Given the struggling economy and current healthcare market, many payers are trying to implement innovative ways to save costs. And some are recycling older ideas and adding slightly new twists to them, namely launching new health plans with greater restrictions and tougher referral requirements, The Wall Street Journal reported.
Although reminiscent of managed care plans in the 1990s, insurers like UnitedHealth, WellPoint and Cigna say narrow network plans are new in that they leverage technology to improve care and cap costs. Plus, they aren't the only option available to consumers because most insurers also offer broad preferred-provider plans.
Such plans are becoming more popular because they help insurers cut costs, for example, by excluding the most expensive doctors and hospitals. Narrow network plans have closed structures and tiered designs with greater out-of-pocket expenses for receiving care from doctors or hospitals in the highest tier.
WellPoint, for example, is launching narrow and tiered networks that use about 30 percent to 70 percent of its entire provider network. These new plans will be available in six of the 14 states which WellPoint operates in by the end of this year and in all 14 by January 2014, WellPoint Executive Vice President Ken Goulet said.
UnitedHealth said it would implement a new "prior authorization" process throughout the next 18 months, preventing it from covering certain services and tests, including joint replacements and spine surgeries if they're not first considered medically necessary.
Meanwhile, Cigna started requiring prior authorization for certain back surgeries last year and may implement the same requirement for some radiation oncology and cardiology procedures. "It's very low friction; it's clinical quality, and we lower costs," Cigna Chief Medical Officer Alan Muney told the WSJ.
And Aetna, which historically has used tiered networks for specialists, launched a new version for hospitals last year using 50 percent to 60 percent of its full provider network. By the end of next year, Aetna intends to narrow the available providers even further to only 30 percent to 40 percent of its specialists and hospitals for some of its plans. Just last month, Aetna said it's partnering with Virginia's Inova hospital system to create a narrow network that only allows patients to see Inova providers, FierceHealthPayer previously reported.
Additionally, Harvard Pilgrim created a new limited network of moderately priced providers that reduces insurance costs by 10 percent and excludes its region's most expensive, and sometimes most popular, providers like Massachusetts General Hospital, Brigham and Women's Hospital and Partners Healthcare-owned hospitals.
To learn more:
- read the Wall Street Journal article