Network Adequacy in the Health Insurance Marketplace

31 Pages·2016·0.37 MB·English

Network Adequacy in the Health Insurance Marketplace:
Analysis of Two Tribal Sites

Hayward, WI
(Lac Courte Oreilles Chippewa Band of Lake Superior Indians of Wisconsin)
&
North Fork, CA
(North Fork Rancheria of Mono Indians of California)

December 6, 2016

Tribal Self-Governance Advisory Committee
Report Prepared by:
Doneg McDonough, Principal, Health System Analytics
Technical Advisor, Tribal Self-Governance Advisory Committee
[email protected]

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Executive Summary
Background: The Health Insurance Marketplace (Marketplace), established by the Patient
Protection and Affordable Care Act (ACA), allows consumers to enroll in comprehensive health
insurance coverage. Issuers that offer health plans through the Marketplace must operate
provider networks that include adequate numbers and types of providers to ensure timely
access to services for enrollees and include a sufficient number and geographic distribution of
essential community providers (ECPs), which include Indian health care providers (IHCPs),
where available. However, as the Marketplace enters its fourth year of operation, some
concerns have arisen over whether the health plans offered through the Marketplace include
an adequate number and range of providers in their networks and whether a proliferation of
“closed network” plans could limit access to care.
These issues could have a significant impact on Indians, as individuals who meet the definition
of Indian under ACA qualify for comprehensive cost-sharing protections and generally should
enroll in “open network” plans to take full advantage of these protections.1 These cost-sharing
protections apply only to covered services, and “closed network” plans do not cover services
furnished by out-of-network providers (with the exception of emergency care). As such, when
enrolled in a “closed network” plan, these cost-sharing protections would not apply if Indians
receive services from out-of-network providers, including potentially not applying to Indian
health care providers (IHCPs), as at least some “closed network” plans are not required to offer
contracts to IHCPs. It is important, therefore, that Indians have access to “open network” plans
when obtaining health insurance coverage through the Marketplace.
For non-Indians, including American Indians and Alaska Natives (AI/ANs) who do not meet the
ACA definition of Indian, network adequacy also is a critical concern. Low- and moderate-
income non-Indians who enroll in silver-level Marketplace plans qualify for general cost-sharing
protections, but these protections generally apply only to services furnished by in-network
providers, with services furnished by out-of-network providers typically subject to separate and
higher deductibles and out-of-pocket costs. Thus, although “open network” Marketplace plans
allow enrollees to receive services from any provider and have the plan pay for at least part of
the services, it is important for non-Indians to enroll in plans that have a broad range of “in-
network” providers, including IHCPs.
Report Process and Scope: In response to the concerns about network adequacy discussed
above, this report examined the availability of in-network providers in the Marketplace plans
offered at two Tribal sites—Hayward, WI, and North Fork, CA—as well as the availability of
“open network” plans in these locations. These sites were selected because they contain at

