California law would increase oversight of narrow networks

Efforts by payors to lower the cost of healthcare have fueled the growth of insurance plans that feature narrow provider networks, which came under attack this year in California where many narrow-network products are offered on that state’s health insurance exchange (HIE).

The bill would require payors to file annual reports with data on network adequacy to the California Department of Managed Health Care (DMHC); healthcare plans that provide service to Medi-Cal beneficiaries would report their data to the State Department of health Services.

Authored by Sen Hernandez (D-) and sponsored by Health Access California, the bill was passed by both houses and awaits Gov. Jerry Brown’s signature. If passed, the DMHC would be charged with developing regulations to ensure that enrollees have access to health services in a timely manner. Indicators for timeliness would be developed for the following:

• wait times for appointments with primary care and specialty physicians,

• timeliness of care in an episode of illness, and

• wait times to speak with a physician, nurse or the qualified professional.

Existing law already requires that payors report annually on compliance with existing standards to DMHC, and managed care plans providing services to Medi-Cal beneficiaries must submit to annual audits. Plans that provide services to Medi-Cal beneficiaries exclusively can be exempt under certain circumstances. The new legislation would eliminate that exemption.

According to an article on the Modern Healthcare website, Anthony Wright, executive director of Health Access California, said network adequacy for both Medi-Cal managed care plans and private plans have long been in question.

“We thought it was crucial that there be scrutiny that people, once covered, have access to the care that they were promised,” Wright told Modern Healthcare. “The conversation around Covered California narrow networks only made that more urgent.”

Anthem Blue Cross and Blue Shield of California, which attracted 60 percent of consumers who enrolled for health insurance on Covered California, both have lawsuits pending against them that allege they misled consumers, according to the report.