Participating in New Healthcare Exchange Plans

February 19, 2014

As a physician, the decision to participate in new healthcare exchange plans may not be up to you. Make sure you understand all the nuances.

It is early with regard to the healthcare exchange plans and yet practices across the country are already feeling the impact. It's not just consumers who have experienced problems while attempting to sign up for the exchange plans on the healthcare.gov website; providers too are dealing with major headaches as they navigate through the first couple of months of this new system.

Let me explain. The insurance companies created something called "narrow networks" within their full network of providers. What that means is that only a subset of physicians within any given insurance company's network "qualified" for participation in the exchange plans. The result is that while some physicians got rolled into these plans, others were excluded, even though they participate in some of the other products with that particular insurance company. For example, a physician could be participating with an HMO and a PPO-type product, but be excluded from the exchange product. This has created a dilemma for many practices. On the one hand, it means no new business coming in from new exchange members. On the other hand, it also means scrambling to hold onto existing patients that have switched to these new, lower-priced health insurance products.

The physicians that were rolled in (or opted in, in many cases) to the new exchange networks are struggling to determine new patients' eligibility under these plans. Many patients have not yet received insurance cards, and those that have are sometimes finding that their physician was mistakenly listed on the website as a "participating" provider.

In addition, those physicians who are participating with the exchange plans are finding that they are getting paid less for doing more. That is, not only are the rates less in these plans, but many patients who previously did not have health insurance may have gone without care for prolonged periods of time. As a result, they are typically sicker than patients who have been under care over time.

Also, signing up for participation in these plans means accepting a lower payment rate because the insurance companies are offering these as "budget" plans with low premiums. Naturally, the discounts have to come from somewhere and this is in the form of lower payments to physicians who participate with these plans.

So where does that leave things for physicians? Here are four points to consider:

1. Physicians need to know whether they are participating with an exchange plan.

This can usually be readily discovered by looking yourself up on an insurance company's online directory. But don't just trust the data that you find there; double-check by calling the insurance company and verify that you are in fact participating with an exchange plan (there have been many errors on these sites so far).

2. Physicians need to determine what their fee schedule is going to be.

Ask the insurance plan to send you a sample for your specialty or send them your highest utilized codes for pricing.

3. Physicians need to communicate very clearly with patients if they are not in the exchange plans.

Hang posters on your waiting-room walls and get communications out to patients to explain that the insurance company (if this is the case) has decided to exclude you from the exchange product. Many patients wrongly assume that their physician is automatically in the network, so do your best to educate them as soon as possible.

4. Physicians need to quantify the damage.

Take note of the number of patients that you may lose due to their choice of plan and appeal to the insurance company to see if there is a way that you can retain them. If you purposefully opted out of the exchange network then it is unlikely that you can hold onto these patients. But if you were excluded from the network, you may be able to appeal ― in doing so the plan might make an exception and add you in.

If you are participating with an exchange product and you find that you are receiving an influx of these patients, my best advice to you is to set up some very good patient education materials and tools around the most frequently seen chronic conditions, in order to help manage what may be a sicker population of patients. Don't be afraid to look at what the insurance company is offering in terms of chronic-care support. Many have teams of nurses that help to manage the patient's care and do a relatively good job of feeding that information back to the primary-care physician.

Lastly, remember that it is still early. There are going to be a lot of missteps under this new system, on all sides. So I suggest hanging in there to see how things shake out. Like any new program it will take a while to work out the kinks.

Susanne Madden, MBA, is founder and CEO of The Verden Group, a consulting and business intelligence firm that specializes in practice management, physician education, and healthcare policy. She is also COO, National Breastfeeding Center, and cofounder, Patient Centered Solutions. She can be reached at madden@theverdengroup.com or by visiting www.theverdengroup.com.