1 In this report, the term “Indian” is used to indicate an individual meeting the definition of Indian under the
Affordable Care Act, as an enrolled Tribal citizen or shareholder in an Alaska Native village or corporation.
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least one IHCP; contain non-IHCPs in the region; and vary in Marketplace type (one site resides
in a Federally-Facilitated Marketplace (FFM) state, and one site resides in a State-Based
Marketplace (SBM) state). The networks of the health plans available at each of the sites also
had been reviewed previously on a preliminary basis. In reviewing the plans and plan provider
networks in two Tribal locations for this report, a number of plan elements were evaluated.
The Marketplace plan elements reviewed could serve as a tool or “template” to others when
evaluating the network adequacy of the plan options available in their area.
Report Findings: This report found that, in each location studied, at least one plan option
provides access to a breadth of in-network providers (and under the ACA, requires no out-of-
pocket costs for Indians and limited out-of-pocket costs for non-Indians) and offers access to
out-of-network providers (which Indians can access without cost-sharing). In addition, at least
one plan option in each location includes access to the available IHCP, either as an in-network
or out-of-network provider. At the site in the one FFM state, the offering of contracts to IHCPs
by the health plans, as required in FFMs under federal regulations, has been inconsistent. No
such requirement exists in the second state (California), which has an SBM.
The availability of IHCPs as in-network providers is mixed. Some IHCPs are accessible as in-
network providers in some health plans. With other plans, the IHCPs are available only as non-
network providers (although the comprehensive Indian-specific cost-sharing protections still
apply for the Indian enrollees in the plan). Further, with some plans, IHCPs are not available at
all, as no contract has been executed between the health plan and the IHCP to be an in-network
provider, and the plan is either a closed-panel health maintenance organization (HMO) or an
exclusive provider organization (EPO) (which only reimburses for services provided at a narrow
group of in-network providers). Nonetheless, in this latter category of plans, one plan appears
to be making payments to the otherwise excluded IHCP under the section 206 requirements,
although the payment amounts appear to be inconsistent with the section 206 provisions.2 In
at least one instance in an FFM state, a health plan appears to have not offered a contract to an
IHCP operating in the plan’s service area, putting the health plan out of compliance with federal
regulations.
In addition to the various plan structures (e.g., PPO, HMO, EPO), the mixed availability of IHCPs
across health plans is a result of considerations of the IHCPs themselves. In instances where a
health plan has offered a contract, the IHCP might or might not enter into the contract after
considering a combination of factors, including what the plan’s payment rate(s) offered are

2 Section 206 of the Indian Health Care Improvement Act (IHCIA) provides for a right of recovery from an
insurance company and other third party entities, including QHP issuers, for reasonable charges billed by an IHCP
when providing services, or, if higher, the highest amount the third party would pay for services furnished by other
providers. This right of recovery applies whether the IHCP is in a plan network or not.
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(and whether the health plan has made the rate sheet available) and the degree to which
patients of an IHCP are enrolled in a particular health plan.
This report also found that, to date, the presence of “closed network” plans has not reduced
access to the range of providers available in either location. But the loss of as few as one issuer
available on the Marketplace in an area could leave only closed network plans on the
Marketplace and result in less than adequate provider options under Marketplace plans in the
future, particularly as it pertains to access to IHCPs.
Recommendations: In light of these findings, the potential for a diminished availability of in-
network providers in Marketplace plans is a cause for concern in at least one FFM site. As
recently recommended by the Tribal Self-Governance Advisory Committee in comments to the
Centers for Medicare and Medicaid Services (CMS),3 CMS should reconsider which plans are
designated as integrated delivery systems (a version of a closed network plan) and allowed to
utilize the “alternative ECP standard,” which permits exclusion of IHCPs from a plan’s provider
network.

3 See TSGAC comments on the Notice of Benefit and Payment Parameters, CMS-9934-P, dated October 6, 2016.
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Table of Contents
I. Introduction (page 7)
II. Federal Regulations on Marketplaces (page 10)
III. Lac Courte Oreilles (LCO) Chippewa Band of Lake Superior Indians of Wisconsin (page 15)
IV. North Fork Rancheria of Mono Indians of California (page 22)
V. Appendix (page 29)

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I. Introduction
Background
The Health Insurance Marketplace (Marketplace), established by the Patient Protection and
Affordable Care Act (ACA), enables consumers to compare available health plans, determine
eligibility for federal financial assistance, and enroll in comprehensive health insurance
coverage. Under federal regulations, health insurance issuers that offer health plans through
the Marketplace must operate provider networks that include adequate numbers and types of
providers to ensure timely access to services for enrollees and include an adequate number and
geographic distribution of essential community providers (ECPs, which include Indian health
care providers (IHCPs)), where available (see further discussion of these regulations in Section II
below).
In addition, under the ACA, individuals who meet the ACA’s definition of Indian (Indians)4 and
enroll in a health plan offered through the Marketplace qualify for comprehensive cost-sharing
protections, meaning these enrollees generally have no out-of-pocket spending for deductibles,
coinsurance, and copayments when receiving care. It is important to note, however, that these
cost-sharing protections apply only to covered services.
 “Closed network”5 plans (such as most HMOs and EPOs) do not cover services furnished
by out-of-network providers (with the exception of emergency care).
 Cost-sharing protections would not apply if Indians received services from out-of-
network providers when enrolled in a closed network plan.
 As such, Indians generally should enroll in an “open network”6 plan to take full
advantage of the cost-sharing protections.
As the Marketplace moves into its fourth year of operation, some concerns have arisen over
whether the health plans offered through the Marketplace include a sufficient number and
range of providers in their networks and whether a proliferation of “closed network” plans
could limit access to care. Given that the Indian-specific cost-sharing protections apply to
individuals who meet the ACA definition of Indian but not to non-enrolled descendants or other
family members who are not Indians, when evaluating the breadth of in-network providers and
the importance of “open network” plans, it is important to consider the differential impact on
Indian and non-Indian enrollees.

