan and then of course when they go to use the plan as well, they need to know who’s in the network and out of the network. Because as you know if someone’s out-of-network, the cost can rise very considerably and end up with those surprise medical bills. We think it’s really time to update the law about provider directories. The original laws in California that were written and that are on the books now were written more than a decade ago. That was the era of paper, the dark ages. Now we are in a whole new world. With web-based directories it should be somewhat, maybe a good deal, easier to update them more frequently and less expensively. We know we’ll probably never get to a hundred percent accuracy because of the nature of the continual change, but certainly we should have better accuracy.

Covered California to its credit did try to do a consolidated directory. And because of some of the things that Larry mentioned about the inconsistencies among plans and frankly the inaccuracies that are in the plans themselves right now, it was difficult to get a really accurate consolidated directory. So they took that down, but I think that it’s maybe a little unfair criticism that the exchange got, because all they did was to use the data that they were given by the plans, which in some cases was not up-to-date. I don’t want to neglect Medi-Cal either because it’s a huge population in California. Those directories as well have been found to have very significant flaws and some good reporting by the Hannah Guzik at California Health Report. Her Secret Shopper investigation of those directories I think had some really significant findings. More than half of the doctors for example in directories in three counties were not accepting new patients. So this calls into question also, “Are the networks adequate, as well as the directories being inaccurate?”

Q: Doesn’t that also call into question that they’re famous for paying doctors very low amounts. And then to turn around and say, “Oh, we can’t find enough doctors.”

Betsy Imholz: It’s a problem. No question. That’s another age-old problem. We really think that several improvements need to be made and can be made in the directories. And within the next week or two Senator Ed Hernandez, who’s the Chair of the Senate Health Committee, is going to introduce a Bill. I would ask you to watch for it, Consumers Union is a co-sponsor of it, to try to update the law on directories to make the updating requirements more frequent, make it easier for people to report inaccuracies and to get them corrected to create maybe a standard template, and to use these directories as well for sort of a check point against network adequacy. The final point that Marilyn also asked me to touch on is consumer interest and provider interest. I certainly don’t speak for providers. I’m not a provider. I never have been. But I can say just a couple of things about that, which is that in this environment it’s sometimes the case that provider and consumer interest will align. Not that providers are all monolithic groups. Some as you know are supported by the ACA and others opposed it. But certainly for example on the provider directories there’s going to be a natural alignment for the most part. They would like accurate directories and consumers need them. Two things that come to mind about areas of difference, or around the issue of balance billing, and that is that consumers would like to see in those situations where they have to go to an out-of-network provider, an assurance that they’re not going to get billed for any difference in what the provider got from what the insurer gave them from what their actual billed charged are. Providers don’t always like that. We already have a law in California for those plans that are regulated by the Department of Managed Health Care in emergency situations. If you’re in a emergency situation, you can’t be billed by the provider for any difference in amount from what the insurer received. But there are gaps in the law there. That’s a place where consumers and some providers will part company.

They’re not going to charged. It’s an out-of-network provider who would bill a larger amount than they actually received from the insurance plan. And so sometimes what happens is they are protected in their health plan, but they’re not protected in terms of their provider. The provider may come to them, which happened to me by the way in the past year, with a surgery and an in-network facility, but an anesthesiologist who wasn’t in-network, who came back with a nine hundred dollar bill.

In emergency situations and for those plans licensed by the Department of Managed Health Care, which is most of them, but still there are gaps. And then the one other place of possible difference between physicians and consumers that I can see is frankly around narrower networks, because narrower networks if they really do cut costs and cut premiums and are sufficient, that might not be a bad thing. I mean we do need to control costs and I’m not sure that all physicians would feel great about that. So I tried to find the differences for Marilyn.

