The ‘Narrow Network’ Trap—and How to Avoid It
Establishing protocols for checking eligibility and benefits for every patient is one way that physician practices can avoid the traps posed by narrow networks.
Insurance eligibility is getting even more complicated.
Since the advent of the Affordable Care Act (ACA), there has been an increase in narrow networks, defined by the Robert Wood Johnson Foundation as those that include less than 25 percent of healthcare providers in a market. Narrow networks are an unintended consequence of one of the ACA’s key objectives—by increasing competition among insurers, the law sought to encourage them to offer low-cost products. Offering limited-network plans gives insurers leverage to negotiate lower prices, either by selectively excluding high-cost providers or by promising high patient volumes to certain providers if they are willing to negotiate lower rates in return.
As a result, narrow networks have exploded in volume in recent years. As published in Health Affairs , researchers at the University of Pennsylvania found significant variation in ACA-marketplace network breadth, based on physician participation, as early as 2014. To wit, about 41 percent of 2014 plans had networks in which fewer than 25 percent of area physicians participated. And the number of such networks continues to rise.
Although only 7 percent of employers with health plans offered a narrow network in 2016, according to a study by the Employee Benefit Research Institute, we anticipate that the trend will accelerate as employers seek to provide lower-cost options to their employees. We also expect an increase in ultra-narrow networks (defined as including fewer than 30 percent of hospitals and 15 percent of providers) that would limit options even further as a means to cut costs.
As well-intentioned and perhaps effective at controlling costs as they have been, narrow networks have greatly complicated the medical billing process, often resulting in delayed or lost revenue for physician practices that do not make the necessary adjustments to their billing procedures.
The following approaches can help practices avoid this trap.
Check Eligibility and Benefits for Every Patient
Practices should not assume that they are in network with a patient just because they are contracted with a particular health plan. It was once true that if a practice was contracted with a plan under a PPO arrangement, it was contracted for all of the plan’s patients who were covered under PPOs. With the rise of narrow networks, that is no longer the case.
Practices should consider checking eligibility for each visit, or at least doing so periodically, for patients who are in network—especially for major services such as surgical procedures and imaging studies. Even patients who are generally covered by a plan with which the practice has contracted may not have coverage for scheduled services. Practices should review coverage carefully to understand these nuances and, if necessary, get a coverage determination.
When checking eligibility, practices should not lean too heavily on electronic health record (EHR) software. These software solutions are limited by the clearinghouse they use and how many connections they have with health plans. A practice may well find that 10 to 20 percent of its patients cannot be checked, and that rate could rise to 30 or 40 percent among patients with less common plans.
Some EHRs will enable a practice to designate two clearinghouses or choose its own. When making this selection, it is important to check the payer mix to ensure that a sufficient percentage of patients would be tracked in the clearinghouses offered. If that would not be the case, the practice may need to select a different software vendor or set up workarounds to check who is covered.
For any health plans that cannot be checked automatically or through the EHR, creating a user account on the insurer’s website provides access to a portal through which patient eligibility can be checked.
Key steps should be taken prior to a patient visit. Practices should obtain a copy of the patient’s insurance card, even if it must be emailed or faxed. The practice then can determine whether authorization or referral is needed.
Medicare and Medicaid patients warrant careful attention. Most Medicare Advantage patients are unaware of the difference between their coverage and standard Medicare, so they often just present with their Medicare card. They may be covered for a service and not know it. In addition, many Medicaid managed care organizations have extremely limited networks, and patients may change plans frequently.
Stay on Top of Network Details
If the practice is contracted only with certain ACA plan levels, it can be confusing to patients and providers. Consider the example of a patient who presents to the provider with a BCBS PPO Bronze plan. The front office or intake staff knows the practice is contracted with BCBS, so they tell the patient he or she is in network. A clinician then treats the patient, and the practice bills the patient’s insurance. The claim is processed as an out-of-network claim by BCBS because the practice is not contracted for that plan level. The result typically is a much higher deductible and the application of coinsurance to the claim, often leading to lower payment from the insurer.
A feedback loop should allow collectors and payment posters to communicate which claims are being adjudicated out of network, and on which plans, to contracting and eligibility staff. Each of these departments should maintain a database of plans with which the practice is contracted. Eligibility staff then should modify their intake procedure to notify patients of whether they are in network based on their plan.
