Here are five things to know about the situation.
1. No other state marketplace has attempted something of this magnitude. Although Covered California CEO Peter Lee has discussed the possibility with other state marketplaces and government officials, it is still out of the ordinary.
“I don’t know of anyone even close to trying this,” said Dan Polsky, PhD, author of a 2015 study that found three quarters of Covered California plans have narrow physician networks, according to the report. “I applaud Covered California for being bold to improve quality and reduce costs, but I worry about the implementation.”
2. The proposal isn’t officially finalized. Covered California’s five-member board of directors will vote on the plan April 7, according to the report.
3. Through the plan, Covered California would evaluate hospitals based on quality and cost. To categorize outlying hospitals, Covered California will utilize Medicare data and examine various factors, including hospitals’ readmission rates, infection rates and adverse drug events. After the evaluation process — which would begin in 2018 — hospitals and physicians would be eliminated from Covered California’s network.
4. There are loopholes. As part of the plan, insurers have the option of petitioning for keeping certain hospitals in Covered California’s network. In addition, a hospital could remain in-network if elimination would cause a specific region to lack enough providers.
5. Not everyone is pleased with the proposed plan. Health systems and physicians have accused Covered California of not disclosing how it plans to evaluate hospitals.
David Perrott, MD, DDS, senior vice president and CMO of the California Hospital Association, is also discontented. “The devil is in the details, and the rapidity of this concerns us,” he said, according to the report. “…Covered California is charging ahead with this assessment and trying to figure out the answers when it hasn’t been worked out.”
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CMS fines Humana $3.1M for Medicare violations
