UnitedHealthcare sparked an intense backlash from physicians, seniors and elected officials last fall when it notified more than 2,000 Connecticut doctors that they would be dropped from its Medicare Advantage network.
Some of the criticism has focused on things particular to the way the insurer made the changes.
But many people in health care believe that what UnitedHealthcare is trying to do -- cover fewer doctors and other health care providers -- is likely to become increasingly common in Connecticut. In other states, some insurers already offer plans that cover narrow networks of doctors and hospitals, in some cases, excluding major medical centers. They're betting that customers will opt for reduced provider choice if it means lower premiums.
And to some Connecticut doctors, the fight against UnitedHealthcare’s network changes is in part a fight against the larger trend.
“This is the first gun fired on Fort Sumter,” said Dr. Steven Wolfson, a Connecticut cardiologist, referring to the site where the initial shots of the Civil War were fired. “United is already doing it elsewhere in the country, and other companies are also doing it elsewhere in the country.”
“We’re fighting as hard as we can because we know that if they get away with it here, they’ll be doing it for all of their products and everyone else will chime in as well,” he added.
UnitedHealthcare spokeswoman Jessica Pappas said the company’s current Medicare Advantage network is so big that even with the cuts, it will be broad and comprehensive. Still, she noted, as health care undergoes major changes, moving toward more selective provider networks is one of the ways insurers can keep plans affordable in the face of rising costs and new quality standards.
An old strategy becoming popular again
It’s not a new practice for insurance companies to limit their networks, either by covering a relatively small number of health care providers and facilities, or by separating the providers they cover into “tiers” and varying out-of-pocket costs so members pay less if they see top-tier providers.
But experts expect the strategy to become more prominent as insurance companies compete for price-conscious customers and try to offset new costs resulting from the federal health law commonly known as Obamacare.
Limiting networks can help insurers hold down costs by getting doctors and hospitals to take lower payment rates or steering patients away from providers that tend to cost more. The insurance industry says they can help ensure that patients see high-quality and cost-effective providers.
And while some health care providers and consumer advocates are wary of the concept, concerned about patients losing access to care and worried about how insurers decide which doctors and facilities to include, others see it as an inevitable strategy for taming out-of-control health care costs.
“The expense of insurance is so great that if people can get a better financial deal through a narrower network, they’re going to jump on it,” said Kevin Counihan, CEO of Access Health CT, the state’s health insurance exchange.
But, he added, customers will expect the tradeoff to be worth it -- that is, with a price that’s at least 15 percent lower than other plans; and with a network that’s of high quality, with high patient satisfaction and providers that perform well on quality measures.
Offsetting Obamacare costs
The insurance industry uses the term “high-value” networks to refer to limited networks.
“High-value networks are an important tool for health plans in assuring that premiums are affordable while preserving access to comprehensive and important benefits,” the trade group America’s Health Insurance Plans wrote in an issue brief released last month.
It noted that some provisions of Obamacare will raise costs, like new benefit mandates and the requirement that everyone be allowed to buy insurance, regardless of medical history. And it noted that limited networks could be particularly helpful in offsetting financial pressures in the Medicare Advantage program, which is slated to face billions of dollars in funding reductions because of the health law.
Obamacare is also expected to increase the number of people who buy insurance on their own, a particularly cost-conscious group that’s more likely to accept reduced provider choice if it comes with lower prices, according to a recent report by analysts at the consulting firm McKinsey.
“To be competitive in this new price-sensitive marketplace, payors are looking to lower the cost of their individual plans through the use of limited (narrow or tiered) networks,” the McKinsey analysts wrote.
Many health provider systems believe they’ll have to offer insurers rate cuts to be included in the more limited networks, they wrote.
Pappas, the UnitedHealthcare spokeswoman, said the company's move to create high-performance networks for its Medicare Advantage plans should be understood in the context of the dramatic transformations taking place in health care, and as one way the company is responding to rising quality standards and increasing costs.
But she added that the company’s network, even after the cuts, will be bigger than the networks often cited in discussions of the narrowing trend: Those sold on health insurance exchanges.
