Patients in western and southern Maine will lose access to local doctors and hospitals under a “backroom deal” between MaineHealth and the state’s largest health insurer, according to an executive at another health system excluded from the arrangement.
The deal could affect tens of thousands of Maine residents and greatly shape a key component of President Barack Obama’s health reform law in Maine, one consumer advocate said.
MaineHealth, the parent organization of Maine Medical Center in Portland, has partnered with Anthem Blue Cross and Blue Shield to offer a new insurance product on Maine’s health insurance exchange, an online market where consumers and small businesses can buy coverage beginning next October. The exchanges are a key component of the reform law, which aims to widen coverage to 30 million people.
By excluding hospitals from the new insurance plans that compete with MaineHealth, Anthem and MaineHealth are undermining the intent of the reform law to improve access to affordable health care, said Chuck Gill, vice president for public affairs at Central Maine Healthcare.
Central Maine Healthcare’s hospitals — Central Maine Medical Center in Lewiston, Bridgton Hospital and Rumford Hospital — were excluded from the proposed network of providers that would serve patients who sign up for the new plans, he said.
“The only common thread is that the people who are excluded are the people who compete with MaineHealth or their affiliates,” Gill said.
MaineHealth serves much of southern and western Maine, with nine member hospitals and affiliate hospitals in Augusta, Brunswick and Lewiston.
Central Maine Healthcare has learned through conversations with other hospitals that Mercy Hospital in Portland, York Hospital and Parkview Adventist Medical Center in Brunswick also were left out of the proposed network, Gill said.
Susan Rouillard, a spokeswoman for Mercy Hospital, confirmed that Anthem has not approached the hospital about participating in the provider network for the new plan.
“While we need to learn more about this particular effort, we are understandably concerned about any initiative that could unnecessarily limit choices for patients,” Rouillard said in a statement sent to the BDN on May 6.
Choice in health care benefits consumers by leading to better quality and containing costs, she said.
Representatives from York Hospital and Parkview Adventist did not respond to repeated requests for comment.
Gill said multiple sources have informed Central Maine Healthcare that MaineHealth developed the provider network and approached Anthem to adopt it.
“This is a purely competitive move by MaineHealth,” he said. “If this is allowed to stand, the losers will be Maine residents and small businesses.”
With 17,000 customers, Anthem is the largest health insurer in Maine’s individual market, which includes people who purchase their own insurance. In the small group market — businesses with fewer than 50 employees that provide coverage to their workers — the company insures about 33,000 people in Maine.
Most Mainers with private health insurance are covered though a large employer.
Anthem has filed preliminary paperwork for the new insurance product with the Maine Bureau of Insurance and more materials are expected, said Doug Dunbar, a spokesman for the bureau.
In a joint statement, Anthem and MaineHealth noted that the filing remains in the early stages. The two organizations are working to “develop an innovative collaboration” designed to reduce health care costs and slow the rate of premium increases, the statement said.
“The insurance product currently under development and subject to regulatory review will enable consumers to have access to a select group of hospitals and providers in Maine,” the statement said. “The collaboration’s primary goal is to offer a product that complies with the requirements of the Affordable Care Act while at the same time presenting the most affordable plan possible.”
The plans would take effect Jan. 1, 2014, as would other health plans offered on Maine’s health insurance exchange, which will be run by the federal government.
Anthem spokesman Chris Dugan declined to comment on which providers are included in the network, how the network was developed, or the pricing of the new product.
“We hope to share additional details on the program in the very near future,” the joint statement said.
Anthem and MaineHealth have also partnered to form an accountable care organization.
According to a letter Anthem filed with the insurance bureau, the new health plans would be served by two provider networks, one in northern Maine that would include all hospitals in the area and another in southern Maine that would include 14 out of 21 hospitals. The letter indicates that an attached document lists the participating hospitals, but Anthem requested that the document be kept confidential and it was not released.
“It is important to note that the southern network will include at least one hospital in each of the southern counties (excluding Sagadahoc, which does not have a hospital),” the letter states.
Pricing for the new plans was included in another confidential attachment that also was not released.
Hospitals in the southern counties agreed to double-digit rate reductions from Anthem with the expectation that higher patient volumes will offset any resulting losses, the letter states.
“This is critically important in offsetting the premium increases” associated with the Affordable Care Act, the national health reform law, the letter states.
A number of insurance carriers nationally have turned to narrow network plans, contending that limiting network size allows them to offer plans with better quality or more efficient doctors and hospitals, which could dampen spending or improve care.
In addition to future Anthem customers, existing customers would be affected by introduction of the new plans. Anthem requested permission from the bureau to cancel or stop renewing its “non-grandfathered” individual and small group policies and replace them with the new “narrow network” policies.
Maine law requires Anthem to inform its customers about changes to their plans, including the benefits, which providers are in the network, and any incentives offered to doctors and hospitals, said Joe Ditre, executive director of the advocacy group Consumers for Affordable Health Care.
“The major concern for consumers is what’s in the proposal and will it be made public?” he said. “The proponents are claiming confidentiality but the law requires that the superintendent determine that this proposal be in the best interest of policyholders.”
The state insurance bureau will make a recommendation on the filing to the federal government, which will issue the final decision about whether the product qualifies to be offered on the exchange, Dunbar said. Maine law requires that insurance plans provide “reasonable” access to health care services, he said.
Magnifying the impact of the move by Anthem and MaineHealth is the fact that only Anthem and a small startup nonprofit, Maine Community Health Options, plan to offer products on Maine’s exchange next year. The deadline to submit plans for federally run exchanges was last Friday and no other carriers did so, according to the insurance bureau.
That also means that insurers in other New England states, which many hoped would choose to sell plans on Maine’s exchange, have opted out, at least for the first year.
If approved by regulators, the new plan will prove detrimental to patients and small businesses, Gill said. Mainers living in Rumford, Bridgton, Fryeburg and many other western Maine communities would have to leave town to get a primary care doctor because local physicians employed by Rumford Hospital aren’t included in the Anthem exchange plan, he said.
Patients in several southern and western Maine counties may have to change doctors and hospitals while others may forgo care if they have to travel too far, Gill said.
Local businesses couldn’t encourage employees to buy the Anthem product since it doesn’t include many local providers, which could hurt small employers’ competitiveness, he said.
David Clough, state director for the National Federation of Independent Business, said freedom of choice in health insurance is valuable to policyholders who are small-business owners.
“But what often overrides that is price,” he said. “The big word: Affordability. It comes down to how much freedom of choice can you afford? If it’s a very competitive price it will get some attention.”
Anthem’s market research of approximately 55,000 consumers found that most would be willing to give up access to broad provider networks for a lower premium on plans offered through an exchange, the company’s letter to the insurance bureau states. While “narrow network” plans are new to Maine, Anthem has similar products in several other states and plans to offer them in New Hampshire and Connecticut, the letter said.
Gill also criticized the move by Anthem and MaineHealth as an affront to taxpayers. The exchanges will offer federally subsidized private health insurance to working families that qualify for assistance. Anthem may be a private company, but the products it sells on Maine’s exchange will be partially financed by taxpayers, Gill said.
“The Affordable Care Act actually is all about taking the veil and secrecy out of comparing, apples to apples, these health plans,” Ditre said. “You can compare the prices, you can compare the coverage, you can compare who’s in and out of the networks. It’s all about transparency, the exact opposite of what they’re proposing here.”
Gill also faulted Anthem for failing to take into account hospital cost and quality criteria, in which his system’s hospitals perform well, he said. Insurers in other states have relied on such criteria in devising narrow network plans.
BDN Business Editor Whit Richardson contributed to this report.