Patients covered by managed-care insurance plans generally have fewer doctors to choose from. Hospital officials argue that this often makes it easier and sometimes even necessary for them to seek otherwise routine medical care at hospital emergency rooms.
Increased state oversight would help make sure managed-care plans have enough doctors in their networks, according to supporters of new legislation, while insurance-industry advocates argue more regulation would simply create more red tape – and that the real problem is doctors who balk at treating Medicaid patients because reimbursements are low.
A bill advancing in the state Assembly,/S-1211, would require insurers to hire outside firms to conduct two "audits" to determine whether their health-provider networks are adequate. In addition, the state auditor would perform a separate review of insurers that operate managed care organizations serving Medicaid patients.
Managed care plans, as their names imply, aim to reduce costs by actively managing patients’ care, generally offering more limited provider networks than traditional insurance plans.
But critics contend current state oversight hasn’t succeeded in producing networks that meet the needs of patients. They say this results in too many patients going to hospital emergency departments for both primary and specialty care. In addition, they say the provider lists on insurance company websites are outdated, leaving patients confused about which doctors are in their networks.
“Without maintaining an adequate network of providers for these patients to access services, patients will continue to utilize hospital emergency departments for services best rendered in a physician’s office,” said Neil Eicher, vice president of government relations and policy for the New Jersey Hospital Association.
But insurance industry representatives say the bill would only add more red tape without addressing the real reason why doctors choose not to join managed care networks, particularly those serving Medicaid recipients.
The state Departments of Banking and Human Services already separately oversees the adequacy of managed care networks, and the bill would result in four separate reviews of the same state regulations, according to Wardell Sanders, president of the New Jersey Association of Health Plans.
The Assembly Health and Senior Services Committee released the bill yesterday. The full Assembly previously passed the measure in 2011, but it died in the Senate.
The Medical Society of New Jersey, the state’s largest professional association for doctors, supports the bill. Timothy J. Martin, a lobbyist for the group, said the current system of state oversight isn’t working.
“We’re trying to find a way to better identify what physicians are practicing in the network,” Martin said.
Supporters of the bill said the number of newly insured people has heightened the need for insurers to expand their networks. Medicaid expanded by 396,000 state residents in 2014, while the individual insurance marketplace added 116,000 people in the first nine months of 2014. Tens of thousands more New Jersey residents are expected to enroll in the federal individual insurance marketplace by the end of the second open enrollment period on Feb. 15.
“All of them deserve to get what they’re paying for with their premiums,” said Mishael Azam, the Medical Society’s chief operating officer and legislative affairs senior manager.
Eicher said patients visit hospital emergency departments due to a shortage of available primary-care providers and specialists.
“Specialists such as pediatric psychiatrists and neurologists are almost impossible to access for many patients,” Eicher wrote in his testimony.
Sanders rejected the supporters’ arguments, contending that low government reimbursement rates in the Medicaid program are the primary reason why doctors aren’t joining managed care networks. New Jersey’s Medicaid reimbursements are among the lowest in the country. While Medicaid reimbursements have been equal to the much higher Medicare reimbursements over the past two years, the temporary increase ended at the start of the year.
“Plans have told me they can’t even get past the word ‘Medicaid,’ ” when they approach doctors about joining their networks, Sanders said.
Sanders said insurers are already doing what they can to entice doctors, and that the overlapping levels of state oversight from the Department of Banking and Insurance and the Department of Human Services already ensure that patients’ needs are met to the best of the insurers’ ability.
“It’s basically the same test, but it would be done by four entities rather than one or two,” Sanders said of the additional audits called for by the bill. “In this era of concern about government red tape and overlapping responsibility and efficiency of government, we would suggest that this approach is not likely to yield success.”
Wherever gaps exist, the state requires insurers to submit plans to correct them, but this is particularly difficult for Medicaid patients.
Sanders added that there are enough primary-care providers to serve those with insurance, but some patients still choose to go to hospitals, while hospitals themselves frequently advertise the ability of their emergency departments to handle minor injuries or illnesses.
Providers and insurers have been arguing over insurance networks in Assembly Financial Institutions and Insurance Committee hearings. Sanders has been joined by advocates for consumers and employers.