Centene Corp. rushed to fill the void when many bigger insurers gave up on the Affordable Care Act public exchange system, but a lawsuit alleges that the fast-growing insurer’s coverage is less robust than advertised.
The company misled customers about the number of doctors covered under its health plans, offering individuals who bought exchange plan coverage skimpier insurance than they signed up for, according to the federal suit filed in Washington State on Thursday.
Customers in Centene’s exchange plans had difficulty finding care providers who’d accept their insurance, the suit says, and discovered that even doctors listed by Centene as taking its coverage often didn’t.
“Members have difficulty finding — and in many cases cannot find — medical providers who will accept Ambetter insurance,” according to the lawsuit. “After purchasing an Ambetter insurance plan, they learn that the provider network Centene represented was available to Ambetter policyholders was in material measure, if not largely, fictitious.”
The suit, filed on behalf of two Centene customers, seeks class-action status to represent all customers of the insurer’s exchange plans, which are sold under the Ambetter brand.
“Our networks are adequate and we work in partnership with our states to ensure our networks are adequate and our members have access to high-quality health care,” said Centene spokeswoman Marcela Hawn. She said the insurer had not seen the lawsuit.
Centene, which specializes in covering low-income individuals, has been expanding in the Affordable Care Act’s marketplaces even as rivals retreat. That has left consumers in some parts of the country with little choice of Obamacare plans; in many counties where it expanded, Centene is the only insurer offering coverage under the health law. The company, based in St. Louis, now has more than 1.4 million customers in its ACA plans across 15 states, placing it among the largest insurers in the program.
Narrow networks that limit which doctors and hospitals customers can use are a common feature of ACA coverage. Researchers at the University of Pennsylvania found that about 21% of ACA plan networks cover less than a quarter of the doctors in their area. A study from McKinsey showed about 43% of hospital networks were fairly limited.
Chief Executive Officer Michael Neidorff built up Centene by covering poor, disabled and pregnant individuals in state Medicaid programs. The company has used many of the skills and strategies developed in that program in its ACA plans, including limiting where its members can get care to hospitals and doctors willing to accept lower reimbursement rates.
The scrutiny of the company’s provider networks could limit its expansion plans or reduce profits. Washington state’s insurance regulator briefly forced Centene to halt sales late last year after finding the company failed to include enough care providers in its network. The insurer has to fix the problem and submit to outside monitoring. Centene is also seeking to expand into New York by acquiring the health insurer Fidelis Care.
Cheaper at a Cost
Less-expansive insurance can have upside for consumers. Researchers found that ACA plans offering more limited coverage of hospitals and doctors were 16% cheaper than plans with broad coverage.
The lawsuit, though, says Centene’s customers weren’t aware of their plans’ limits. The suit says Centene has listed medical students in its provider network, as well as doctors who’ve asked to be removed.
“Centene misrepresents the number, location, and existence of purported providers by listing physicians, medical groups, and other providers — some of whom have specifically asked to be removed — as participants in their network and by listing nurses and other non-physicians as primary care providers,” according to the suit.
In one case, Centene assigned an obstetrician-gynecologist to a man as a primary-care provider. The physician didn’t provide care to men. The suit also says Centene makes it hard for doctors to get paid for the care they provide, leading them to stop taking the coverage.
The case is Harvey v. Centene Corp., 18-cv-00012, U.S. District Court, Eastern District of Washington (Spokane).
—With assistance from Andrew Harris.
—Read HealthCare.gov to Post Network Size Ratings in 6 States on ThinkAdvisor.