Plans offered through the state and federal health insurance exchanges are not the only place narrow networks are cropping up.
The plans found in the federal and state health insurance exchanges are not the only place narrow networks are cropping up, and cost is not the only factor that determines who is included.
Here are three other types of narrow networks:
Patient-Centered Medical Homes. Some payers are funneling patients into smaller networks by incentivizing them to visit certain practices, such as those that have achieved recognition as medical homes, says healthcare consultant Susanne Madden. "... The insurance companies have sort of identified who is a Patient-Centered Medical Home and they've got a narrow network in terms of having different sets of benefits for those [patients] that access Patient-Centered Medical Homes," she says.
Performance "tiering." Many payers are using "tiering" based on performance to form narrow networks and/or to encourage patients to use a smaller pool of providers. For instance, one payer might use "stars" to identify providers who perform better on cost and quality. "Depending on the patient's benefits, it may be more expensive for them to see a doctor who has only one star or no stars," says Madden. "So that's sort of creating a sort of 'organic tiering' if you will, because then you have patients that are really selecting doctors based on what tier they fall in, based on their own benefit design."
Hospital networks. Narrow networks are also being formed on the hospital side of things, says Madden. "... If we step away from the commercial insurance companies for a minute and we look at hospital systems for example, that are also providing the insurance - so they are both the provider and the insurer - they have their own narrow networks as well because what they are really doing is limiting the ability of physicians to provide care to patients that are sort of within their own organization," she says. "So, for example, they may or may not contract with doctors that are not part of that hospital system, so you have another sort of narrow network occurring at the hospital level where those hospitals are also the provider and insurer."