Oct. 7—Seattle Children's Hospital filed suit recently against the state's insurance regulator for approving few marketplace plans that include it as a preferred provider.

The lawsuit may be among the first legal moves by a provider excluded from the narrow provider networks that dominate among plans in the new health insurance marketplaces.

The marketplaces, or exchanges, were created by the Affordable Care Act (ACA) to provide insurance options for the millions of people the law requires to obtain insurance—regardless of whether their employer offers insurance. The law also instituted a range of consumer protections, which insurers tried to offset the cost of through the use of narrow networks, in which a smaller number of providers agreed to lower rates in exchange for expected higher patient volumes.

Those narrow networks frequently excluded higher cost providers, such as academic medical centers and children’s hospitals. Enrollees who sought care at non-preferred providers could bear a significantly higher share of the cost of their care.

Most health plans sold through Oregon’s new health insurance marketplace excluded Seattle Children’s from its list of in-network providers. The limitation, according to the hospital, could impact the ability of parents to obtain or afford specialty care provided by the only pediatric hospital in King County and the only provider of many specialized pediatric services in the area, including acute cancer care, level IV neonatal intensive care, and heart, liver, and intestinal transplantation.

"Every child should have access to essential health care, and the intent of the new exchange is to make it available to all families," Thomas Hansen, MD, CEO of Seattle Children's, said in a release. "However, we are very concerned about the limited networks being offered by some exchange insurance plans. Omitting coverage for care at a facility like Children’s prevents families from accessing vital services they may desperately need."

Hospitals officials worried that parents may enroll in health plans through the exchange without realizing that Children’s is not included in the plan’s network.

Two of the seven insurers offering plans in the hospital’s county include Seattle Children’s in their network.

The lawsuit sought reconsideration of the insurance regulator’s approval of plans by two insurers—Molina Healthcare and Coordinated Care—that it approved and that kept the children’s hospital out of their preferred provider networks.

Publication Date: Monday, October 07, 2013