As the Oct. 1 open enrollment period for the state’s health insurance exchange inches closer, hospitals, doctors and insurers across Connecticut are scrambling to work out provider network contracts that many industry insiders say will ultimately decide the success or failure of the new online marketplace, which will allow individuals and businesses to shop for health insurance coverage.
While state regulators have approved and made public the rates individuals and small businesses will pay for health plans sold through Connecticut’s health insurance exchange — called Access Health CT — few, if any, details have emerged about what the plans’ network of doctors and hospitals will look like.
And that’s raising concerns within the health care community.
Provider networks are crucial because they give patients access to certain doctors, specialists and hospitals. If a health plan doesn’t include in its network a patient’s preferred provider — or a provider located near them — that individual will be less likely to buy the insurance product, experts say.
Contract negotiations between providers and insurers have been contentious, industry officials say, especially since the exchange marketplace is price sensitive.
Anthem Blue Cross and Blue Shield, HealthyCT, Connecticare Benefits, and UnitedHealthcare are offering products on the exchange.
Anthem has warned some physicians they plan to cut provider reimbursement rates for health plans sold through the exchange, increasing the chances some doctors won’t join that network.
Meanwhile, at least one Connecticut hospital has said it doesn’t plan to join any insurance exchange networks, while several hospitals are signing contracts with one or two insurers, but not all of them.
“No carriers have been willing to disclose what provider networks will look like, but it will be a huge factor in whether or not people buy exchange products,” said John Calkins, president of Watertown brokerage firm Bozzuto Associates.
The insurance exchange is a key part of the Affordable Care Act and will allow small businesses and individuals to purchase coverage through an online marketplace. It will also offer subsidies and tax credits to qualifying individuals and businesses to make insurance more affordable.
Insurers in some states have been purposely building narrower provider networks for exchange plans, so they can lower premium costs to customers. The strategy aims to make insurance coverage more affordable to lower income people — a key goal of the federal health care reform law — who will be the exchange’s largest customer base. It also, however, limits access to hospitals and doctors, which is a concern among health care advocates.
Connecticut has tried to guard against access problems by adopting minimum network adequacy standards for health plans offered on the exchange, said Jason Madrak, Access Health CT’s chief marketing officer.
The standards require insurers to have “substantially” similar networks to what they already offer in the state. The guidelines also require insurers’ networks to include a certain percentage of essential community providers, including acute care hospitals and community health centers.
“The goal is to make sure there is reasonable access to care,” Madrak said.
There are no guarantees, however, insurers will be able to meet those requirements. Access Health CT isn’t involved in contract negotiations between payers and providers. And those negotiations, industry insiders say, have been difficult and confusing at times.
Providers and insurers in Connecticut have repeatedly clashed in recent years, as both sides face pressure to reduce health care costs.
Insurers argue their hard bargaining on reimbursement rates aims to make health plans more affordable to individuals and businesses. Commercial insurers traditionally reimburse providers 20 to 25 percent more than Medicare, the government funded insurance program for seniors.
Providers say insurers are offering reimbursement rates for exchange plans below traditional commercial rates.
Anthem, for example, earlier this summer sent a letter to some physicians warning them that their exchange plans could offer reimbursement rates closer to Medicare.
In response, some Connecticut doctors and hospitals have warned insurers they don’t plan to be part of exchange plan networks, sources say.
St. Francis Hospital has signed exchange network deals with Connecticare and HealthyCT, but is choosing not to participate in Anthem’s network, said Jess Kupec, president and CEO of St. Francis HealthCare Partners Inc.
Meanwhile, the 1,000 physicians affiliated with St. Francis HealthCare Partners are being given the opportunity to opt in, or out of the Connecticare and HealthyCT networks, Kupec said, adding that he expects a number of physicians not to participate.
Kupec said the hospital system has taken a conservative approach with the exchange, only agreeing to network deals offering rates that cover the costs its services.
“We were not able to get all insurers on similar fee schedules,” he said.
An Anthem official declined to comment on the letter it sent physicians, but said in a statement the company is “working to meet the needs of consumers looking for affordable coverage on the exchange.”
“In an effort to slow the rise in health care costs, we have created networks that are dedicated to Anthem’s covered products on the exchange,” the statement said. “We have been successful in securing provider participation in our small group and individual exchange networks. Anthem will meet the network adequacy requirements set by applicable law and the exchange.”
Matthew Katz, CEO of the Connecticut State Medical Society, said there is a lot of confusion about exchange plans within the provider community, particularly as insurers propose different reimbursement rates for health plans sold inside and outside the exchange.
Some doctors may also awkwardly find themselves in an insurer’s network for one group of health plans but not the other. That could create confusion for both providers and patients, Katz said. If docs choose not to participate in exchange plan networks they also risk losing some of their patient base, which may decide to purchase insurance through Access Health CT.
“When you are dealing with such a big change there is going to be confusion and chaos before there is clarity,” Katz said.
Meanwhile, Hartford Healthcare is “well down the road” in negotiating provider contracts with three insurance companies, said James Cardon, Hartford Healthcare’s executive vice president and chief clinical integration officer.
Cardon said he hopes Hartford Healthcare can take more of a partnership approach with insurers so they can work together to control costs.
“We are trying to figure out what that relationship looks like,” Cardon said.
On the payer side, HealthyCT is in the unique position of being a new player in the market.
The Wallingford nonprofit is a consumer-oriented health plan that received $76 million in start-up funds from the federal government. The organization, which received its license in April, plans to begin offering health insurance products both inside and outside the exchange this fall focusing on the individual, small- and mid-sized group markets.
As of late August, HealthyCT had provider contracts in place with about 5,000 physicians, said Ken Lalime, the nonprofit’s CEO. By the end of September he said he expects to have contracts in place with 75 percent of Connecticut hospitals as well.
“The process is ongoing and it doesn’t stop,” Lalime said. “Being a new player in the market, the conversations are different. We are trying to build unique relationships and partnerships that focus on coordinated care.”
To limit confusion in the market, Lalime said HealthyCT will offer similar reimbursement rates to providers for products sold on and off the exchange.
HealthyCT is also negotiating with behavioral health specialists, physical therapists and federally qualified health centers to ensure they have as robust a network as possible.
By Jan. 1, HealthyCT expects to capture up to 15 percent of the insurance exchange market. That equates to about 10,000 to 15,000 members, Lalime said.
“We need to make sure there is a broad enough network so there is choice,” he said.
