A small uproar over provider networks in public insurance exchanges in Washington state has led to a proposed, controversial fix that, if adopted, has implications for other states, providers and insurers facing similar situations.
After the launch of Washington state's exchange, Washington Healthplanfinder, patients and providers discovered that the largest insurer, nonprofit Premera Blue Cross (and others), did not include many of the more prestigious Seattle hospitals in their networks.
Only three of the seven health insurers selling plans in the exchange included University of Washington Medicine's Harborview and UW Medical Center, the four Swedish health system hospitals in greater Seattle, and the Seattle Children's Hospital, and only one included Seattle Cancer Care Alliance, a consortium of the Fred Hutchinson Cancer Research Center, UW Medicine and Seattle Children's.
None of those providers are included as in-network under Premera's exchange plans or under its Lifewise subsidiary's exchange plans; the only Seattle hospital Premera and Lifewise included in-network for exchange plans is Virginia Mason Medical Center (which doesn't offer child delivery services).
After months of consumer confusion and provider complaints, including a lawsuit filed by Seattle Children's, Washington's insurance commissioner, Mike Kreidler, stepped in with a proposal for new network adequacy rules.
Kreidler, an optometrist who worked at Group Health Cooperative before being elected as insurance commissioner in 2000, said the main aim of the new rules is more transparency, "answering the common question: 'Is my doctor and hospital in the network of the health plan I might buy?'"
The proposed rules would require insurers to update their provider directories monthly, post them online and make them available in print upon request and, if they have more than one network, "must make it reasonably clear to an enrollee which network applies." The directories would also have to list specialty areas of providers included in-network, in-network institutional affiliation of the provider and whether the provider needs a referral, among other things.
More controversial, though, are Kreidler's proposed network adequacy requirements, which hospital and medical groups have criticized as too vague and insurers have criticized as too complex.
Under the proposed network adequacy requirements, plan networks would have to include enough general practitioners for 80 percent of enrollees in a service area to be within 30 miles of access to a practice in urban areas and 60 miles in rural areas from either enrollees' residence or work.
The proposed access rules for other providers relies not on mileage-based distance but on time. Health plan networks would have to include general hospitals with emergency services within 30 minutes of an enrollee's residence or workplace in urban areas and within 60 minutes in rural areas, with the same distance standards applied to mental health services and pediatric care. The proposed network rules for specialists stipulate that 80 percent of enrollees in the service area "have access to an adequate number of providers and facilities in each specialty."
The proposed rules would give insurers an exemption to the network requirements. Insurers would be able to file "alternate access delivery" requests with the commissioner if they demonstrate "good faith" efforts to contract with area providers, and if they still provide access to medically necessary care "on a reasonable basis" and have co-pays and deductibles apply at the same level of in-network services.
Both the "alternate access" provisions and the distance requirements seem inadequate to hospital advocates.
"We understand hospitals exist in competitive markets, and we do not expect that all hospitals will be included in all networks," C. Scott Bond, president and CEO of the Washington State Hospital Association, wrote in formal comments about the proposed rule. However, the draft rules amount to "less stringent access in rural areas, for hospital access, primary care and specialty pediatric care," Bond wrote. "We believe it is possible to have one standard," and one based on mileage, not travel time.
He also argued that the "alternate access delivery request" option comes with rules "too loose to be meaningful."
Insurance advocates, meanwhile, are concerned that the state is adopting a regulatory approach that relies on an "assumption that only large, broadly encompassing networks will provide adequate access," as Sydney Smith Zvara, executive director of the Association of Washington Health Plans, wrote to the commissioner.
"The proposed rule fails to allow for other ways of structuring provider networks, such as models used by primary care medical homes, integrated delivery systems, and accountable care organizations," argued Zvara, who suggested the alternate access provision include options for structuring networks based on medical homes, ACOs and IDNs.
With the federal government set to finalize network standards for essential community providers soon -- increasing the percentage required in an exchange plan's service area from 20 percent to 30 percent -- Zvara is urging that Washington state regulators hold off for now, to avoid potentially duplicate rule-making.
The rules were set to take effect May 1 and apply to the 2015 plan year, but are on hold. It's not yet clear how long Kreidler will delay the rules, if he goes forward with them, and there is a chance they could be amended.