Anne Price: I wanted to start my presentation with a quick story to provide some context. When my daughter was just shy of six-months-old, she was diagnosed with neuroblastoma, which is a cancerous tumor that was found in her chest area. I won’t go into detail of how lucky we were that we found it so soon, but I will tell you about the results. My daughter is now a beautiful seventeen-year-old girl who will be attending Oregon State this fall and majoring in science and she wants to become a doctor. The relationship that I had with her team of doctors throughout her life has been very personal and based on complete trust. I have experienced the notification that my daughter’s pediatric oncologist was no longer covered by my insurance. So what did I do? I researched my choices. I looked at the plan choices that my husband and I were able to obtain through our employer coverage. I did lots of checking between plan directories to make certain that the new plan I was considering had my doctor in their network, and imagine this seventeen years ago. As we’ve already talked about, directories weren’t online. They were books. They were paper books and as soon as you got them they were probably already outdated. If you called the provider office, they generally didn’t know what plan they were contracted with and they did not know what product generally they were contracted with. So the only way to confirm with some degree of certainty was to call the health plan physically, get them on the phone and confirm if the provider was in their network. I eventually was able to change through open enrollment to a new plan where we did have our oncologist in-network.

So if we flash forward to today, as you know things are much different and we’ve talked about this prior directories are online. But are they any more accurate? Provider offices seem to be more engaged with understanding what insurance they take, but really do they know? I think in the early days of the ACA we found that they didn’t know. There was a lot of confusion. So who has the responsibility of making sure consumers are choosing plans where they’re able to see the provider they wish to see and who has the responsibility of making certain that the provider information is as accurate as possible given this constant degree of change? And I would say that the responsibility is shared between health plans, medical providers, regulators, and consumers. I will also say that at Covered California we do believe we have a responsibility too. That responsibility is to make sure that we offer our consumers meaningful choice in all areas of the State and that we work with our contracted health plans to make sure that we can provide as much transparency as we can, given the technology limitations that we have and we want our consumers to make educated plan choices. So I will agree with both Larry and Betsy that narrower networks have been around for a while. In fact I’ll go even further to say Larry that they are already in the employer group market. CalPERS in 2005 limited their hospital provider networks significantly with Blue Shield by cutting out high cost providers throughout the State. And then in 2008 they further limited their physician profile and had their first narrower network by medical groups.

I want to start with consumer choice, because for Covered California consumer choice is a combination of the plans that we have available and in what areas that we have them available. There’s been a lot of talk about this lately. The majority of our members have three carriers to choose from in the State of California. And so among those carriers and there also these different tiers, there’s quite a portfolio for members to choose from. There is approximately eleven percent or a hundred and twenty thousand members that have two carriers or less. And three percent of that, twenty-nine thousand only have one carrier. These areas are in Northern California, Monterey, Santa Cruz, and San Bonino. And this is not new to the ACA that the plans have always had difficulty contracting with providers in these areas because there’s not as much competition. They need to be able to have contracts in place that they can deliver a rate that will be affordable. Even though we know this exists, we still recognize that it’s important for our members to have a choice and we are currently working with our contracted health plans to expand coverage in these areas. We have made some progress. In fact just at the board meeting last week our board did approve to allow new plan entrance in 2016 to specific geographic areas where we have limited plan choice. Our current plan partners have stepped up to the plate to further expand in some regions as well.

Q: Can you tell us what the plans are?

Anne Price: I can tell you where the plans have proposed to expand to so that there will be complete plan choice. That would be in the areas of Placer El Dorado County, Monterey. There are areas in Northern California, but Northern California will still be open because we still have areas where there are only two plan choices. The only reason I can’t tell you which plans are expanding is because that hasn’t been done yet. It’ll be for 2016. Again the board has made the decision that we will allow new plans to submit applications. This was just approved last week, but I want to stress the importance of when we look at the plans that have submitted applications, what we’re looking for is that the plans offer varying network options with contracted providers that do not overlap. It wouldn’t be of much value to consumers if we had seven plans that all had the same provider network. The goal would be to have an offering of the different providers throughout the State so that members can make this choice to choose a plan that their provider isn’t and not be limited to plans that do not cover their providers. We just did this analysis. We have currently across all plans sixty-one thousand unique physicians. That is greater than seventy-five percent of all active licensed nonhospital-based physicians in California. We would love it to be a hundred, but you can never be to a hundred because not all providers contract with health plans. But greater than seventy-five is certainly in the second year of the ACA a good number to have. In terms of hospitals, there’s greater than ninety percent of all licensed acute care hospitals in California.

