Healthcare: Networks and Coverage

Healthcare-1014 The alphabet soup of healthcare today includes MEC (minimum essential coverage) and EHB (essential health benefits). What is required under one does not neatly mesh with what is required under the other, which contributes to the confusion as employers and employees attempt to meet the requirements of the Patient Protection and Affordable Care Act.

MEC refers to the individual’s responsibility to have healthcare coverage, EHBs are the elements all employer-sponsored health plans must include, and there is some disparity between the two as far as specific benefits. However, notes Quarles & Brady attorney Sarah L. Fowles, while employers are not required to buy health insurance that is MEC, as a practical matter most employer-sponsored health insurance policies will qualify as such. The issue of EHBs is a little more complicated. “A ‘group health plan’ may or may not cover all essential health benefits, depending on whether it is a self-insured plan … or a fully-insured health plan,” she says, explaining there is no requirement that a self-insured plan cover EHBs, and a fully insured plan is only required to cover EHBs if it is offered in the “small group market.” What matters from the employee’s standpoint is, an individual covered by an employer’s group health plan (which is MEC, regardless of whether it covers EHBs) should not be subject to a penalty under the individual shared responsibility mandate. Fowles points out, however, there are some special rules. “Some group health plans that only offer ‘excepted benefits’ — such as dental-only or vision-only expenses [which PPACA excepts from its list of EHBs] — typically would not be treated as MEC even if for some legal purposes they might be treated as group health plans.”

For employees who opt to purchase coverage through the individual marketplace, Fowles says those individual health insurance policies will be MEC and will cover EHBs. “This is due to the requirements placed on qualified health plans sold in the exchange and the definition of MEC, which includes qualified health plans,” she explains.

Essential Health Benefits

The minimum 10 essential categories are:

Ambulatory patient services
Emergency services
Hospitalization
Maternity and newborn care
Mental health and substance use disorder services, including behavioral health treatment
Prescription drugs
Rehabilitative and habilitative services and devices
Laboratory services
Preventive and wellness services and chronic disease management
Pediatric services, including oral and vision care

Different Plans for Different Needs

Choosing a policy means settling on a network of providers that will be available. Jeff Stelnik, senior vice president of strategy, sales and marketing with Blue Cross Blue Shield of Arizona, suggests employers consider the following questions when choosing what coverage to purchase: Does the carrier have a national presence (an aspect especially important for employers with multiple locations)? What is the reputation of the carrier, and how is it rated on such elements as customer service and satisfaction? Will the plans meet the needs of a diverse work force? What is the ease of implementing the plan? And John Shufeldt, M.D., who serves on the board of managers of Arizona Care Network, suggests checking out the plan’s website to see what providers are on the policy’s panel. “You can have the greatest plan in the world, but if no doctors take that plan, you’re out of luck,” Shufeldt says.

David Berg, M.D., chairman of Redirect Health, raises another point with his suggestion that employers “demand of brokers and hospitals to see the negotiated prices for the different hospitals.” He maintains that quality is a marketing and branding issue. “It’s my belief that, from one hospital system to another, there’s not much difference.” The bigger hospital systems that can market themselves better negotiate higher rates, which means the consumer then pays his percentage at a higher rate.

Interestingly, among the 10 essential health benefits that PPACA mandates for individuals and small employers is pediatric dental. Other dental, as mentioned above, is “excepted” and would be covered under a separate policy. Says Craig Livesay, Delta Dental’s vice president of underwriting and professional relations, “Narrow networks [for medical] are a trend, but dental is seen as a respite from the chaos and confusion of medical coverage.” When choosing a dental plan, it’s important to look at the coverage it offers across all the employees in the organization and for all members of the individual’s family through the different stages of life. “For children, the big focus is prevention; as the mouth matures, the focus is on minor and major restorative work.”

Different types of benefit plans include health savings accounts, traditional co-insurance, all-copayment and catastrophic. Pointing out additional considerations, Stelnik says a PPO may be a good choice for an individual who travels a lot and wants the freedom to go out of network, while an HMO would suit someone who does not travel a lot and is in good health. “There are a lot of cost and quality tools available online,” he says, adding, “Individuals need to have a better line of sight regarding cost of care.”

Networks: Size Matters

The concept of “narrow network” was developed to provide consumers a cost trade-off. While narrow networks come in a variety of iterations, all must meet rules regarding network adequacy: They need to have broad enough coverage across various aspects to be able to create a network, and that includes primary care, specialists and hospital. “A qualified health plan must maintain a network that is sufficient in number and types of providers … to ensure that services will be accessible without unreasonable delay,” Stelnik says, adding that for a “reasonable access” standard, “plans must contract with at least 30 percent of the ‘essential community providers’ in their service area.” Other important elements of coverage that Shufeldt points out are emergency, hospice and “all the ancillaries, such as durable medical equipment and prescription benefits.”

