ACOs Fuel Narrow-Network Trend in 2015 MA Plans

By Jill Brown - October 31, 2014

Some hospitals and physicians initially fought the move toward narrow provider networks, charging that they were being unfairly excluded in favor of lower-cost — and possibly lower-quality — providers. But with the rise of accountable care organizations (ACOs), many providers are partnering with insurers to form narrow-network Medicare Advantage plans — or even forming MA products of their own that cut out the insurer middleman.

Among them, Aetna Inc. launched a new zero-premium Medicare Advantage HMO plan that’s based on a network of three New Jersey health systems. Two of the providers — Atlantic Health System and Hackensack University Health Network — participate in the Medicare Shared Savings Program (MSSP), while Hunterdon Healthcare has commercial ACO-based contracts with Aetna and Horizon Blue Cross Blue Shield of New Jersey.

UnitedHealthcare established an ACO with two Illinois-based health systems to provide care for more than 65,000 Illinois residents enrolled in the insurer’s MA plans. Advocate Health Care’s ACO joined MSSP in July 2012, and Illinois Health Partners joined on Jan. 1.

And MedStar Family Choice, the insurance subsidiary of Maryland health system MedStar Health, is offering its own MedStar Medicare Choice MA plan for 2015.

Even a recent New England Journal of Medicine “Perspectives” piece championed insurers’ efforts to narrow networks. In the Aug. 14 article, Emory University health economist David Howard noted that CMS recently proposed network adequacy regs for exchanges. However, he warned, “These regulations promise to expand plans' networks, but regulators should not assume that a pro-provider stance is inherently pro-consumer or even pro-patient.” In fact, he wrote, “CMS network-adequacy regulations may lead to higher reimbursements, insurance premiums, and ultimately costs to taxpayers. These regulations could spur further consolidation, as independent physicians and smaller hospitals seek to negotiate under the umbrella of the ‘must have’ systems.”

What do you think? Is there still a coming backlash for narrow-network health plans? Or with providers on board, are they inevitable?

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