Another area of focus related to providers, and Larry had referred to it, is that we are interested in essential community providers. We don’t limit ourselves to essential community providers. We also look at an expanded list. One thing that we do is we get provider data from our health plans on a quarter bases, and just starting in 2014 we worked with our largest contracted health plans. There are four, and that covers about eighty-eight percent of our population. We overlay their provider information with census data, as well as Covered California data to understand areas throughout the State that have more vulnerable populations based on income and potential access issues. We met with each of the health plans to let them know where they were at in terms of contracting with these providers in some of these areas, and we’ll be meeting again with them this quarter to see what kind of progress they’ve made. This is something that we have a contracted performance guarantee in place with our plans where they have to meet a certain threshold for essential community providers. We’ve already talked about this a bit, but with regards to transparency. It’s one thing that we have a great amount of providers, but it’s now getting that information into the hands of our consumers so they can make appropriate choices for themselves and their families.

 It would be ideal if we were able to have a cross plan provider directory that members could look at and easily determine what carrier had their providers. I know that Larry referred to the LA Times and that data was taken from Covered California with a PRA request. But if you looked further into that detail, the details still had the same issues that the provider directory that we put up had. That’s because that information is coming from the plans. As the audits had pointed out, that information is not as accurate as it could be. We’re interested in having that, but at the point where we’re at with the DMHC audits that occurred and with the issues that were found, the plans are taking correction and actions on their provider data to improve the directory. So we’re not really at a point where we believe we can offer anything of value. And I would say that we’re still trying to understand if Covered California is the right place to provide that, because as Betsy talked about we have Medi-Cal too. So who is the right entity to put out a statewide provider directory? As we figure that out there could be an interim option. One thing that we’re looking at is could we have a limited directory that limited to hospitals, understanding that it doesn’t change as often as the medical providers. So that’s an option we could look that. Considering what I talked about at the beginning of this presentation, we have come a long way since paper. Our consumers do have the ability to look at a plan through their link and to look at what providers are available by each plan before selecting a plan.

Q: Anne, I wanted to ask you a question about the statement you made earlier on this comment, which was to share responsibility. As a consumer advocate myself though, I do worry that if no one has the ultimate responsibility then there’s a potential for the consumer to never have the clarity that he or she needs. What are the perspectives for example on the provider for being responsible for sharing that information? And to throw my own story in here, I recently visited my dentist. Luckily my billing balance issue was only seventy dollars, but I was surprised to find my dentist is no longer in-network. I sure would have liked to have known that at the time that I scheduled my appointment or least when I showed up for my appointment. I can imagine for many people it’s a thousand or a ten thousand dollar issue.

Anne Price: Ultimately in California the regulators I would say have the responsibility of ensuring that the plans have accurate provider data. They have to assure that the plans have adequate provider capacity, access requirements. However, as you pointed out, the providers also have a responsibility. They don’t have the ultimate responsibility, but they do have a responsibility to the health plans to inform them of their changes. Health plans typically have in their contracts with their providers that they have to inform the health plan of any changes. But I would there’s probably not a whole lot of action taken if the provider does not do that. With the DMHC audit I know that again there are corrections that are being made and I think some of that would have to do with the plans implementing surveys to take a portion of their directories and see if the provider is actually active. But that’s just a portion. That’s not the whole directory. So there is that responsibility and I’m not certain how plans can hold those providers accountable to that. I do also believe again that the regulators do have the ultimate authority, but the plans have that responsibility in making sure they can do whatever they can to make their directories as accurate as possible.

Q: But still interact though. As a patient I drew on the insurance company before and go to my provider. Could we short-circuit that and have the provider take responsibility since it’s a prior decision of whether or not to be a part of the network to begin with?

Anne Price: Not today. I don’t think you can hold a provider accountable for giving information and then they cover the bill. Now if the health plan says a provider is in their network they would generally do something about that. I just read that in one of the articles that was in there.

Q: It’s not always the provider’s choice. Sometimes that insurance company drops the provider. And a provider doesn’t always know that they were dropped.

