Centene Corp.’s subsidiary in Washington state recently reached an agreement with state regulators after a tussle over network adequacy issues that temporarily closed its Affordable Care Act (ACA) marketplace plans to enrollment.

This occurred during the peak of the 2018 open enrollment period and, according to an industry expert, may be the first enforcement action taken by state regulators against an ACA marketplace health plan for provider network problems. He asserts it could portend further state regulatory action on this issue next year for Medicare and Medicaid plans as well as exchange plans.

“The state acted at a time when many regulators, due to a lack of insurer participation in the Obamacare exchanges, may be reluctant to take actions that would remove options from the marketplace, and despite the state’s previous determination that the insurer in question had met network adequacy standards before it began selling plans to consumers,” Michael Adelberg, a principal with Faegre Baker Daniels Consulting in Washington, D.C., said in a Dec. 19 blog about Centene’s situation in Washington state.

St. Louis-based Centene, the nation’s largest Medicaid managed care organization, has long touted its exchange involvement as furthering its efforts to ensure coverage for vulnerable populations. Centene is entering three new exchange states for 2018 — Kansas, Missouri and Nebraska — and, upon the close of its $3.75 billion deal to acquire Fidelis Care, New York’s largest Medicaid managed care plan, intends to offer exchange products in New York state.

On Dec. 15, the Washington state Office of the Insurance Commissioner (OIC) said Centene’s Coordinated Care Corp. subsidiary agreed to a consent order, which details the steps that the company must take “to fix its provider network deficiencies and other ongoing issues.” Centene’s unit was fined $1.5 million with $1 million suspended, pending no further violations over the next two years.

Three days earlier, Mike Kreidler (D), Washington state’s insurance commissioner, had issued a cease and desist order forcing the company to stop selling individual health plans in Washington state because it failed to maintain an adequate provider network. The state’s Dec. 15 consent order cancels its Dec. 12 order instructing Centene’s subsidiary to halt all sales.

Specifically, state insurance regulators said Coordinated Care “admitted to not having enough anesthesiologists in King, Snohomish, Pierce and Spokane counties.” Regulators added that, according to the company’s own data, Coordinated Care’s network “is also seriously deficient in other categories of providers, including immunology, dermatology, and rheumatology.”

According to state officials, Coordinated Care has the third-largest market share in Washington’s exchange: 38,000 enrollees as of September 2017. Nationwide, Centene covers just over 1 million exchange members, and the company attributed its strong third-quarter financial performance, and total revenues rising about 10% year-over-year to $11.9 billion, as being partly attributable to ACA marketplace growth.

The state’s OIC said it got 140-plus complaints from Coordinated Care enrollees this year “who have had difficulty with their coverage. This included accessing in-network providers and receiving surprise medical bills.” The state said that, while investigating consumer complaints, regulators began working with Coordinated Care in mid-May and told the company to correct its network and ensure that people are not wrongly charged for covered services.

Kreidler said Centene’s unit understands the seriousness of the violations, has committed to correcting them, and will be monitored closely as it does so.

n Dec. 15, Centene also announced that Coordinated Care, which has been in “active discussions” with the OIC “for some time,” finalized the terms of an agreement on the subsidiary’s Ambetter product and was again accepting enrollment.

“We will continue to work closely with the OIC, including continuing to make refinements and improvements to our network reporting processes. We are committed to address known issues in our network in select regions of the state, and we have taken actions to ensure our members have access to these services,” Centene said in a statement.

Coordinated Care’s Ambetter exchange plan “continues to grow its network and add providers. Many of the counties Ambetter serves are rural counties, which may not have all specialists located within those counties; however, our members can access these specialists located elsewhere within our network footprint,” Centene said. “We have over 15,000 providers in-network, statewide, representing all specialties, including 40 hospitals.”

In his recent blog, Adelberg, a former senior official in CMS’s Center for Consumer Information and Insurance Oversight (CCIIO), put the Washington state insurance commissioner’s action against Centene’s subsidiary into broader context. He noted that recent federal analysis of federally facilitated ACA exchanges “suggests that the majority of plans did not meet at least one provider network standard in 2016.”

Adelberg also cited an unnamed Florida health plan agreeing to a $15 million payment earlier in 2017 “in order to settle a whistleblower allegation that it had exaggerated the size of its Medicare Advantage provider network in regulatory filings.”

In addition, he said, other insurance departments in states including Connecticut, Illinois, Maryland and Nevada, “are implementing laws or regulations to tighten the state’s oversight of provider networks.” What’s more, he said, “several state Medicaid offices are moving toward implementing new quantitative provider network standards.”

The upshot? “All of this suggests that 2018 could be a year of unprecedented provider network oversight from state regulators,” Adelberg said.

by Judy Packer-Tursman

Adapted from the 12/25/17 issue of AIS’s Health Plan Week

Published by AIS Health
© 2017 Managed Markets Insight & Technology, LLC. All Rights Reserved.