4 The ACA defines “Indian” as an individual who is a member of a federally-recognized Tribe or a shareholder in an
Alaska Native regional or village corporation.
5 “Closed network” plans, such as certain HMOs (health maintenance organizations) or EPOs (exclusive provider
organizations plans), make no payments for services furnished by out-of-network providers. The Indian-specific
cost-sharing protections do not apply to providers that are not eligible for payment from a health plan, such as
because the provider is not an in-network provider in a “closed network” plan.
6 “Open network” plans, such as PPO plans, make payments for services furnished by out-of-network providers.
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A review of the health plans available through the Marketplace at two Tribal sites—Hayward,
WI (Sawyer County), and North Fork, CA (Madera County)7—indicates that potential for
concern exists if a narrowing of health plan offerings occurs. But at the moment, in each of the
two locations studied, at least one plan option is available that provides a breadth of in-
network providers (with limited out-of-pocket costs for non-Indians) and that offers access to
out-of-network providers (which Indians can access without cost-sharing). In addition, at least
one plan option in each location includes access to the available IHCP, either as an in-network
or out-of-network provider. In the two locations studied, over the initial years of Marketplace
operations, either of the following has occurred: (1) an expansion of health plan options
(particularly as it pertains to the availability of “open network” plans) or (2) no diminution in
the breadth of available providers. For individuals selecting an “open network” Marketplace
plan in either of the two sites examined, plan enrollees:
 Generally have access to an adequate number and breadth of providers within the local
areas around the sites, as either in-network or out-of-network providers, including at
least one IHCP;8 and
 Have access to a greater number of providers outside of the specific geographic radii
examined in this review.
With regard to the availability of “open network” plans:
 Only one of the two issuers offers this type of plan through the Marketplace in
Hayward, WI (in 2014, no issuers offered an “open network” plan); and
 Three issuers offer “open network” plans through the Marketplace in North Fork, CA
(one of these issuers will exit the California Marketplace in 2017, however).
Given those findings, this review indicates that, at least over the initial three years of
Marketplace operations, the presence of “closed network” plans, such as EPOs, has not
diminished access to the range of providers in either location—at least in the primary county of
the two sites reviewed. It is important to note, however, that the growth of EPO plans in
absolute numbers and as a percentage of total available health plans in some Marketplace
regions remains a cause for concern. For example, in Rusk County, WI, which borders Sawyer
County to the south, four issuers offered Marketplace plans in 2016, but all of those plans were
“closed network” plans—58% HMOs and 42% EPOs. And, in fact, a number of LCO Tribal
members live in Rusk County.

