Insurers draw heat for error-riddled provider directories

A ruling in California that two major health insurers failed to give consumers accurate information about providers participating in their plan networks could force others in the industry to quickly improve their protocols.

The California Department of Managed Health Care released scathing reports Tuesday regarding plans sold by Anthem Blue Cross (a subsidiary of investor-owned WellPoint) and Blue Shield of California on Covered California, the state's Obamacare exchange.

The report on Anthem (PDF) found that 12.5% of the physicians listed in the insurer's provider directory for exchange plans had inaccurate locations. Further, the state called thousands of doctor offices and found almost 13% did not take patients who had Anthem's exchange plans even though they were listed as in-network.

The state's report on Blue Shield (PDF) said 18.2% of doctors in the plan directory were not located where the insurer said they were, and 9% of doctors were not willing to accept patients who had Blue Shield's Covered California plans.

“You can't have health reform that's based on insurance markets that are selling standard products and not have this information available to consumers and purchasers,” said Gerald Kominski, director of the UCLA Center for Health Policy Research in Los Angeles.

Anthem and Blue Shield, which together captured more than half the enrollees in the state's exchange plans this year, called the reports “inaccurate” and said the state's methodology was flawed because it relied on phone surveys.

There are no immediate repercussions from the state's analysis. Regulators said they referred the findings of the reports to the state Office of Enforcement, and a follow-up survey will be conducted in six months. No financial penalties were levied. But the state's scrutiny reflects growing concern about the adequacy of provider networks sold on the exchanges and the accuracy of information provided to consumers.

Many payers and providers across the country are building narrow networks, which are health plans that limit which doctors and hospitals patients can go to for care. Insurers say the HMO-style narrow networks—exclusive provider organizations are another variation—hold down the price of premiums and force providers to improve their quality to be part of the network. But some argue narrow networks could leave consumers with inadequate healthcare options and high out-of-pocket costs if they ultimately choose a provider that's out of network—a problem that is compounded if an insurer has an inaccurate provider directory.

The California case revolves around two issues with narrow networks, said Piper Su, vice president of health policy at the Advisory Board Co. The first is defining and measuring what constitutes an adequate network. Patient advocates say low-cost plan options shouldn't come at the expense of access.

“As health plans continue to change how they design their provider networks, it's critical that these designs do not hamper consumers' ability to obtain the right care at the right time, without traveling too far,” Claire McAndrew, the private insurance program director for Families USA, wrote in a paper (PDF) released this month.

The second issue is the crux of the Anthem and Blue Shield reports, Su said: Do consumers have accurate and fair information about what their health plan networks look like? According to California officials, Anthem and Blue Shield partially failed in that respect.

“Some of the difficulties we've seen in California may be related to hiccups that come with launching an entirely new insurance market,” Su said. But, she added, there's little debate around whether health plans should provide the most accurate, up-to-date information to policyholders on in-network hospitals and physicians.

Some states have laws on the books requiring managed-care organizations to post accurate in-network provider information routinely. For example, New Jersey mandates all managed-care plans to confirm if a doctor or hospital is still in the network if the provider has not submitted a claim for 12 months or has stopped communicating with the plan. In Washington state, insurers must update their provider directories monthly and provide supplemental information, such as the languages the doctor speaks.

Experts say more clarity will hopefully arise from the National Association of Insurance Commissioners, which recently released draft rules on narrow networks (PDF). When it comes to accurate provider directories, the authors wrote that “health plans should be required to update electronic provider directories at least monthly” to ensure patients have the latest information on which providers are still in given network.

California is far from the only state having problems with out-of-date lists of hospitals and doctors. A recent study from Georgetown University's Center on Health Insurance Reforms found that consumers generally have not complained about narrow networks, but they have complained about inaccurate or obsolete provider directories. Few states are doing anything to improve the situation, the authors said.

“What's the point of open enrollment if you can't be an informed decisionmaker?” UCLA's Kominski added. “It's crucial states follow up on this and hold insurers accountable.”

Follow Bob Herman on Twitter: @MHbherman