Cedars-Sinai Didn’t Make the List in Year 1. What Will Year 2 of Narrow Networks Hold?

U.S. News & World Report ranks it the third-best hospital in California — the second-best hospital in Los Angeles.

Yet at the start of Obamacare’s first open enrollment period in 2013, Covered California customers who wanted to go to Cedars-Sinai Medical Center wouldn’t have been able to.

When the exchange announced its initial plans and rates in 2013, Anthem Blue Cross didn’t cover Cedars for Covered California participants. Neither did Blue Shield of California … or Health Net … or Kaiser Permanente … or L.A. Care … or Molina Healthcare.

Not a single health plan available through Covered California’s Region 15 and Region 16 — the Los Angeles County — initially offered access to Cedars-Sinai Medical Center last year. (Health Net ended up contracting with Cedars for the ACA’s first enrollment period.)

“We’ve had restricted managed care networks for years in California,” Anthony Wright of Health Access told California Healthline. “The issue of network adequacy and timely access isn’t new.”

“But the ACA makes the timely access to care issue more urgent, as insurers are faced with more intense price competition, and the new low- and moderate-income consumers in Covered California are least able to afford to go out-of-network.”

Two Sides to a Narrow Network

Earlier this year, Jonathan Cohn at The New Republic detailed how insurers’ decision to leave out Cedars-Sinai (and generally avoid UCLA, ranked the top hospital in California by U.S. News) was driven by a focus to control costs and offer low-price plans in the insurance exchange.

“To keep prices down, insurers are sending patients only to the doctors, clinics, and hospitals that have agreed to accept lower reimbursements,” Cohn wrote. Cedars was unwilling to concede to Anthem and Blue Shield’s price requests — a not uncommon phenomenon across the nation.

In New Hampshire — where Anthem was the lone insurer operating on the state’s exchange — 12 of the state’s 26 hospitals were left out of exchange plans. The only hospital in the capital city of Concord said no to Anthem’s request, worried that it would spark a chain reaction of giving in to lower prices.

All told, about half of the plans sold on HealthCare.gov and state health insurance exchanges in 2014 had “narrow networks,” a McKinsey report found.

The limited networks sparked a political and media outcry — especially among patients who had a specific preference for hospitals like Cedars and UCLA, which are known for their top-tier health services.

And while more than 400,000 consumers used Covered California to sign up for health plans in the Los Angeles area, Cedars said that the big enrollment number overlooks the rough experience some customers encountered in finding plans that covered their preferred providers.

“In last year’s initial exchange offerings, we found that the top priority for many consumers was finding a plan that enabled them to access Cedars-Sinai, even if they needed to switch insurance companies to do so,” according to a statement that Cedars gave to California Healthline

“We received calls and emails from thousands of consumers asking which insurance company they should select so that they could access Cedars-Sinai.”

How Year 2 Will Be Different

Narrow networks aren’t going away, given insurers’ effort to lower spending and push providers into tiers.

But the situation in the exchanges looks a bit different for the second enrollment period. In New Hampshire, a wave of new insurers will join the exchange and offer more options.

In California, Anthem and Cedars struck a deal this spring that will allow the hospital to be offered through Anthem’s plans in Covered California’s next enrollment period.

Darrel Ng, an Anthem spokesperson, said that the insurer’s goals are to balance access, quality and affordability for its members. So why did Anthem wait to add the hospital?

“Provider contracts don’t necessarily align with a calendar year,” Anthem’s Ng says.

“When we were able to come to an agreement with Cedars, we added them to the individual network as soon as possible to make them available to our members.”

On the other hand, why didn’t some insurers add Cedars? “Road to Reform” asked several plans for comment.

“Our significant gain in market share during the 2014 open enrollment indicates that we offered plans that consumers wanted to buy,” says Blue Shield spokesperson Sean Barry. (More than 115,000 Covered California customers in the Los Angeles area picked Blue Shield.)

He also points out that while Cedars-Sinai may not have made Blue Shield’s provider list, the health plan has been busy adding other hospitals and doctors to increase access to care — one of the goals of Covered California.

“Hospitals added in Southern California include the [three] Hoag Hospitals, Pomona Hospital, [and the seven] AHMC Hospitals,” Barry said. “We also recently added the Providence hospital system, bringing an additional five hospitals and more than 400 additional doctors to the region.”

“Covered California and the ACA were designed to offer consumers a choice of different health plans with varying networks and prices. With Cedars and UCLA in other regional health plan networks, customers can choose a plan that provides access to those facilities when making their decision.”

Consumer advocates say the public focus on narrow networks, while worthy, shouldn’t be the overarching goal.

“To be clear, we support the notion of insurers and Covered California bargaining for the best possible price,” says Wright of Health Access. That includes “the ability to say no, and to be more selective for providers who provide the best value,” he adds.

“Price isn’t necessarily indicative of quality,” Wright says. “Having strong standards on network adequacy doesn’t mean that every patient gets access to every doctor — but certainly to a doctor, when and where the patient needs it.”

Around the nation

Here’s what else is making news on the road to reform.

Arkansas marketplace premiums are going … down? David Ramsay at the Arkansas Times digs into data (that’s since been retracted by state officials) that suggested the premiums for plans sold on the state exchange will actually decline next year.

‘Obamacare’ is losing steam — as a hot-button issue: Derek Willis at the New York Times looks at how members of Congress are increasingly avoiding the term in their news releases.

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