The Affordable Care Act required the creation of new health insurance marketplaces, often referred to as health plan “exchanges,” in all states by October 1, 2013. In so doing, the Affordable Care Act aimed to harness the power of competition among providers in order to lower insurance costs. One of the goals of these “exchanges” was to simplify a consumer’s search for coverage by creating a “one-stop shop” where the entire spectrum of available healthcare options can be presented. The idea was that consumers would then be able to make an informed decision as to which health plan provides the combination of price and coverage that best suits their particular needs.
Since Oct. 1, media attention has focused primarily on the technology problems afflicting www.Healthcare.gov, the primary portal for consumers to access the federal marketplace. But all that coverage may be overshadowing other systemic realities inherent to the implementation of these health plan “exchanges.” Specifically, there is a growing concern that health plans on these “exchanges” may evolve to exclude health care providers that would otherwise be available to consumers. “Narrowing” of health care provider networks with respect to plans offered on health plan “exchanges” may result in exclusion of top rated hospitals and doctors with a demonstrated history of providing superior care to the communities they serve. These limited or “narrowed” networks may impact patients with complicated medical conditions, as such patients may be precluded, or disincentivized, from seeking treatment at specialized facilities that have been excluded from their particular health plan.
Additionally, the introduction of “narrowed” networks within these health plan “exchanges” may require patients (many without cars) to travel longer distances for care that would otherwise be available locally.
Of note, federal laws require health plans on an “exchange” to provide adequate networks for care. For example, the Affordable Care Act mandates that a network be, “sufficient in number and types of providers… to assure that all services will be accessible without unreasonable delay.” However, federal government guidance is sparse as to how adequate networks of care should be measured and/or identified. In a recent Washington Post article, one senior fellow at the Kaiser Family Foundation was quoted as stating, “[i]t’s been mostly up to the plans to attest to it, and for now everyone’s taking their word for it.” Sandhya Somashekhar and Ariana Eunjung Cha, “Insurers Restricting Choice of Doctors and Hospitals to Keep Costs Down.” Washington Post (November 20, 2013).
The tensions created by the unintended consequences outlined above have recently culminated in the first of what could become a series of lawsuits filed by hospitals that have been excluded from health plans offered on an “exchange.” For example, a few months ago the Seattle Children’s Hospital sued its state insurance commission, contending that an adequate range of services had not been created by the health plans sold on the relevant health plan “exchange.” In a recent Modern Healthcare article, Mark Wietecha, president and CEO of the Children’s Hospital Association, was quoted as warning that the Seattle Children’s case may be the “first out of the box” of many instances of hospitals fighting against their exclusion by arguing that the applicable health plan “exchange” had fallen short of the adequate network requirements imposed by state and federal law. Joe Carlson, “Exchange Exclusion Suit.” Modern Healthcare (October 12, 2013).
Hospitals, physicians, and other healthcare providers may also turn to their provider contracts to determine whether health insurers have the right to exclude them from participating on health plans offered on a health plan “exchange.” If such exclusion violates provider contracts, a wave of litigation may not be far off.
By Matthew T. Wright
Zumpano Patricios Winker
312 Minorca Ave
Coral Gables, FL 33134
South Florida Legal Guide 2014 Edition