7 The selected sites include one served by a Federally-Facilitated Marketplace (FFM), in which CMS has
responsibility for plan management functions, and one served by a State-Based Marketplace (SBM), in which the
state has responsibility for plan management functions.
8 In Hayward, WI, the IHCP (Lac Courte Oreilles Health Center) is not included as an in-network provider in any of
the available issuer networks. In North Fork, CA, the IHCP (Central Valley Indian Health) is included in two of the
five available issuer networks but is not included in the network of any “closed network” plans.
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Health Plan Type Definitions9
Health Maintenance Organizations (HMOs): HMOs (“closed network”) typically limit coverage
to health care services furnished by providers who work for or contract with the HMO. HMOs
generally do not cover or have limited coverage for out-of-network services, except in an
emergency. If enrollees use out-of-network providers, the plan might not make payment, and
enrollees might have to pay the full cost of the services rendered. Under an HMO, enrollees
usually have a designated primary care provider (PCP) and must obtain referrals to visit
specialists.
Exclusive Provider Organizations (EPOs): EPOs (“closed network”) typically limit coverage to
health care services furnished by providers in their network, except in an emergency. In EPOs,
enrollees generally can visit any in-network provider without obtaining a referral but, again,
receive no coverage for services provided by non-in network providers.
Preferred Provider Organizations (PPOs): PPOs (“open network”) offer the choice of obtaining
health care services from in-network or out-of-network providers. Typically, enrollees will have
lower out-of-pocket costs if they use in-network providers and will have higher out-of-pocket
costs if they use out-of-network providers. As compared with HMO plans, in PPOs, enrollees
generally have greater flexibility in receiving services without the need to obtain a referral.
NOTE:
 Indians enrolled in “open network” Marketplace plans can receive services from in-
network or out-of-network providers and have the plan pay for the full cost of the
services (including cost-sharing paid by the plan on behalf of the enrollee).
 For non-Indians (including American Indian/Alaska Natives who do not meet the ACA
definition of Indian), general cost-sharing protections are generally only applicable to in-
network providers. Services provided by non-in-network providers can be subject to
separate and higher deductibles and out-of-pocket costs. As such, although “open
network” Marketplace plans allow enrollees to receive services from any provider and
have the plan pay for at least part of the services, for non-Indians, it is important to
enroll in Marketplace plans that have a broad range of “in-network” providers, including
IHCPs.

9 See CMS, What You Should Know About Provider Networks (Washington, DC: Sept. 2015), at
https://marketplace.cms.gov/outreach-and-education/what-you-should-know-provider-networks.pdf.
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II. Federal Regulations on Marketplaces
Network Adequacy and Essential Community Providers10
To ensure network adequacy, federal regulations require health insurance issuers offering
qualified health plans (QHPs), including stand-alone dental plans (SADPs), through the
Marketplace to operate provider networks that include “sufficient numbers and types of
providers, including providers that specialize in mental health and substance use disorder
services, to assure that all services will be accessible without unreasonable delay.”11 Federal
regulations also require QHP networks to include a “sufficient number and geographic
distribution” of ECPs, including IHCPs, where available.12
In FFMs, as well as the newly created State-Based Marketplaces on the Federal Platform (SBM-
FPs), CMS has established more prescriptive standards for implementing the network adequacy
and ECP rules.
In regard to network adequacy requirements, CMS assesses QHP provider networks using a
“reasonable access” standard13 to identify those that fail to ensure access without
unreasonable delay, with a focus on several specialties. To determine whether QHP networks
provide reasonable access for these specialties, CMS reviews the provider data using specified
maximum time and distance standards. Specifically, CMS requires QHP networks to provide
access to at least one provider for each of these specialties for at least 90% of enrollees within
the time and distance standards. Issuers that fail to meet the time and distance standards can
engage in a justification process to explain why their network provides reasonable access
despite not meeting these standards.
In regard to ECP requirements, CMS uses a general enforcement standard14 under which it
considers QHP and SADP issuers to have satisfied federal regulations if they demonstrate
satisfaction of the following criteria (these requirements apply in FFM states wherein CMS is
conducting plan management functions):
 Contracts with at least 30% of available ECPs in the service area of each of their plans to
participate the provider network for the plans;

10 For states with FFMs in which CMS performs plan management functions, the agency provides issuers with
guidance on how it will enforce these requirements in an annual Letter to Issuers. States with FFMs in which the
state performs plan management functions, as well as states that operate SBMs, in many cases have flexibility to
follow an approach different from the one outlined in the letter.
11 See 45 CFR 156.230, Network adequacy standards.
12 See 45 CFR 156.235, Essential community providers.
13 States with FFMs in which the state performs plan management functions, as well as states that operate SBMs,
can use a similar approach but are not required to apply these standards.
14 States with FFMs in which the state performs plan management functions, as well as states that operate SBMs,
can use a similar approach but are not required to apply these standards.
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