11 Ky. hospitals say they were excluded from exchange plans

Eleven Kentucky hospitals have filed complaints with the state's insurance department because they were left out of narrow provider networks in plans sold on Kynect, Kentucky's new insurance exchange.

Three hospitals—UK Healthcare Good Samaritan Hospital in Lexington, Our Lady of Bellefonte Hospital in Ashland, and Highlands Regional Medical Center in Prestonburg—argue in one of the complaints that they were inappropriately excluded from plans sold by Anthem Blue Cross and Blue Shield of Kentucky.

Disputes over who's included and who's left out of provider networks are expected to become common as the dust settles on the plans sold through the exchanges under the Patient Protection and Affordable Care Act. Limited arrays of physicians and doctors are a common feature of the plans, which are striving to offer low-cost products that appeal to Americans who have previously declined to buy health insurance.

To be included in Anthem's Kentucky network, hospitals must meet specific criteria, including the requirement that they serve—directly or through an affiliate—at least four of Kentucky's eight Medicaid regions and meet certain quality and cost-effective benchmarks. The insurance department has since ordered the insurer to accept applications from UK Healthcare, Our Lady of Bellefonte and Highlands Regional because they meet Anthem's conditions.

Officials have not shared the details of other complaints that are not yet resolved.

According to Anthem spokeswoman Gene Rodriquez, a network strategy pushes patients to hospitals with the best rates is necessary in order to keep plans affordable. “We did a lot of research, and it's what our own customers have asked for,” Rodriguez said. “It's to ensure those costs were kept at a reasonable rate.”

In addition to Anthem, four other insurers are selling policies through Kynect—Humana, United Healthcare, Bluegrass Family Health and Kentucky Health Cooperative. As of Nov. 21, more than 56,000 Kentucky residents had enrolled in health insurance through the exchange. Approximately 640,000 Kentuckians were uninsured when Kynect opened Oct. 1.

In October, Seattle (Wash.) Children's Hospital filed what was believed to be the first lawsuit to arise from friction over narrow networks in exchange plans, arguing that state regulators inappropriately approved plans that excluded the facility.

Follow Rachel Landen on Twitter: @MHrlanden