Physicians Key in Narrow Network Pushback

March 9, 2015

Narrow networks have potential negative consequences for physicians who are included or excluded.

As payers try to keep healthcare costs down, many are forming narrower networks that exclude physicians who provide care at higher costs than their peers. These networks have consequences for both included and excluded physicians.

Excluded providers, for instance, may face a smaller pool of potential patients; while included providers may experience financial challenges as the reimbursement rates in these plans tend to be lower than the others.

To counteract the negative effects of narrow networks, physicians must think strategically, said plastic and reconstructive surgeon Robert Pearl, who is chair of the American Medical Group Association's Council of Accountable Physician Practices, a consortium of medical directors from medical groups and health systems across the country seeking to improve healthcare delivery. "If physicians simply react or try to react against the insurance company that's now going to use narrow networks as a negotiating tool with them, they're going to find themselves always on the defensive and never able to be effective," he recently told Physicians Practice.

Pearl, who is also CEO of the Permanente Medical Group in Oakland, Calif., and president and CEO of the Mid-Atlantic Permanente Medical Group, Rockville, Md., said physicians and practices should partner to create high-performing groups that improve care quality while reducing care costs. "... My belief is that physicians need to lead the process of healthcare change, that they need to be the innovators; they need to be the implementers of technological solutions," he said. "So I would encourage physicians to come together and create - whether it's accountable care organizations or whether it's going to be to create some sort of multispecialty medical group, or in some other fashion - to come together to create an alternative to an insurance company-driven narrow network."

If physicians can do this successfully, not only could they create new network opportunities, they could use that as a negotiating tool with payers that are attempting to exclude them from certain networks, said Pearl. "... If they are the premier provider of care in the community, then the insurance company would be hard pressed to exclude them from coverage, and that can lead to increasing the negotiating leverage."

If physicians don't take action now to counteract narrow networks, Pearl fears there could be serious consequences for patient care, especially if payers form these networks primarily based on cost, and not taking into account the quality of patient care physicians provide.

"... I believe strongly that physicians are the best individuals to step forward, they know their patients, they know patient care, they have a commitment to quality," said Pearl. "... I can't think of anyone better to lead that process than physicians. I just think that in many communities they have not stepped forward. In many communities they've been battered down, and I think this is the time for them to come together to create the organizations and to demonstrate what's possible in American healthcare."