Author: Kimberly Cormier, Director of Product Marketing, NaviNet, Inc.
The use of narrow provider networks in health insurance plans has proliferated as a cost containment measure by payers, driven by the passage of the Affordable Care Act (ACA) and rapid adoption by cost-conscious consumers. The challenge with the explosion of these narrow network offerings is that it has not kept pace with the ability for providers and consumers to access rich information around these health plans. This has led to increased legislative scrutiny and regulatory hurdles. The ability for providers and consumers to access up-to-date, plan-specific information would greatly improve accessibility, transparency, and ultimately, customer satisfaction.
As deductibles and consumer health care costs continue to rise, payers are focused on reducing costs, while remaining price-competitive. Narrow networks let payers attract price-sensitive consumers who are willing to trade network breadth for lower premiums and out of pocket expenses. The passage of the ACA made traditional cost-saving levers unavailable to payers, but it did establish access to new marketplaces. Over one-thousand new networks were introduced in 2015 alone. Narrow network plans boomed on these new marketplaces and became more common on Medicare Advantage and commercial plans as well. According to McKinsey & Company, approximately 70 percent of the plans sold on exchanges in 2014 featured narrow networks. In 2014, median premiums were 11-17 percent less expensive than plans with broader networks. Price-sensitive consumers and large employers were also quick to adopt narrow network plans.
Despite these lower premiums, consumers and providers express dissatisfaction in their inability to assess the full implications of such health plans upfront and on an on-going basis, citing a lack of information and access as major obstacles. In a consumer survey conducted by McKinsey & Company, the most common reasons cited for dissatisfaction included not receiving coverage and benefits expected and not receiving answers to queries or issues regarding health care coverage (e.g., in vs. out-of-network details). Additionally, 44 percent of consumers who purchased an ACA plan this year for the first time did not know the network configuration of their plan. Critics say payers have made several slip-ups, such as not structuring adequate networks or not maintaining up-to-date provider networks. In some instances, patients learned that a hospital or doctor was out-of-network only after receiving a hefty bill. For example, hospitals often contract out services for certain specialists, so while a hospital may be in-network, some doctors may not be, leading to out-of-network rates. In rural areas, some plan members have had to travel long distances to access in-network providers. Unclear and inconsistent federal and state regulations around narrow networks have exacerbated such issues.
As a consequence, narrow networks are experiencing greater scrutiny from legislators and regulators. For example, in California recent lawsuits filed against insurers disputing network adequacy led to more stringent coverage requirements. As a result, the California Department of Managed Health Care now requires insurers to submit annual reports about their provider networks, information that is made available via the Department’s website. In February, the Centers for Medicare and Medicaid Services (CMS) tightened rules around Medicare Advantage plans, stating that these plans could be fined or sanctioned if complete and accurate directories are not maintained or if there is not an adequate network of providers available to accept new patients.
These legislative and regulatory actions demonstrate the tremendous need that exists for physicians and patients to have access to comprehensive, real-time information that empowers them to deeply understand their provider networks and benefits information. Members need tools to make informed decisions when selecting a provider and physicians need robust solutions when making a referral to minimize financial exposure and maximize outcomes. With NaviNet solutions like NaviNet Open Advanced Referrals, health plans can supply providers with tools that automate the referral process, thereby reducing customer service calls, operating costs, and network leakage. Crucially, health plans can enable providers to make better specialist decisions during the referral process by displaying additional value-based reimbursement program details.
With NaviNet Open Advanced Referrals health plans can:
- Better manage narrow networks to simplify referral submission and inquiry for provider offices resulting in less phone calls;
- Direct patients towards higher quality providers based on pre-defined benefit tiers, as well as other provider cost and quality considerations; and
- Supply more accurate and complete referral information in real-time to providers, supporting value-based program initiatives that control cost and improve quality of care.
To learn more about NaviNet Open Advanced Referrals, contact us today for a free healthcare collaboration portal assessment.