The practice should also decide whether it wants to try and entice patients who have out-of-network benefits to receive services at the practice, and then develop a communication plan to inform patients how to retain those services. This plan should be rolled out to eligibility, front desk, and intake staff.
In addition, based on feedback from other departments, contracting staff should determine whether any changes should be made to the plans for which the practice is contracted. All of this work takes substantial management planning, coordination, and ongoing maintenance.
Take a look at some of the subjects that require expertise:
- The various health plan products: Platinum, Gold, Silver, Bronze (and combinations thereof)
- Narrow-network exclusivity based on geography, patient volume, and healthcare needs
- Health insurers and healthcare population management networks
And a few of the questions that merit consideration:
- Are you eligible to participate in certain product lines?
- Do you choose to participate in those product lines?
- What’s hidden in the fine print of the contract (i.e., are you actually receiving what you chose)?
Review and Manage Contracts Meticulously
Not understanding contracts can have adverse consequences. Oftentimes, a practice will be working off old contracts that do not reflect rate changes. A practice could even get kicked out of a network and not know until the payment is denied. Or payment could be made but the practice may not realize that it is getting adjudicated out of network. In that scenario, the practice could receive an explanation of benefits, assume the bill is unfortunately correct, and proceed to bill the patient. This process could take months or longer to resolve.
When the ACA rolled out, many providers chose to contract only for the higher-reimbursing plans like Platinum and Gold, not realizing how many patients they might lose or the confusion that might occur when the front office believes and conveys inaccurately to patients that they are in network for their Bronze or Silver plan. Many practices are experiencing volume loss and hoping to contract with other plan levels, especially given that as of 2017, more than two-thirds of marketplace enrollees were in Silver plans. While some plans will accommodate practices in this regard, many have closed the networks for less expensive plans (thus the “narrow” in narrow networks), and these providers are not able to get back onto those panels.
Worth noting is that when asked for contracted rates, the insurance company will often simply decline—or perhaps send no more than three codes at a time. The insurer may try to send the rates on paper or via fax. The insurer is, however, required by law to send these rates electronically, so practices should persist until receiving the information. Practices should know the law and their rights.
In this new reality, contract review and contract management are more vital than ever. The following steps can help a practice be proactive and avoid mistakes:
- When and where possible, renegotiate existing contracts to gain access to other product lines (e.g., Silver and Bronze plans).
- Take note of auto-renewal dates on existing contracts and review 90 days prior.
- Seek to maintain patient volume per plan and product line (pay attention to any changes in where patient populations are going).
- Add new product lines when applicable and advantageous and terminate undesirable product lines.
Perhaps the most important thing for a practice to do to maintain collections is to monitor results. All best practices will be in vain if employees fail to follow them. And in some cases, problems will emerge that are beyond anyone’s control.
For example, one practice was seeing an unusually high percentage of coverage denials of Medicaid patients due to ineligibility. As it turned out, this problem was caused by delays in updating the state government’s Medicaid website. Patients who had valid coverage but may have changed plans within a 90-day window were still listed on their old (i.e., incorrect) plans. The problem was ultimately addressed by allowing a 90-day waiting period to get updated patient-eligibility information prior to submission of each claim.
Setting up analytics that will indicate a practice’s performance is crucial. The following steps should be considered:
- Track the rate at which patient eligibility is checked on the front end (i.e., prior to the patient visit).
- Track all denials on the back end and quantify the results, which entails determining how well the written protocols are being adhered to and whether they are effective when followed.
- Offer incentives to employees, such as bonuses or flex time, for consistency in following the protocols.
- If there are eligibility or coverage problems on the back end, provide a feedback loop from the medical billing team to the front desk to improve performance.
The Stakes Are High
The enactment of the ACA has prompted an explosion of insurance products that are designed to be very cost-effective. And while this shift has resulted in some savings for patients, it has fractionalized and complicated the medical billing and payment collection process.
This phenomenon is not likely to slow down anytime soon. Investing time and resources in the above guidelines can help ensure that collections don’t suffer.
Sean McSweeney is founder and president, Apache Health.