Calif. backs tougher rules on plan networks

A bill passed by California lawmakers last month addressing the adequacy of provider networks could mark an important development in the national political and policy debate over narrow networks.

Under the bill, which Gov. Jerry Brown had not signed as of Friday, California health plans would face new requirements designed to ensure they offer adequate provider networks. Insurers would have to provide annual reports to the California Department of Managed Health Care about their networks, and the agency's assessment of that data would be posted on its website. Brown's office did not indicate whether the governor would sign the bill.

“We believe that we're in good shape for him to sign it,” said Anthony Wright, executive director of Health Access California, which backed the bill.

Many healthcare and consumer groups support the bill, including the California Medical Association and AARP. But the California Association of Health Plans opposed the measure, arguing that there are already sufficient safeguards to ensure network adequacy. The California Department of Finance opposed the bill on similar grounds, warning that it could cause financial problems for the state Medi-Cal program.

The narrow network issue has been a volatile one in California. Lawsuits have been filed against Anthem Blue Cross and Blue Shield of California alleging they misled consumers about their provider networks. Those two insurers attracted the largest share of customers during the first open enrollment period, accounting for nearly 60% of Covered California signups. California regulators are also investigating network-related complaints against the insurers.

But many experts say insurers' narrow networks have enabled them to offer lower rates. The average proposed statewide rate increase for 2015 premiums in California is 4.2%, Covered California announced in July.

Wright said that there have been longstanding questions about network adequacy for Medi-Cal managed-care plans and private coverage options. “We thought it was crucial that there be scrutiny that people, once covered, have access to the care that they were promised,” he said. “The conversation around Covered California narrow networks only made that more urgent.”

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