“Insurance companies are experimenting with what’s marketable to employers,” says Bob Campbell, senior vice president of business development and chief strategy officer of Phoenix Children’s Hospital, cautioning, “That’s where employers need to be careful they’re not buying something that will not meet the needs of their employees.” PCH, for instance, offers the broadest range of pediatric specialties and service-line programs in Arizona, which might be an important consideration to a work force with young families. But Campbell says he has found a lack of price transparency by insurers as he has studied available policies. “What is the cost of adding PCH? We have not been able to get insurance companies to give us numbers, which has led us to believe it seems to not cost much more, if anything, to include us.”

Network size becomes an issue. Stelnik suggests it would be helpful to compare network sizes when choosing a plan, observing, “Maybe [a network] has just one hospital system and therefore not all the specialties.” When BCBSAZ creates a product, Stelnik says, it looks at coverage gaps and tries to fill in. According to Stelnik, BCBSAZ’s Alliance product works with Banner or Scottsdale Health, “who both have a very wide range and can cover virtually all the specialties,” and its Select product combines Dignity Health, Phoenix Children’s Hospital, Abrazo and Iasis “because we’re looking for the right balance.” Similarly, Mark Hillard, who is CEO of Arizona Care Network and Dignity Health Medical Group, explains Arizona Care Network built a robust network with Dignity Health, Phoenix Children’s Hospital — “The only children’s hospital in the state and one of the largest in the country” — and Abrazo, whose hospitals “cover geography where Dignity does not.” Shufeldt, observing that “if you have great specialists, you don’t have to go out of network,” says the point is for ACN to have “enough geographic dispersion to take care of the majority of patients who present, including out in the boonies.”

Understanding the geographic availability of the network is important, but Stelnik says BCBSAZ has discovered the information may not be clear to purchasers using the federal exchange. Seeing that it was signing up individuals who resided in a county other than where a network’s providers were located, BCBSAZ made outreach calls to make sure they understood that fact — and indeed, Stelnik relates, some purchasers had not, and thanked BCBSAZ for straightening them out.

The Big Picture

Shared information and coordinated care was a significant aspect of accountable care organizations (ACOs), a healthcare network concept that was touted as a breakthrough idea only a few years ago. Since the passage of PPACA, networks are becoming more the standard than the exception.

Shufeldt believes collaboration and shared information will help reduce the cost of care, and illustrates this from his own experience. “I work in ER at St. Joseph’s and I had a patient who had had an MRI at another MRI center — who said they could fax the report to me but couldn’t send the MRI. No doctor will perform surgery on someone’s head based on a report, so I had to redo the MRI.” Another issue arises in needing to suggest a medication but not having access to complete health records and therefore not knowing about a previous bad reaction or interaction with other medications.

Noting, “Everybody’s working on transparency and outcomes,” Hillard says, “I believe communication among providers will aid in the process of delivering high quality and improving the value of the healthcare that’s being delivered.” This is where the technology of electronic health records is making a difference, granting access to critical information when a patient is receiving care. This may be an emergency room physician having access to images performed at a partner facility, a primary care physician having access to specialists’ reports, or a specialist having information on the reason for a patient’s visit. “The genesis of all ACOs forming is [an effort] to reduce cost, improve efficiency and make the patient experience better,” Hillard says.

In determining what treatments and procedures are covered, insurance companies follow “best practices,” which Shufeldt explains is evidence-based, scientifically proven and authenticated information that helps physicians direct clinical care. Noting, “Insurance plans have panels of physicians as advisors. They don’t just jump to the ‘next best thing’ — the cutting-edge has risk,” Shufeldt says, “Generally speaking, treatments and medications that are evidence-based are generally covered, to some extent if not completely.”

But healthcare coverage is changing, and Campbell emphasizes the need to educate employers on the importance of thinking about those changes. “You no longer have everything in these policies, so you really do need to look at them in more detail.” For instance, if a policy seems attractive from a price standpoint, consider “how does that match up with the needs of your employee population? What are the potential gaps, and what is the cost of filling the gaps by having a more comprehensive network?” He believes part of the employer’s role is truly understanding the healthcare needs of the employees, and “thinking through with an advisor regarding the kind of policy they want and need, and what kind of policy the employer is willing to purchase or provide.” And according to Stelnik, the results of focus-group research by BCBSAZ show that what’s important to people is a choice of options.

Series: A Look at Healthcare Benefits