The federal government's plan to rate Healthcare.gov plans based on network breadth is intended to arm consumers with more information as they shop for coverage, but some are questioning how effective this approach will actually be.
The Centers for Medicare & Medicaid Services (CMS) announced its plan in the final version of the 2017 Notice of Benefit and Payment Parameters, which govern health plans that are offered on the Affordable Care Act exchanges. The agency said it is conducting consumer testing to determine the best way to display the network-size ratings.
Yet the way CMS is proposing to rate plans--categorizing them as basic, standard or broad based on calculations of provider ratios--doesn't align with some of its other network-adequacy standards, argues Seth Chandler, a professor at the University of Houston Law Center, in a contributed post for Forbes.
For example, he notes that CMS judges the adequacy of qualified health plans' networks by measuring beneficiaries' "closeness" to in-network providers by the time and distance it takes to travel to them. Yet even though "time and mileage could be used for rating just as well as it could for adequacy," CMS does not plan to use these metrics when rating plans' breadth, Chandler writes.
In addition, the way CMS plans to rate network size is different from how it is instructing states to measure network adequacy, in accordance with the model state law drafted by the National Association of Insurance Commissioners. While the model law does say state regulators can consider provider ratios, Chandler notes, it doesn't say they should be the only way of rating network adequacy.
There are also doubts about how likely consumers are to use the network-size ratings when shopping for plans, according to Becker's Hospital CFO.
Many insurers lack the incentive to educate consumers about adequate network size in their plans, as their primary concern is to use narrow-network plans to control cost, Jay Kaplan, M.D., president of the American College of Emergency Physicians, tells the publication. Thus, he thinks consumers are unlikely to derive much value from the ratings.
"As one health insurance company vice president said on a panel at a recent American Medical Association conference, 'the first and only thing which people look at is the affordability of the premium,'" Kaplan tells Becker's.
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