Reprinted from HEALTH PLAN WEEK, the most reliable source of
objective business, financial and regulatory news of the health insurance
industry.
By Judy
Packer Tursman, Senior Reporter
October 16, 2017 Volume 27 Issue 36
Texas state officials concede that network adequacy problems arose
when they switched to a new health plan for state employees on Sept. 1. In
Wichita Falls, major providers sped through negotiations with Blue Cross and
Blue Shield of Texas — selected in competitive bidding as the new third party
administrator (TPA) for the Employees Retirement System (ERS) of Texas’s
self-funded plans. That helped to avert major disruption to plan members there.
But it wasn’t as smooth elsewhere. Some plan enrollees, especially in Amarillo
and other parts of the state’s panhandle, immediately found it difficult to
find in-network providers, according to local media reports. As of mid-October,
ERS told AIS Health it is still working to rectify the situation.
ERS is “aware, and issues in the networking process are getting
resolved,” Mary Jane Wardlow, the state system’s spokesperson, told AIS Health
on Oct. 11. The next day Wardlow said ERS is involved in “regular
communications” with the Texas Blues insurer. Network negotiations are ongoing
with providers, she said, “and the network continues to build, closing gaps.”
According to ERS, its board of trustees selected the Texas Blues
insurer, which is part of Health Care Service Corp., as plan administrator for
HealthSelect of Texas and Consumer Directed HealthSelect of Texas for a
six-year contract with administrative services beginning Sept. 1. The plans
cover 400,000-plus participants, including employees and retirees of state
agencies and certain higher education institutions, along with their
dependents.
Under the agreement, ERS manages the contract and is responsible
for determining eligibility and enrollment for the plans. Also, ERS establishes
the plan design, setting copays, coinsurance and deductibles. The TPA’s
functions include processing claims and managing the provider network.
According to state officials, administration has accounted for about 3% of
overall HealthSelect costs, compared to an average of about 12% for similar
private-sector health plans.
Members Can Use PCP Contingency Plan
The Texas Blues insurer did not respond to requests for
information on network adequacy issues by HPW’s press time. But
ERS’s Wardlow offered further details on how the state is handling the
situation.
“We have a PCP [i.e., primary care physician] contingency plan in
place for [the Texas Blues’] HealthSelect members through the end of the year
and transition of care benefits that can address some issues,” Wardlow said.
Under the contingency plan, members can request network gap
exceptions that will allow out-of-network providers to be treated as in-network
if they live more than 30 miles from an in-network PCP, or more than 75 miles
from a specialist, Wardlow said.
On transition of care, she said, “participants who are receiving
care for a chronic illness or an acute medical condition, or pregnant and in
[the] second or third trimester may be able to continue to receive in network
health care services from their current provider for a certain period after
Sept. 1, 2017, even if [the] provider will no longer be in the HealthSelect
network. To access this, they need to fill out a Transition of Care form and submit
it to BCBS.”
Prior to Sept. 1, UnitedHealthcare had held the TPA contract for
Texas state employees since 2012, and the Texas Blues plan held it for a number
of years prior to that. The Texas Blues plan and United were the only two
companies that submitted proposals for the new TPA contract by the August 2016
deadline, Wardlow noted.
Texas Blues HMO Uses ‘Large Group’ Network
When the recent transition from United back to Blues coverage was
announced by the state, ERS officials touted Blue Cross and Blue Shield of
Texas’s HealthSelect network as having “more than 58,000 providers, with more
doctors, hospitals and other facilities added every day.”
Yet Kelly Fristoe, owner of an insurance agency, Financial
Partners, in Wichita Falls, Texas, tells AIS Health there was a fundamental
flaw in the network’s set-up.
“Blue Cross rolled out Sept. 1 and the rural markets did not have
adequate network providers,” says Fristoe, a past president of the Texas
Association of Health Underwriters. “Houston, Dallas [and other major urban
areas] had networks because they had large groups and this is a large-group
network….It is not the same network as for small group and individual plans,
which use the Blue Advantage network….It’s across the board: primary care,
specialists and hospital systems.”
Fristoe, who serves on the board of United Regional Health Care
System in Wichita Falls, says that it, as the region’s major hospital-based
system, was not a part of the Blues’ provider network for ERS enrollees. “They
got in the network on Sept. 1 [the official start date] at about 1 or 2 p.m.
and backdated it to midnight,” he says.
According to Fristoe, people in ERS’s health plans “tend to be
higher wage earners than people buying subsidized exchange coverage. The
president of the college and university, the high wage earner, sees the hospital
won’t be in the network…so the hospital system started jumping through hoops —
a little more aggressively than when networks were negotiated for individuals
and small groups last year.”
Fristoe explained that both Wichita Falls’ major hospital system
and a major physician clinic comprised of 30 to 40 primary care doctors and
specialists signed the ERS HMO agreement with Texas Blue Cross and Blue Shield
within several weeks. “Negotiations happened very quickly between Blue Cross
and these providers,” he said. He estimated the ERS contract has around 6,000
covered lives in the region.
By contrast, last year the Texas Blues insurer’s Blue Advantage
HMO provider contracts “took a very long time” to negotiate, and in the
meantime individuals didn’t have a Blues PPO option, he said. Thus, while
provider-insurer negotiations continued, individuals and small groups
throughout the Wichita Falls service area — roughly 12,000 to 15,000 people in
2016 — had to buy HMO coverage, and all of them could go only to the federally
qualified community health center (FQHC) and its four doctors in the HMO
network.
It took “an entire year, until December 2016 [for the region’s
major providers to sign the Blues’ HMO contracts], allowing more access to
doctors and the local hospital system,” Fristoe said. “But this large-group HMO
agreement was negotiated in a much quicker time.”
Fristoe describes a Texas health insurance market in which PPOs
are getting expensive and employers are shifting to HMOs. “We’re seeing about
30% of our employers choosing now to offer their employees an HMO plan,” he
said. Enrollment is expected to rise to 20,000 to 25,000 in HMOs in the small
group and individual market in the Wichita Falls region for 2018, he said.
Centers of excellence, including the University of Texas M.D.
Anderson Cancer Center in Houston, do not participate in the HMO network,
Fristoe said. “If you want access to those providers, you need to buy a PPO
plan, only available in the large- and small-group market,” he said.
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