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Life Health > Health Insurance > Health Insurance

A network guy says ‘narrow’ works

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The head of a provider network company argues that plans offering smaller directories in exchange for lower premiums are here to stay.

Joseph Berardo Jr., chief executive officer of MagnaCare, talked about the new “narrow network” plans in a telephone interview.

MagnaCare runs a network that contracts with 70,000 providers in New York and New Jersey, and arrangements offering patients access to a total of 510,000 providers throughout the country.

The company markets provider networks to self-insured employers, unions, benefit plan administrators, workers’ comp insurers, and even commercial carriers. New York’s new nonprofit, member-owned co-op – Health Republic Insurance of New York – used a MagnaCare network to get up and running quickly.

Some enrollees in the new Patient Protection and Affordable Care Act plans have complained about inaccurate plan provider directories, and problems with getting the providers who, at least technically, agreed to be in the directories to accept reimbursement from the plans.

Insurance regulators in Washington have come out with new network adequacy rules. Regulators in other states and at the U.S. Department of Health and Human Services are considering setting new network adequacy rules of their own.

But more than 8 million people have selected plan coverage through the exchanges. 

Berardo said he thinks the success narrow-network plans have had with attracting enrollees speaks for itself.

Millions of people voluntarily signed up for the narrow-network plans, Berardo said.

“The push back comes from the press, or people who don’t understand the situation,” Berardo said.

Offering a combination of reasonable coverage prices, easy access to medical services, and unfettered access to providers is impossible, Berardo said.

“There’s going to have to be some kind of management of care,” he said. 

Berardo said he sees no indication in the bills and other data coming of MagnaCare’s in-network provider offices that PPACA has succeeded at changing the number of people who getting care in the Northeast, or the amount of care they are getting, in any obvious way.

But he said he also sees no signs that the exchange-sold plan or other new plans in the markets he serves are having any unusual problems with setting up and running their networks and network directories.

The new plans are simply facing the kinds of network problems they always have, Berardo said.

“We’re on a 10-year journey,” Berardo said.

Berardo does not see the accountable care organization movement having much of an effect.

He sees a market with many traditional providers; a few famous, highly integrated providers – the Kaisers and Geisingers; and some traditional providers that call themselves ACOs and would like to grow up to be ACOs.

In most cases, the ACO label “is really a press release,” Berardo said. “It’s not anything with substance.”

But all of the talk about integration could someday lead to true integration of provider health record systems and provider finances, and that could lead to genuine improvements in the health care delivery system, Berardo said.

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