Insurer’s network subject of inquiry

Arkansas Insurance Commissioner Jay Bradford said he is investigating whether a Little Rock company’s limited network of hospitals, doctors and other providers for some of the plans it is offering on the state’s health-insurance exchange are allowed under a state law.

Mike Stock, chief executive of QualChoice Health Insurance, said his company’s agreements with groups of providers in central and Northwest Arkansas allow it to offer plans with lower monthly premiums than those the company charges for identical plans with broader networks.

For instance, in central Arkansas, a 35-year-old who does not qualify for an income-based subsidy would pay a monthly premium of $308 for coverage under the company’s Silver Basic Plus plan in the smaller network. That person’s identical plan in the broader statewide network would carry a monthly premium of $342.

The providers in each of the smaller networks - including St. Vincent Health System in the central Arkansas network and Washington Regional Medical Center in the state’s northwestern corner - have agreed to coordinate patient care, reducing waste and holding down costs, Stock said.

But after learning about the networks from an Arkansas Democrat-Gazette reporter late last month, David Wroten, executive vice president of the Arkansas Medical Society, which represents physicians, submitted a formal inquiry to Bradford on whether the networks comply with the state’s “any willing provider” law.

The law - which was first passed in 1995 with the support of the Medical Society but was blocked by court rulings until 10 years later - requires insurance companies to include in their networks any hospital, doctor or other health-care provider who meets the conditions set by the insurance company.

Stock said his company is in compliance with the law because it will contract with any “integrated network” of providers, as long as the network agrees to the company’s conditions.

An individual doctor or hospital, however, would have to be part of such a network to be eligible, he said.

“One of the terms and conditions would be having a clinically integrated network that they could bring under a single contractual relationship,” Stock said.

He added that “there are other groups in the state that we have having discussions with today” about being included in the smaller network plans.

Bradford said last week that he is reviewing the matter in response to the Medical Society’s inquiry.

“Frankly, I’ve got to be sure that it’s the best benefit for the consumer, and I haven’t made a decision on it because I don’t have all the facts,” Bradford said.

Wroten said it isn’t clear whether QualChoice’s plans comply with the law.

“That’s why we’ve inquired with the Insurance Department,” Wroten said. “We’ll let them sort it out.”

HOLDING DOWN PREMIUMS

The exchange, created under the federal health-care overhaul law, is meant to allow people to compare plans through an online portal, healthcare.gov, where they also can apply for federal tax-credit subsides to help pay their premiums.

Most people who qualify for Medicaid under the expansion of the program approved by the Legislature this year also can sign up for a plan on the exchange and have the premium paid by Medicaid. Those with exceptional health needs will be covered under the traditional Medicaid program.

Enrollment began Oct. 1 for coverage that will start next month.

Of the four companies offering plans on Arkansas’ exchange, QualChoice is the only one offering limited-network versions of its plans.

In Little Rock, for instance, the plans offered by Arkansas Blue Cross and Blue Shield, the national Blue Cross and Blue Shield Association, and Centene Corp.’s Arkansas Health and Wellness Solutions each include UAMS Medical Center, Arkansas Children’s Hospital, St. Vincent Infirmary Medical Center and Baptist Health Medical Center in their networks.

The broader network versions of QualChoice’s plans also include those hospitals, while the smaller-network versions offer St. Vincent Infirmary Medical Center as the only Little Rock hospital.

Premiums for the plans with smaller networks are 10 percent lower than those of QualChoice’s wider-network plans.

Patients can go to doctors or hospitals outside the networks but would have to pay higher fees. Exceptions are made in certain circumstances, such as during a medical emergency or when a patient needs a service that is not offered by a network provider.

More than half of the roughly 200 people who had signed up for QualChoice plans as of late last month chose the smaller-network plans, Stock said.

“We understand they won’t be the solution for everybody, but there will be segments of the marketplace that will be very happy” with the plans, Stock said.

QualChoice spokesman Christy Garrett added that the plans might be especially attractive for people whose doctors and other heath-care providers are included in the smaller network, or who don’t currently have a provider.

The smaller-network plans are an option for customers only in the central and northwest coverage regions of the state designated by the Insurance Department.

In the northeast, south-central and west-central regions, where QualChoice also is offering plans, the company is offering just the broader-network plans. The company is not offering plans in the southeast and southwest regions.

