Increased accuracy in listings should benefit in-network medical laboratories and anatomic pathology groups

Regional and smaller medical laboratories will welcome a new enforcement initiative by the Centers for Medicare & Medicaid Services (CMS). Health insurers now will face fines as high as $25,000 per beneficiary as a sanction from regulators in many states for errors in provider directories that can result in patients receiving surprise out-of-network bills.

As the number of consumers with high-deductible health plans has grown, the demand for more price transparency by physicians, hospitals, and other healthcare providers has increased, with states such as New Hampshire and Colorado legislating public price transparency websites.

Now the federal government is taking another step toward increased transparency in healthcare by fining payers whose provider directories are not current and include inaccurate listings that may cause consumers to unknowingly select out-of-network providers. This is especially important as insurance providers continue to narrow their provider networks. Increased accuracy in provider directories should help clinical laboratories and pathology groups that participate in insurance networks.

Some Health Insurers Don’t Always List Smaller Medical Labs in Their Directories

In fact, in recent years, it has been a regular complaint by some independent medical lab companies and hospital/health system clinical laboratory outreach programs that they are not listed—or are not easy to find—in the provider directories issues by many health insurers. They point out that this puts them at competitive disadvantage to the huge national lab companies, which are consistently listed in these same provider directories.

As of Jan. 1, 2016, CMS can fine insurers as much as $25,000 per beneficiary for inaccurate listings in Medicare Advantage plan directories and up to $100 per beneficiary for errors in directories for plans sold on the federal Obamacare exchanges.

The Wall Street Journal (WSJ) reported that the new CMS rules originally required insurers to verify network provider listings every month, but were revised to quarterly verification after opposition from insurers and doctors.

“You can’t have health reform that’s based on insurance market that are selling standard products and not have the information available to consumers and purchasers,” Gerald Kominski, PhD, Director of the UCLA Center for Health Policy Research in Los Angeles, told Modern Healthcare.

CMS Letter to Insurers Outlines Basis for Fines

CMS announced the upcoming regulations holding insurers accountable for the information in their provider directories in a February 2015 letter to insurers of qualified health plans on the federal marketplace and in another message to insurers that issue Medicare Advantage plans.

“A qualified health plan issuer must publish an up-to-date, accurate, and complete provider directory, including information on which providers are accepting new patients, the provider’s location, contact information, specialty, medical group, and any institutional affiliations, in a manner that is easily accessible,” the letter to Healthcare.gov plans stated. “The general public should be able to easily discern which providers participate in which plan(s) and provider network(s). Further, if the health plan issuer maintains multiple provider networks, the plan(s) and provider network(s) associated with each provider, including the tier in which the provider is included, should be clearly identified on the website and in the provider directory.”

Gerald Kominski, PhD (above), Director of the UCLA Center for Health Policy Research in Los Angeles, told Modern Healthcare that “you can’t have health reform that’s based on insurance markets that are selling standard products and not have the information available to consumers and purchasers.” (Photo copyright: UCLA.)

Consumer Advocacy Groups Push to Improve Accuracy of Provider Directories

Consumer Watchdog, an advocacy group that has filed suit against California insurers for failures in their provider directories, is among the consumer organizations that have pushed for improved accuracy in provider listings.

“It’s the Wild West out there for consumers who are trying to confirm that the plans they choose have the doctors they want,” Carmen Balber, Consumer Watchdog’s Executive Director, told the Wall Street Journal.

Families USA, a nonprofit healthcare advocacy organization, says accurate provider directories are not only important to protect consumers from inadvertently visiting out-of-network providers, but also allow patients to correctly identify providers who meet their language, location, and other needs, and create a true picture of a plan’s network.

“These directories are road maps that help consumers navigate their healthcare options,” Ron Pollack, Executive Director of Families USA, said in a statement. “When the information in a directory is inaccurate, consumers can be sent on a time-wasting journey for the services they need. It can also cost them money if they choose a provider listed in the directory, but who is not actually part of their plan’s network. And then they can get hit with an unexpected and undeserved bill for out-of-network services.”

State Healthcare Marketplaces Rife with Costly Inaccuracies

Families USA outlined the depths of the problem in a 2015 brief, “Improving the Accuracy of Health Insurance Plans’ Provider Directories,” which identified inaccuracies in directories from insurers in several states. For example, fewer than half of the psychiatrists in Maryland’s healthcare marketplace could be reached at the phone numbers listed for them in their provider directories. Of those providers listed as psychiatrists that could be reached, 19% were not actually psychiatrists.

Ron Pollack, Founding Executive Director of Families USA, named by Modern Healthcare as one of the 100 most powerful people in healthcare, says consumers often are “sent on a time-wasting journey” that costs them money if they choose a physician in their insurer’s provider directory who is incorrectly listed as part of their network. “They can get hit with an unexpected and undeserved bill for out-of-network services,” he said. (Photo copyright: healthinsurance.org.)

A 2014 study of provider directories by the California Department of Managed Healthcare on the accuracy of directories by Anthem Blue Cross and Blue Shield of California on Covered California, the state’s Obamacare exchange, also found a high percentage of incorrect listings.

In the Anthem plan, 12.5% of the physicians listed in Anthem’s provider directory had inaccurate locations and 13% of the offices did not accept Anthem’s exchange plans even though they were listed as in network. Blue Shield’s directory was similarly riddled with inaccuracies, with 18.2% of the doctors in the plan directory not located at the address listed and 9% of the doctors unwilling to accept patients who had Blue Shield’s Covered California plans.

A Blue Shield of California spokesman told the Wall Street Journal it had paid more than $38 million in claims adjustments during the past two years, some of which covered surprise out-of-network bills.

“We’ve been very diligent in trying to do the right thing and correct any misunderstandings that have been out there,” he said.

Nonetheless, California, in November 2015, fined Anthem Blue Cross $250,000 and Blue Shield of California $350,000 for overstating their provider directories, the Los Angeles Times reported.

AHIP Passes Some of the Blame for Inaccuracies to Providers

America’s Health Insurance Plans (AHIP), a trade association representing the health insurance industry, argued that providers share in the responsibility for keeping directories accurate.

“Plans are calling doctors’ offices by the day, by the hour, by the minute,” Clare Krusing, Communications Director for AHIP, told the WSJ. She noted, however, “oftentimes providers won’t call the plans back. Accuracy depends on both the provider and the plan being proactive.”

Some Providers, Including Pathologists, Welcome the CMS Policy Change

To consumers, it might seem a simple thing to require health insurers to maintain accurate and up-to-date directories of the providers in their networks. However, some healthcare professionals—include pathologists from smaller pathology groups and clinical laboratories, would assert that many payers simply don’t devote the resources required to maintain accurate provider directories. It is why the actions by CMS will be welcomed by providers and patients alike.
 

—Andrea Downing Peck

Related Information:

Health Insurers to Face Fines for Not Correcting Doctor Directories

Insurers Draw Heat for Error-Riddled Provider Directories

Final 2016 Letter to Issuers in the Federally-Facilitated Marketplaces

Note to Medicare Advantage Organizations, Prescription Drug Plan Sponsors and Other Interested Parties

Improving the Accuracy of Health Insurance Plans’ Provider Directories

Families USA Report Makes Recommendations to Improve Accuracy of Health Insurance Provider Directories

Inaccurate Provider Directories Draw Heat from U.S. Insurance Commissioners, Obama Administration

California Fines Top Health Insurers for Overstating Obamacare Networks