Narrow exchange networks
In many states, plans sold on the public health insurance exchanges already have limited networks. An analysis by the Los Angeles Times last fall found that one insurer’s exchange health plans covered less than a third as many doctors in Los Angeles County as its employer plans. Another insurer planned to cover about half as many providers in its exchange network as its regular network, according to the L.A. Times.
Connecticut’s insurance market hasn’t seen a major move toward narrow networks, at least not yet. The state’s exchange requires that insurance plans it sells use provider networks that are substantially equal to the carrier’s other commercial networks, and each exchange plan covers all or nearly all the hospitals in the state.
Plans sold outside the exchange also generally offer broad networks. The Connecticut Insurance Department’s annual health insurer report card shows that each carrier’s HMO covers all state hospitals and similar numbers of pharmacies in each county.
“There is some variation with physicians, but nothing that created concerns,” department spokeswoman Donna Tommelleo said.
State law requires insurance companies that sell plans in Connecticut to maintain provider networks that meet adequacy standards set by one of two national organizations. The insurance department requires that carriers certify annually that their networks meet the standards, although Medicare Advantage plans aren’t subject to the requirement because they’re regulated by the federal government.
How are the networks built?
One key tension between health care providers and insurers about limited networks is about how the networks are determined.
The insurance industry says networks can be built using evidence-based performance measures to ensure that members see high-quality, cost-efficient health care providers.
Pappas, the UnitedHealthcare spokeswoman, said there’s no single formula the company uses when building its network. The factors include having the right mix of specialties and providers in a geographic area, how providers do on quality measures, how they perform on industry standards compared to their peers, and cost efficiency. Beyond that, she said, the company considers its specific process proprietary.
Critics question the methods insurance companies use in building narrow networks, worried it comes down largely to price. And even those who are agnostic about the concept say knowing the method is important.
“If there’s transparency around it and the providers have been given an opportunity to meet the standards and can adequately meet the standards, that’s one thing,” state Healthcare Advocate Victoria Veltri said. “But limited networks as a concept makes me a little nervous unless there’s actual proof that they don’t compromise quality of care and access to care while they’re lowing costs.”
Veltri thinks limited networks will be a hard sell in Connecticut, but she said that if insurers treat them as a tool to use after exhausting other ways to try to rein in costs, they could be worth considering -- if it’s clear how the networks are developed.
“Most advocates might just immediately go, ‘No way, especially for people with complex needs.’ And then some people may say, ‘Well, yeah, maybe that’s a way to save costs,’” she said. “It’s a concept that may eventually get here, but I think it just needs more vetting.”
Critics of UnitedHealthcare’s Medicare Advantage network changes have pointed to what they call a lack of transparency in how the insurer has handled the terminations, with little explanation for why certain doctors were excluded.
Speaking in Hartford before a field hearing on Medicare Advantage last week, U.S. Sen. Sheldon Whitehouse said there are good reasons for an insurer to make adjustments to its physician network, and bad reasons. “And when you have a company that is being as abrupt and as opaque as United, it is very hard to tell whether it’s a good reason or a bad reason,” said Whitehouse, a Rhode Island Democrat.
Whitehouse wasn’t shy about his guess. If the reasons were good, he said, like trying to include the providers who have the best electronic health records, best dealings with patients and the best outcomes, it would likely be a public and open process.
He suggested another possible motive for an insurance company to cut doctors: Trying to get rid of its most expensive patients by figuring out which doctors had sicker patients and cutting them, figuring the patients would choose another plan rather than switch doctors.
Pappas said the company rejects suggestions that it’s trying to get rid of costly patients. “They’re not really grounded in any type of fact,” she said.
But Whitehouse said that if the process for building a smaller network creates suspicions, it will be harder for insurers to take the steps needed to build high-value networks.
As for the UnitedHealthcare provider cuts, some -- but not all -- are being delayed because of legal action. Two Connecticut county medical associations sued UnitedHealthcare, and in December, a federal judge issued a preliminary injunction, requiring the insurer to hold off on plans to drop members of the Fairfield County Medical Association and the Hartford County Medical Association. UnitedHealthcare appealed and the two sides were ordered to participate in a program intended to produce a settlement.
Providers not in the associations are slated to be out of the insurer’s Medicare Advantage network Feb. 1.