3 in 10 Medical Groups So Far Plan to Sign With Exchanges

October 08, 2013

The insurance marketplaces or exchanges created by the Affordable Care Act (ACA) have been open for business — shakily so — for a week. Unlike the general public, however, most group practices are keeping their distance, at least for now.

Only 29% of groups so far plan to participate as network providers in private health plans offered on the exchanges, and another 40% are still studying their options, according to a survey released yesterday by the Medical Group Management Association (MGMA).

Why the hesitation? One reason is below-average payment rates, cited as a major barrier by 85% of those groups thinking it over. A second reason, cited nearly as many groups (82.5%), is anxiety about having to collect from newly insured patients, many of whom will assume a high share of their total healthcare costs when coverage kicks in next year, the MGMA reports.

"Groups want to take care of the underserved, but they're wary," said Anders Gilberg, MGMA's senior vice president of government affairs, during a press conference yesterday at the group's annual conference in San Diego, California. "Patients...are going to be under high-deductible plans who weren't covered before. They've been told they have insurance, but they [first] have to go through several thousand dollars of deductible, and the practices will have to collect that. That seems to be a high challenge."

In a related collection matter, group practices say they do not want to get burned by a provision of the ACA about plan members who miss a premium payment. Under the law, they can catch up on their premiums during a 90-day grace period before their coverage is terminated, and the health plan will continue paying providers for services rendered during the first 30 days. However, if a member does not catch up on premiums, providers must collect from him or her for any services performed during the remaining 60 days — the health plan is off the hook.

The survey also revealed yet another explanation for why groups are generally standoffish about joining an exchange-plan network: They have low expectations about healthcare reform sending them a lot of patients to begin with.

"At least initially, physicians are taking a cautious approach with ACA exchanges," said MGMA President Susan Turney, MD, in a news release.

Not so cautious is the American public. The federally operated Web site serving most state exchanges has been malfunctioning since it debuted October 1 because of heavier-than-expected traffic.

Software glitches also have frustrated insurance shoppers. The Obama administration vows to work out the kinks, even as a partial government shutdown extends into its second week.

Pessimism Abounds

The MGMA received survey responses in September from more than 1000 practices with more than 47,000 physicians about what the exchanges mean to them.

Most groups are pessimistic about the effect of the exchanges on their practice: 40.5% predict it will be unfavorable, and 15% say it will be very unfavorable. Only about 16% think the exchanges will benefit them to some degree, with the remaining 28.4% of the groups on the fence.

A little more than 14% of groups say flat out that they will not sign on as network providers. The most frequently cited reason why is worry about the administrative and regulatory burdens imposed by exchange health plans. Not far behind is concern about patient collections and low reimbursement rates.

Word already has gotten out that private insurers offering health plans on the exchanges are paying physicians on the cheap: Almost 70% of groups that have received payment information from exchange insurers say the rates are either much lower or somewhat lower that the average rates paid by commercial payers. Another 37.8% say the ACA health plan payment rates are somewhere below traditional Medicare.

Groups intending to join a provider network of an exchange plan see some upside: For 57.7%, it is an opportunity to stay competitive in the marketplace. Another 51.2% anticipate replacing charity care patients with insured ones. And on a more altruistic note, 42.3% view participation as a way to care for an underserved population.

The flood of visitors reported at the federal exchange Web site and those sites operated by individual states may boost physician expectations about the prospect of new patients under the ACA. Nearly 68% of the groups surveyed by the MGMA expect only a slight increase or no increase at all in patients, whereas 52.8% do not intend to make any operational changes to accommodate the newly insured. Less than 5% expect to hire more clinicians and clinical support staff or expand office hours.

More information on the MGMA survey is available on the group's Web site.

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