State rules Anthem cannot force customers into new plan

Posted Oct. 05, 2013, at 7:16 a.m.
Eric Cioppa
Eric Cioppa

LEWISTON, Maine — Central Maine Healthcare has won.

On Friday evening, Superintendent of Insurance Eric Cioppa released his ruling that Anthem Blue Cross and Blue Shield cannot force its individual policyholders into a narrow network insurance plan that would exclude Central Maine Medical Center and its partner hospitals and affiliated providers.

According to a 25-page decision released late Friday, Anthem’s proposal was not in the best interests of its existing policyholders in southern and western Maine — including Androscoggin, Franklin and Oxford counties — because it took away patient choice.

Anthem will have to redraft and present an alternative plan for approval, which the state has required it do promptly to provide its grandfathered individual policyholders with coverage compliant with the Affordable Care Act by the Jan. 1 start date.

In April, Anthem Blue Cross and Blue Shield submitted a controversial proposal to the Maine Bureau of Insurance for approval to discontinue its nongrandfathered individual health plans and to move a number of its individual policyholders into a narrow network plan that would have strictly limited which hospitals and doctors these patients could use for regular, non-emergency care.

In central Maine, Central Maine Medical Center in Lewiston, Bridgton Hospital, Rumford Hospital and Parkview Adventist Medical Center in Brunswick would have been excluded from that plan, except in cases of patients seeking emergency care. St. Mary’s Regional Medical Center in Lewiston, Franklin Memorial Hospital in Farmington, Mid Coast Hospital in Brunswick and Stephens Memorial Hospital in Norway would have been included.

CMHC officials, patients and local lawmakers fought the plan.

Hundreds attended a public hearing in Auburn on Aug. 29 — one of four held across the state — and ripped the proposal for increasing drive times, forcing patients to abandon long-term patient-doctor relationships, increasing waits, risking the loss of local jobs and taking away choice.

Chuck Gill, vice president for public affairs at Central Maine Healthcare, said CMHC “really appreciates the humanity of Superintendent Cioppa. He took the time to carefully listen to people.” And, Gill said, in the end Cioppa “made a decision that was in the best interests of patients.”

“We also extend our appreciation and gratitude to people of this community who took time out of their busy day” to attend public comment sessions and speak up, he said, to make the state realize that insurance companies “can’t get between patients and their doctors. That’s bad. And this decision shows that.”

In making his decision, the superintendent focused on several points, including that, under Anthem’s proposal, renewing policyholders “would lose their existing contractual right to elect out-of-network care,” significantly restricting patient choice. The commissioner noted that the number of subscribers who would be directly affected by this would be small but “hardly negligible.”

The state estimated that number to be 489, or 6.8 percent of grandfathered policyholders.

Under Anthem’s proposal, patients’ right to out-of-network coverage “is taken away completely,” and “their choice of network providers would be significantly restricted,” according to the decision.

It focused considerable attention on the price of the proposed network coverage. Anthem had argued that prices would be competitive, but that policyholders would be compelled to buy at certain prices in order to control costs. Those savings, the state ruled, “would not be worth the cost of depriving consumers of the right to decide for themselves” what they wanted to buy.

“The best way to decide whether a product is a good deal for the price is to make it available in the free market alongside competing products and let the buyers choose,” Cioppa wrote.

“This principle is especially true when Anthem’s proposed replacement product limits policyholders’ benefits in ways that may not be immediately apparent to those policyholders” until they have to use their insurance and become familiar with its benefits and limitations, he wrote.

Instead, according to Cioppa, their interests are best served by allowing them to choose to purchase a narrow network plan, such as the one proposed by Anthem, rather than requiring them to participate and then opt out, “especially if the only way to opt out is to choose coverage from another carrier.”

In its application, Anthem argued that allowing its renewing subscribers to enroll in different plans would “jeopardize discounts it had negotiated with hospitals in the limited network, who agreed to lower reimbursement rates in return for Anthem providing them with increased patient volume.”

Cioppa wrote that Anthem’s assertion put him in the position of choosing “between protecting the interests of a minority of policyholders … and protecting the interest of all subscribers in mitigating the price shock that will result from the federally required shift to more expensive levels of coverage.”

He said he was not persuaded by Anthem’s arguments that it could not sustain the negotiated discounts without moving these individual policyholders to its narrow network.

Since Cioppa has ruled that Anthem cannot replace the grandfathered individual policyholders’ current coverage with the proposed narrow network plan, Anthem now has two choices to become compliant with ACA: Submit an alternative proposal for ACA-compliant replacement policies or modify current policies as permitted by the ACA.

Cioppa suggested it would be easier, and faster, to modify current policies given the ACA’s approaching Jan. 1 start date. He noted that he is “prepared to approve a proposed modification of coverage” that is narrowly tailored to conform to ACA requirements.

The superintendent, making note of the consumers’ confusion he witnessed at public hearings, has also required Anthem — once its replacement plan meets state approval — to send letters to all affected subscribers with detailed information about the changes, how to access the federal marketplace as an option to the Anthem plan and information about federal subsidies that might be available to help pay for insurance coverage. The Bureau of Insurance must approve the wording in that letter before it is sent to consumers.

Although Cioppa denied much of Anthem’s plan, he did approve the company’s proposal to make some formulary — lists of medications — changes to policies because the changes result in significant cost savings, and also because the changes are permitted by the ACA, are consistent with Anthem’s other products and were not called into question by any member of the public who testified regarding Anthem’s proposal.

The superintendent also approved Anthem’s proposal to move policyholders in six northern and eastern Maine counties to a broad network, known as a guided-access point-of-service plan, or POS, that the bureau determined was in the best interest of policyholders there.

Anthem can appeal the state’s decision through the Superior Court within 30 days. Others whose interests are affected by Cioppa’s decision have 40 days to appeal.

An email and phone call to Anthem seeking comment after the decision’s 5:30 p.m. release were not returned.

 

Similar articles:

ADVERTISEMENT | Grow your business
ADVERTISEMENT | Grow your business