Arkansas Blue Cross and Blue Shield used a different tactic to hold down the premiums for its plans - offering specialists a lower rate compared with what the company pays under plans offered outside the exchange.

However, all the plans offered on or off the exchange use the company’s True Blue PPO network, which includes most of the doctors and hospitals in the state, Arkansas Blue Cross spokesman Max Greenwood said. The national Blue Cross plans use the same network.

MANAGING PATIENT CARE

The provider for QualChoice’s smaller-network plans in central Arkansas is the Arkansas Health Network, which is owned by St. Vincent Health System.

In addition to the system’s hospitals in Sherwood, Little Rock and Morrilton, the group formed in March includes about 380 physicians, including about 120 who are employed by the health system and 260 who are independent, said Jon Timmis, who is the network’s president as well as the health system’s chief strategy officer.

In Northwest Arkansas, the provider is Health Partners, which was incorporated in 1994 and is made up of Washington Regional Medical Center and a group of physicians.

Timmis said the Arkansas Health Network has an “aggressive care management program” that focuses on preventive care and avoiding unnecessary hospitalizations.

He said the group has applied to participate in a Medicare program that rewards provider organizations for coordinating care and lowering costs. It also is pursuing agreements with private insurance companies that would include similar incentives, he said.

“We want to be able to share in the savings that we’re able to generate by more tightly managing the care of a population,” he said.

As part of its agreement for QualChoice’s smaller-network plans, the group agreed to a “slightly decreased” reimbursement rate compared with what it receives under the wider-network QualChoice plans, he said.

The rate Health Partners providers are paid under the smaller network plans is the same as under the wider network plans, Director Lenny Whiteman said in an email.

But he said the agreement includes incentives for achieving good outcomes and reducing costs, as well as “risks tied to withholds if targets are not met.”

Patricia Driscoll, a spokesman for Northwest Health System, which includes hospitals in Springdale and Bentonville and a women’s hospital in Johnson, said her company did not know about QualChoice’s smaller network plans.

“We’re going to have to investigate it,” she said, adding that her company wants to ensure “all the patients in Northwest Arkansas have access to the Northwest Health System.”

Bob Roberts, senior vice president of finance for Baptist Health System, said he also wasn’t familiar with QualChoice’s smaller network plans. The system includes hospitals in Little Rock, North Little Rock, Arkadelphia, Heber Springs and Stuttgart.

UAMS Medical Center officials have spoken briefly with QualChoice representatives about participating in a limited network, said R.T. Fendley, the hospital’s senior associate director.

He said UAMS, which owns a partial stake in QualChoice, isn’t interested. It doesn’t want to encourage the spread of such networks, he said.

“If multiple plans on the Arkansas Insurance Exchange launch limited networks, UAMS is concerned that Arkansans could eventually get caught in a situation where care at the academic medical center would become unavailable to them,” Fendley said in an email. “We believe there are better ways to manage health care costs than limiting access to care.”

ARKANSAS’ LAW

Limited networks were more common in Arkansas before the 8th U.S. Circuit Court of Appeals reversed one of its own rulings and ended a 10-year hold on the state’s “any willing provider” law in 2005.

The appellate court cited a unanimous ruling by the U.S. Supreme Court in 2003 that found a similar law in Kentucky did not violate the Employee Retirement Income Security Act, which restricts states in issuing rules on employee benefits.

Arkansas’ law applies to plans offered by insurance companies but not those funded by large employers.

QualChoice’s limited network plans are being introduced as the state’s Medicaid program is working with the company, as well as Arkansas Blue Cross, on an initiative that rewards providers for keeping costs low and penalizes those whose costs are excessive. Another program that includes Medicaid, Medicare and the two insurance companies, as well as Humana Inc., provides extra payments to doctors who take steps to better coordinate patient care.

Craig Wilson, director of access to quality care at the Arkansas Center for Health Improvement, said limited networks could become more common as insurance companies continue to attempt to lower costs by requiring providers to coordinate care and meet other quality-related measures.

Arkansas Surgeon General Joe Thompson, the center’s director, said Arkansas’ law “shouldn’t be a barrier” to those efforts.

“It ought to be something that makes the system move forward in a positive manner,” Thompson said.

He added that the insurance exchange is meant to give consumers more information about the insurance plans, including the plans’ networks. Healthcare.gov, for instance, provides links to the insurance companies’ online directories of network providers.

“Knowing whether your provider is in the network or not is probably the first step to making an informed decision,” Thompson said.