A relatively new type of insurance plan, one that offers lower premiums but a limited network of doctors, has health care experts worried about the lack of consumer protections in place to regulate these plans in Missouri.
The new plans are known as exclusive provider organizations, or EPOs. To drive premiums to an attractive, low monthly rate, EPOs won’t pay for medical services that are provided by those outside its network of physicians.
That makes them similar to health maintenance organizations, or HMOs, which were popular in the 1990s.
In contrast, preferred provider organizations, or PPOs, allow patients to go to doctors outside of network, though they’ll reimburse at a lower rate.
Here’s the problem: Even though they mirror HMO plans in terms of the lack of out-of-network benefits, the EPOs don’t have the same protections in place to safeguard consumers from inadequate HMO plans in Missouri, according to Sidney Watson, health law professor at St. Louis University School of Law.
Without protections to ensure the physician network is adequate, Watson worries about the potential effect on patients’ access to care.
“You could have one endocrinologist, and there is such a need that people can’t get an appointment,” she said of the network.
The potential dangers of EPO plans have caught the attention of John Huff, the state’s top insurance regulator.
In July and September, Huff blocked UnitedHealth from offering two such group health plans in the state. Huff, in separate legal filings, said the group plans went too far by restricting access for even in-network doctors.
The plans required patients to obtain a referral from a primary care provider before seeing a specialist, or other network physicians, something that HMOs often do.
If a referral isn’t first obtained, one plan won’t pay for the treatment, while the other would require the patient pay more, depending on the plan.
By requiring a gatekeeper, the plans were trying to operate as an HMO without having to comply with HMO rules, according to the state insurance department. HMOs are reviewed and licensed differently from other insurance products in the state of Missouri.
“HMOs must comply with a myriad of statutory protections for their customers,” Huff said in the filing. “By contrast, an insurer offering an EPO-type product is not required to provide any of these protections.”
The insurer, which says its plans are legal under state law, said it is talking with the department to resolve the matter.
“We ... look forward to addressing any concerns they may have,” Jessica Kostner, spokeswoman for UnitedHealth, said in an emailed statement.
EPOs first began operating in Missouri last year. This type of insurance plan isn’t permitted in Illinois.
The state’s EPO provision was included in a 2013 bill, sponsored by Sen. Kiki Curls, D-Kansas City, that imposed restrictions on health insurance navigators, or individuals who help consumers shop for health insurance on HealthCare.gov.
Under Missouri law, an EPO is treated as an offshoot of PPOs, and not subject to rules that govern HMOs.
HMOs, for example, must demonstrate to state insurance regulators that the network of providers they include is adequate. They also must provide pricing protections that ensure that a patient won’t pay more if they’re forced to go outside the network because a service is not available. Protections are also in place to allow a patient to continue a treatment for up to 90 days after a contract between the HMO and a provider is terminated.
HMOs operate a tightly contained network of doctors with no access to out-of-network doctors and that’s the reasoning behind the consumer protection laws, Watson said.
No such adequacy requirements exist for PPOs in Missouri, Watson said. That’s because PPOs, in theory, don’t restrict their network; a consumer can go out-of-network but will pay more to do so.
The creation of the EPO, however, turned that reasoning on its head.
“The bottom line is: By not providing any out-of-network coverage, it’s an effort by the (EPO) plan to keep their costs lower and often by doing that they can keep premiums lower,” said Sabrina Corlette, project director at the Center on Health Insurance Reforms at Georgetown University.
Because price is a major factor in how consumers pick insurance plans, insurers are doing everything they can to offer a low premium, Corlette said.
While lower premiums make the plans attractive, consumers may not be aware of the financial risks and limited physician access of EPOs, experts warn.
St. Louis area residents who shopped for plans on HealthCare.gov, the federal government’s health insurance exchange, saw a dramatic jump in the number of EPO plans offered this year.
Seven EPO plans were available in the St. Louis area for 2015 coverage. That number more than doubled, to 16, for coverage beginning Jan. 1. Missouri’s Department of Insurance could not tell the Post-Dispatch how many EPO plans are offered elsewhere in the state.
That’s because state law does not require insurers to submit filings based on the product type unless it is an HMO plan.
After a review by the Post-Dispatch, it appears that one plan does not have any in-network health providers for certain specialties that are required under the Affordable Care Act.
According to Cigna’s provider directory for its EPO plan, sold on HealthCare.gov, the network does not list anyone who can provide speech therapy or occupational therapy.
“It’s absolutely concerning,” Corlette said of the potential lack of access to these health professionals. “It suggests to me that the federal regulators need to take another look at these plans and assess whether they meet network adequacy standards.”
A Cigna spokeswoman told the Post-Dispatch that even though those services appear to be out-of-network because of the lack of available provider information in the directory, those services would be covered at in-network rates.
“We want them to work with their primary care physician to find the therapist who best meets their needs and personal circumstances,” Amy Szable said in an emailed statement.
For plans being sold on the federal exchange, they do have broad adequacy requirements.
But the National Association of Insurance Commissioners is hoping those adequacy standards go even further in the years to come.
The group has a draft of a model law that they would like all states to adopt.
It ensures that adequacy standards exist across all types of insurance plans instead of targeting types of plans.
“It is a problem because a lot of state laws are still written in terms of HMOs and it’s a distinction that doesn’t make much sense anymore,” said Tim Jost, health law expert with the Commonwealth Foundation.
Samantha Liss • 314-340-8017
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