WA: OIC Network Adequacy Rule Tilts Away From Providers To Plans

The Office of the Insurance Commissioner has released a new draft rule that will significantly impact the health care market and could prove very damaging to the delivery system in some markets.

The Network Rule CR-102 is still in draft form, with a public hearing set for April 22nd — just one week before the May 1 deadline for insurers to submit their 2015 exchange product filings to the OIC.  If Commissioner Mike Kreidler takes action to finalize the rule, he must do so by April 23rd without making any substantive changes. Alternatively, before that time, he has the option of pulling the draft rule from the rule-making process and using the additional time to collect broader stakeholder feedback.

Here are a couple of key elements of the draft rule in its current form that could have significant impacts on the market.

1.  The rule provides no geographic limit for determination of network adequacy for specialty services. Unlike every other service type, which has a defined geographic limit, adult specialty services do not.  To confuse matters further, some geographic limiting factors are defined in miles while others are defined in minutes (not sure how the OIC intends to measure minutes).

2.  The rule creates perhaps the most limited, exclusionary list of Essential Community Providers (ECP) in the country.  The federal CMS list of ECPs labels itself as “non-exhaustive,” suggesting other categories of providers should be implied to be included while the specific organization may not be explicitly included.  The state has heretofore accepted this list and nomenclature as well.  In the new draft rule, the language is more exact:

“Essential community provider” means providers listed on the Centers for Medicare and Medicaid Services Non-Exhaustive List of Essential Community Providers.

The new state definition of ECPs will include only those organizations specifically listed as such on the CMS list.

3. The rule includes a number of new elements related to filing an exchange insurance product.  There is an extensive list of new maps and “access plans” which plans will need to provide when they file.

Here’s the problem:  plans will have a week to develop those plans before the May 1 filing deadline.  These new requirements, which may or may not be adopted on April 23rd, will be in place for only 8 days until plans will need to file with the OIC to be on the Exchange.  That is an unreasonable amount of time – even particularly so after last summer’s challenges at the OIC.

4.  This rule was initially scheduled to be developed this coming summer and was supposed to include a broad stakeholder input plan.  But the OIC moved this rule up considerably, likely as a result of losing the appeals last fall by Exchange plan applicants.  Moving it up to April 23rd allowed the rule to be put in place ahead of the May 1 filing deadline, which would – in theory – help prepare the OIC for future appeals this fall resulting from their denial of Exchange applicants.  The irony is that the appeals may come, in part, because the plans won’t have adequate time to know the network adequacy rules by which their applications will be judged.

5.  Under the rule, a plan will only have to show that it made a good faith effort to contract with ECPs.  Currently, the OIC is allowed to see rates and terms of such negotiations as a tool to keep the parties at the table.  Arguably, that effort has been loosened considerably in the new definition.

An issuer must demonstrate a good faith effort to contract with that provider or providers for inclusion in its network, which will include documentation about the efforts to contract but not the substantive contract terms offered by either the issuer or the provider.

We’ll see how this plays out over the next few weeks.  I’ve not sought out feedback from plan or provider organizations or associations, but some of the initial comments I’ve heard are strongly negative.