The House passed Insurance Commissioner Laura Cali’s bill aimed at improving network adequacy for health insurance plans on Wednesday by a 56-1 vote, giving her and her agency a clear vote of confidence toward beginning the long administrative work needed to bring Oregon up to the standards of neighboring states.
“It’s intended to get some better standards and create some transparency,” Cali told The Lund Report. “Each plan will have to post a provider directory,” -- and revise it regularly as physicians move in and out of the plan’s network.
House Bill 2468 is vaguely written by design -- the heavy lifting will be done by the Oregon Insurance Division through its rulemaking process rather than by the Legislature. The bill has universal support from the insurance industry and consumer advocates.
“That rule-making is likely to be quite complicated and contentious,” said Jesse O’Brien, the healthcare advocate at the Oregon State Public Interest Research Group.
The bill is not prescriptive and Cali said she didn’t want her agency’s rules to get overly prescriptive, either. Insurers will be able to use existing national standards or develop new standards based on factors such as access and quality of care.
While Oregon is generally a leader in health insurance regulation, one clear blind spot rose to the surface during the first year of the new marketplace exchange -- the guarantee that insurance networks will have the providers needed to adequately serve all the people who buy a health plan, and the transparency to know whether individual providers are in each health plan’s network.
In late 2013, insurance agents such as Rick Skayhan of Leonard Adams Insurance, quickly noticed that many of the insurance companies on Cover Oregon were selling plans on the exchange that had much narrower networks than what was offered on the regular, unsubsidized market -- likely a cost-cutting measure built on the assumption that the people who need subsidies would also be costlier to insure.
While defining something like network adequacy may seem complex, there are already clear standards in place in Washington, California and in the Medicare Advantage system, according to O’Brien. If health plans adopt the Medicare guidelines, they would obviously have to include adequate pediatric and reproductive health networks, which are not applicable to Medicare plans, available to senior citizens.
“The bill will create a framework for implementing some more consumer protections,” O’Brien said. He supported the Legislature’s decision to defer much of this work to Cali and intends to keep a careful eye on that process. The Legislature could always be more prescriptive if the agency’s recommendations prove inadequate.
O’Brien said a posted directory of providers should offer more than just a list of doctors who accept any given health plan. Consumer complaints showed that insurance companies were listing doctors who weren’t accepting new patients, creating an illusion of a broad network that did not fit reality.
Sarah Higginbotham of the American Heart Association, who has participated in Insurance Division work groups on the subject with O’Brien and insurers, said that HB 2468 is a compromise because it will only cover the individual and small group markets, not all state-regulated health plans, as consumer advocates wanted.
“There are no basic standards in Oregon,” Higginbotham said. “It’s a really important first step.”
Insurance companies have less ability to provide inadequate networks for the large group market because large companies often hire consultants to analyze insurance plans and have the leverage to demand a fair plan. The individual and small group markets are also much more volatile and more subject to gimmicks designed to protect insurance company profits, hence the historic need for rate approval by the Insurance Division.