Anne Price: And I will tell you what Covered California is doing on that aspect before I finish up. We did recently within the last month have a big push of provider relationship campaigns where we’re working with the ACA, we’re working with the hospital association, we’re working with different entities to get the message out that their provider organizations and members of those organizations are not accepting Covered California with information that we have. Ultimately the providers should be confirming with their health plan, but we’re also taking that step to help get that message out there and use the data that we have to communicate that with providers as well. In closing I think that what I was getting to was that we have come a long way, but there’s still obviously a lot of improvement that we need to make. I know that Covered California and I personally believe that we do need to have better information so that our consumers can make informed choices when they’re choosing their plan. And to that degree will continue to work with different entities to try and improve the information that’s available.

Emily Bazar:  I’m going to give you the consumer perspective, because that’s what I cover and I write about. But I’m also then coming from the journalist perspective so that means I may be challenging some of the things that have been said here. As Marilyn said earlier, I write a column called “Ask Emily.” It is completely consumer-driven, completely consumer-oriented, a Q&A about Obama Care in which I answer consumers direct questions about the Affordable Care Act. In fact today we sent off an Ask Emily #47 to our newspaper and radio station partners across the State. Honestly, I never thought I would get to forty-seven. That’s in part because I didn’t stupidly anticipate how complicated this law was, and nor did I anticipate what a mess the rollout of the implementation would be. Even though California did a good job, God help the States if that was the case. Today consumers are so desperate for information and for guidance. It’s a very hard law. They have to jump through a lot of hoops. To date I have received more than twenty-one hundred e-mails, comments, questions to my Ask Emily e-mail address. I’d like you guys to take a wild guess as to what the number one complaint has been?

Networks. Narrow networks. In all fairness, and I’ll bring this up later, that has gone down. That was primarily last year. But narrow networks have been the number one complaint. And when consumers write into me about this they don’t use the term “narrow networks.” Instead they write about three broad areas that I’ll mention to you. The first is access. These complaints are basically people that are saying, “I can’t find a doctor that’s near to me that’s in my new Covered California plan, or private market plan?” Or more commonly and this is kind of a culture shift that’s happening, “My doctor whom I love dearly, does not accept the new Covered California plan,” so access if the first area. The second one is a big one and that’s accuracy. We’ve talked a lot about that today, but a lot of consumer complaints are about accuracy. People are calling doctors and although it’s less now, they were being told that they’re in-network. And then they show up at the office and then they’re told, “No, we’re not in-network.” So people are having a very hard time. There’s a lot of unreliable and inaccurate information out there. This is huge, because people’s livelihoods in many ways can be at stake.

I’ll talk a little bit about that later, but accuracy is at the root of some of these lawsuits that Betsy mentioned against Anthem and others. And also was the root of the audits or investigations or whatever you want to call what the Department of Managed Health Care looked into. They found ultimately that those two big insurers, the two biggest in Covered California, that each of them had misrepresentation of twenty-five percent of the providers in their lists. The third category of complaints is cost. That goes to what you said. Larry mentioned it early, but a lot of what’s happening is when consumers go to a doctor or a hospital who they were told were in-network, some of them are receiving unexpected bills for up to thousands of dollars for inadvertently going out-of-network. I had hoped that you guys would have one of my columns in the packet, but I don’t think that you do. It’s listed though. We heard a lot about how there were out-of-pocket maximums in Covered California and private market plans of six thousand, three hundred fifty dollars last year for an individual and twelve thousand, seven hundred dollars for a family. You didn’t hear a lot about the fact that that’s only for in-network use. And when you have inaccuracy out there and bad information out there and people inadvertently going out of network, they’re coming to realize the hard way that in some cases, especially with EPO’s and PPO’s there are no in some cases, out-of-pocket maximums for out-of-network use. Or, they’re ten thousand, twenty thousand, thirty thousand dollars. And a lot of people didn’t know that going into their plans because it was very hard to see.

As Larry mentioned, what happens when you go to a hospital and you’re going under? You’ve checked with the doctor’s that are in your network. You know that the hospital is going to be in your network, how do know that that little chunk they took out of your ear isn’t going to be looked at by a pathologist who’s in your network? How do you know? I’ve been getting a lot of complaints about this from consumers, who have received not hundreds of thousands of dollars in bills, but twelve, thirteen hundred, ten thousand dollars and that kind of thing. Just a reminder we’re not just talking about Covered California. These are also the exact same plans that are sold in Covered California with the exact same benefits and are sold on the private market at the exact same unsubsidized price, which also means they have the exact same networks. So that’s something to consider as journalists. Again in all fairness I want to mention that things are improving. The number of complaints that I receive from consumers about narrower networks has dropped, but they’re still coming in. I want to read you from an e-mail that I got very recently from a woman. There are some interesting twists. You wouldn’t have expected it. Larry, you alluded to this earlier. This woman needed a mammogram. She has a Covered California plan and it seemed like she had done a very good job trying to do her homework. She checked to find out if the hospital that she was going to get the mammogram at was in her network, and it was.

