Narrow Networks, Broad Complaints

Everything about "narrow networks" suggests they were destined to be unpopular.

Patients don't like having fewer choices: The model relies on insurance companies using quality and cost metrics to trim the number of covered healthcare providers.

Providers don't like being denied access to revenue: For many hospitals and doctors, suddenly being excluded from said plans is a cause for concern.

The connotations of a 'narrow' version aren't great: Some advocates of the model say the terminology is potentially inflammatory -- so much so that they're encouraging replacement terms like "high-performance networks."

Narrow networks aren't new. The idea of trading lower choice for lower health spending dates back decades in health care, and the model was gaining in popularity among insurers and employers several years before the passage of the Affordable Care Act.

But narrow networks are at the heart of many of the new health plans rolled out through the ACA. The law's ambitious goals to simultaneously expand health coverage while keeping costs low forced insurers to push some providers to take less money – or push them out of networks altogether.

"This is really the only way to get to the price point that I think everyone believes will be attractive to the consumer," MagnaCare Chief Executive Officer Joseph Berardo recently recently told NJBiz. "You're looking at a price point that could be 15% and 20% below the broader network."

All told, about half of the plans sold on HealthCare.gov and the other new insurance exchanges in 2014 were "narrow networks," consulting firm McKinsey found.

On a broad scale, there's no reason to think that patients would be negatively affected. A number of studies have found that there's not much connection between provider choice and patient outcomes. Drew Harris at the Jefferson School of Population Health even suggests that a narrow network could lead to better provider teamwork – and potentially better care.

And the thing is -- as patients were briefed on the concept behind narrow networks, they grew to like them. According to a Kaiser Family Foundation tracking poll in February, most would-be exchange customers preferred narrow networks after they were told they could reduce their health spending by 25%.

But the vision of narrow networks is encountering a more troublesome reality. In California, hundreds of residents have filed complaints against Anthem Blue Cross and Blue Shield of California, suggesting that the provider lists provided by Covered California are at best inaccurate and at worst misleading.

"I thought I had done everything right, and it's been awful," one cancer patient told the Los Angeles Times, after receiving an $8,000 bill. 

A number of patients in remote areas also say they've had problems finding specialists who take their new insurance.

Having been hit by unexpected bills, some unhappy patients have turned to the courts to try and seek resolution.

A class-action lawsuit filed in May charges that individuals who purchased PPO plans from Blue Shield of California were misled by the number of providers who would actually be covered.

The plaintiffs specifically allege that they received numerous medical treatments this year between January and March but later discovered – thanks to exorbitant out-of-pocket spending – that their providers were not covered under their network.

It's not just patients who are suing, either. In Washington state, a lawsuit over whether Seattle Children's Hospital was unfairly excluded from narrow-network plans has dragged on for months.

The surge in complaints has spurred regulators to get involved. California's Department of Managed Health Care is in the middle of a two-month investigation into the accuracy of provider lists provided by Anthem Blue Cross and Blue Shield of California.

"There's always going to be bumps along the way," acknowledged Shelley Rouillard, DMHC's director, "but the consumers who are purchasing coverage need to know that what they're buying is really being advertised correctly."

The findings won't be released for several weeks, but according to a DMHC spokesperson, the department's initial investigation "gave us good cause to believe there are violations of the law."

Dan Diamond is an editor with the Advisory Board Company. A version of this article originally appeared on California HealthLine.