Most Medical Groups Are in ACA Exchanges and Dislike It

May 27, 2014

Group practices are participating in new insurance plans created by healthcare reform by and large, but they are grumbling about it, mostly because of administrative hassles and narrow provider networks, according to a new survey by the Medical Group Management Association (MGMA).

Almost 77% of MGMA members have agreed to be network providers in 1 or more private insurance plans sold through state marketplaces, or exchanges, under the Affordable Care Act (ACA). The leading reason for signing up, cited by 58% of participants, was to remain competitive in their local market.

But what do group practices expect to gain from the ACA exchanges? Not much, according to the survey, released on May 20. Fifty-nine percent of all practices, participating or not, said the exchanges will have either an unfavorable (44.3%) or very unfavorable (15.1%) effect on them. Only 13.8% of the 700-plus groups polled predicted a favorable or very favorable effect.

For participants, the negatives already are rolling in. Figuring out whether a privately insured patient has an ACA plan or not is one headache: Roughly 6 in 10 groups said it was moderately, very, or extremely difficult to distinguish between patients with ACA insurance coverage and those with traditional private coverage. Along these same lines, most groups said it was more difficult to verify patient eligibility, obtain cost-sharing information, and find out who else was in the patient's network when the patient had ACA coverage vs regular private coverage.

"We thought we would be able to identify ACA insurance exchange products by their insurance card, but quickly found out this isn't so," one group administrator told the MGMA. Another said it would have to hire more staffers "just to manage the insurance verification process."

Network Inadequacy?

The MGMA survey also reveals that the debut of ACA health plans has disrupted physician–patient relationships for many groups because of the narrow nature of provider networks. For their part, health insurers maintain that contracting with only high-quality, low-cost physicians is an economic necessity. Furthermore, they say it is easier to manage a smaller, as opposed to a larger, group of physicians to get what they want.

For 50% of groups surveyed, the network door has been open; the groups reported they have not been excluded from provider panels they wanted to join. Nevertheless, 1 in 5 practices experienced rejection and another 10% chose not to participate in any ACA plan. The remaining responses fell under the categories "do not know" or "not applicable."

Four in 10 practices said they were prevented from providing covered services to patients in an exchange plan because they did not belong to its provider network.

"Former patients were shocked to learn about their very narrow network of providers," one practice administrator said. "It was terrible to inform them of their lack of coverage." Similarly, another wrote, "We are consistently denied 'out of network' approvals for the very sick who truly need to continue their care with providers who have worked with the patient for years."

Similar complaints have surfaced as private insurers have shrunk their provider networks in Medicare Advantage plans. Some physicians have responded by taking these insurers to court.

The controversy over narrow networks is on the radar of the federal government. In a statement issued to Medscape Medical News, the Centers for Medicare & Medicaid Services (CMS) said that it was working to strengthen requirements under the ACA for provider networks to adequately serve exchange plan enrollees. For one thing, CMS will take a closer look at whether a network has enough providers, and a sufficient variety of them, for enrollees to get the services they need without unreasonable delay.

CMS also is fine-tuning network adequacy requirements designed to protect the most vulnerable ACA enrollees. Right now, those requirements call for a provider network to include at least 20% of available "essential community providers," defined as clinicians who treat predominantly poor and medically underserved individuals. In 2015, that threshold will increase to 30%.

Almost 1 in 2 Groups Say ACA Plans Outpay Medicaid

The grumbling about ACA health plans comes at a time when group practices are getting their feet wet in healthcare reform. Although 93.9% of participating practices had seen patients with ACA coverage, only 1.4% said that their patient population had increased significantly as a result, and for 24.4%, the increase was slight; 56.4% reported no change. Groups expect the law will fill more empty chairs in their waiting room by year's end, with 7.5% predicting a significant increase in their patient base and 44.3% a slight increase.

In terms of physician reimbursement, rates offered by ACA plans generally equalled (28.5%) or exceeded (46.4%) those from state Medicaid programs. The same pattern held true, more or less, for Medicare: Almost a third reported that ACA plans matched what Medicare paid, whereas 30.1% said ACA rates were somewhat higher or much higher.

ACA plans compare less favorably with traditional private plans in terms of reimbursement, however. One in 2 practices said what ACA plans paid was either much lower or somewhat lower than what they received from other private plans. There was pay parity for 36.6% of groups.

Skimpier ACA rates, judging by typical commercial rates, at least, are part of the narrow network strategy in the health insurance industry. Insurers sometimes promise physicians that by virtue of fewer network competitors, they will see a higher volume of patients than they normally are accustomed to in a private plan, which will make up for the lower rates.

However, the prospect of getting paid anything under an ACA plan is attractive enough for many physicians: Almost 1 in 4 groups said they were participating in an ACA plan because charity care patients would become paying ones.

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