I’ll quote from her, “Lo and behold I get a bill from the physician group responsible for reading the mammogram. It turns out that even though I did due diligence in finding a mammogram provider within my service area, the provider they used to read the mammogram was not in my service area. How would I know this? What good is an x-ray if there’s no one to read it? I diligently checked to make sure the facility doing the mammogram was on the list given me by my insurance company. But the facility blighty neglected to mention that they use out-of-service providers. I would never have guessed.” So things are getting better, but consumers are still going to be coming up against a lot of problems with narrower networks.

Q: But this individual had very specific tests. Was that supposed to be with no cost sharing?

Emily Bazar:  I went back to her and I said, “You’ve got to fight this.” So she’s fighting it and it looks like she’s going to be fine. But you know fighting it is not fun and it’s not easy and it takes a lot of time. That’s another pet peeve of mine. Now that I’m kind of in this world as a consumer advocate as well as being a journalist, it’s easy to tell people, “Just call the EMHC Health Center. Go to a hearing with Covered California.” It’s not easy and it’s not fun. After covering this issue, here are some questions that I have asked and I suggest you ask. You mentioned some of these things, “Who’s responsible? Who is responsible for these issues? Who has oversight?” It’s not always obvious and it may not always be the answer. Maybe you ought to push back against what you’re hearing as the answer. In California as we’ve discussed, we’ve got the two regulatory bodies, which is so messy. But with due respect, what about Covered California? I have been frustrated as a journalist when I call Covered California about narrower networks and I’m told, “We’re sorry. We’re not the regulators.” But Covered California is an active purchaser and Covered California has chosen to take on this role as an active purchaser which gives them more power and authority in negotiations with the plans and determining what benefits they offer. So I’d say to push back on that a little bit. Also, doesn’t Covered California have some kind of a responsibility to provide accurate information about providers? Why can’t Covered California tell plans, “No, you can’t have unlimited out-of-pocket maximums for out-of-network use.” Why can’t they set some kind of maximum? I know that goes into broader questions about costs.

Doctors are another great question. Beth Capell of Health Access brought up a very good point when I was chatting with her recently about how doctors are a problem in terms of narrower networks.

A lot of doctors don’t want to participate in these narrower networks. They don’t feel they get paid enough to participate in some of the Covered California plans.

I don’t know how much to get into this, but a part of this is also a culture shift for consumers and it’s about messaging. Pay attention to the messaging that people are getting about the Affordable Care Act and about networks. This goes back to big picture messaging from President Obama telling people that they could keep their plans and their doctors, and Peter Lee telling people that dealing with Covered California would be as easy as shopping on Amazon. It didn’t quite turn out to be the case and people I think were taken aback. But it’s also about the details as I mentioned before. Messaging is in the details. You never heard anybody talk about the out-of-pocket maximums or out-of-network use, but you heard a lot about in-network use. So I think a lot of consumers were blindsighted by that.

Finally, I wanted to mention that there’s no insurer on this panel, but there is a representative here from the insurance company, Nicole Kasabian Evans. She’s with California Association of Health. I got a call from Daryl from Anthem/Blue Cross who you guys probably deal with. He wanted to make sure and I think it’s fair that their perspective is a bit represented here. So I had a conversation with him yesterday. Some of this was already brought up. He said that Anthem has spent millions of dollars working to fix some of the problems with narrower networks. He said that Anthem has reached out to every single doctor and its Covered California networks to try to ensure that there are fewer discrepancies in the provider directories. He said that it’s added six thousand doctors in the last year, including a lot of big hospitals like we’ve talked about Cedar Sinai and all the UC hospitals. So I’m coming from this perspective as a journalist, but now in this new world as kind of a consumer advocate writing this column. I’m frustrated on behalf of consumers who by and large are trying to do the right thing and are trying to jump through all these hoops. But the best advice I can give them, and it’s the best advice that a lot of experts give them, is to do your homework. That’s what I always hear, “Do your homework. Find out ahead of time.” But it’s not fair advice when doing your homework is so difficult and in fact impossible in some cases.

Marilyn Serafini: Let’s open up to Q&A. Please identify yourself.

Victoria Colliver: I have two questions. One is are there no consumer laws or something to protect folks that get consumers against being responsible for charges which they had no idea were going to happen? Can that just happen?

Betsy Imholz: That’s what the lawsuits are about. The burden seems to be really on the consumers actually. It was deceptive that “x” was represented wasn’t the truth. But it has to be proven in court and the Department of Managed Health Care for example and the Department of Insurance have their own rules, but only the regulators can enforce those. So it’s not absolutely clear-cut and easy for consumers to assert their rights.

Larry Levitt: There’s no explicit rule that says if I go to an in-network hospital that all the services I get will be in-network.

Q: I would think that would somehow be addressed somewhere that everyone is using out-of-network and in-network, and then who gets stuck with things is the consumer. That’s been going on for a while now. Why is it?

Larry Levitt: Back to this issue of who’s responsible. It’s very hard to figure out who would be responsible for that. If an insurer contracts with a hospital to be in their network, they also contract with labs. They also contract with specialist and with surgeons. The insurer has no direct control over whether the hospital is actually working with all those ancillary providers. You can hold a hospital responsible, but the hospital’s not necessarily responsible for which plans those ancillary providers are contracting with either. It’s tricky.

Q: Larry when you mentioned the question about that that these emergency regulations, isn’t that what you said that they will require people to be informed. Do the hospitals even know who’s going to be on call that day so that they can tell you?

Larry Levitt: I wondered the same thing.

Nicole Kasabian Evans: I’m Nicole Kasabian Evans with the California Association of Health. There was a really good piece in the Times about this towards the end for the last few months and for the last year. This is a really complicated issue like Larry said, because the people who work in hospitals are not on staff for the hospital. They called it “Drive by Doctoring” in the article because a physician, a surgeon in the OR might have a colleague walk into the OR and consult at the last minute, and it’s not necessarily run through any kind of an insurance process to see if indeed that physician is in-network. So these things happen all the time, especially in a hospital setting.

Larry Levitt:  It’s also that we now have a lot more people buying coverage on their own through Covered California. If you get coverage from an employer you at least have an HR Department who is your Emily. If you’re buying it on your own you’re on your own.

Q: I don’t know who to direct my question to, but it pertains to how you define this narrower network when you’re writing Q&A’s on consumer information. So speaking of the contrast between Kaiser and the old way that managed care used to work and now, one of the areas that I see the most confusion in and questions with is in this packaging idea. The example that has come up a few times is with anesthesiologist. So it used to be in old days you’d be in-network, out-of-network. As I recall you would pick a medical group and your hospital and you could pretty much assume that if you used a lab or an anesthesiologist it was all sort of packaged together.

Anne Price: How old days are you talking about? I delivered my daughter fifteen years ago.

Q: I’m not really sure. I always write a lot for Kaiser and about Kaiser. And it is true that with Kaiser all the pieces of the puzzle come together. When someone is trying to pick a package of procedures, like they’re getting something done that is going to involve an oncologist, a lab, and a chemo infusion center, I actually had a hard time instructing people how they’re supposed to go about finding out whether all of these pieces are in-network and how they’re not going to get slammed. So yeah, you do end up giving the advice, “The contrast is something where all of the pieces were all put together.” I’m wondering why this is so hard. Why someone is constantly being hit by this jigsaw puzzle? Why are the networks all being defined in all these separate pieces like this?

Larry Levitt: Because they could.

Q: I get that but let’s say you’re Aetna and you’re doing your messaging or you’re Blue Shield or Blue Cross, how did we get away from, “I’m using ‘x’ medical group and ‘x’ facility, and therefore, I can count on all of those pieces being in place for me?”

Unidentified Panelist: My personal opinion is that I think when you th