Rights of Physicians and Patients as Insurers Move to Narrow Networks

Andrew B. Wachler, Esq. and Dustin T. Wachler, Esq.

Over the past six months, healthcare providers in Michigan and across the country have experienced high volumes of terminations and nonrenewals from various insurance plans’ provider networks. The network exclusions are without cause, and are part of a nationwide move by insurance plans towards “narrow networks.” Narrow networks are defined as insurance plans that limit the providers available to plan subscribers, which proponents claim allows networks to control costs and allow for higher quality, better coordinated care.

Although the Affordable Care Act did not create narrow networks, the reform law accelerated the trend by limiting insurers’ ability to continually lower benefits and exclude unhealthy individuals. Without other ways to compete, insurance companies believe that limiting provider choice is the insurers’ best way to lower premiums and thus compete in the new insurance exchanges.

Provider and patient groups, however, contend that narrow networks will limit patients’ access to care, and disrupt longstanding physician-patient relationships, emergency department care and referral networks. In most cases, patients select insurance plans based on the plan’s access to a specific provider network. Patients subscribe and re-subscribe to one-year commitments with the primary intent to be treated by their long-term primary care physician. Now, without notice or the ability to switch their insurance plan, their physicians are suddenly out-of-network and thus cost-prohibitive.

For physicians, a termination or nonrenewal from a single insurance plan can be career threatening. Physicians facing terminations and nonrenewals will lose critical access to patient groups and referral relationships developed throughout their career. Further, physicians often switch patients to the managed care network that they participate in, and will now lose groups of patients that enrolled in the plan solely due to the physician’s pre-existing physician-patient relationships with those patients.

In Michigan, the vast majority of recent network exclusions have occurred in UnitedHealthcare’s Medicaid, MIChild, and Medicare Advantage plans. UnitedHealthcare’s move to a narrow network occurs at a complex time in the healthcare regulatory landscape. A recent report demonstrates that Michigan Medicaid enrollment increased by over 300,000 beneficiaries since April 2014. Despite the fact that UnitedHealthcare is limiting access to care as the need for Michigan Medicaid providers is growing, UnitedHealthcare’s ability to limit its provider network is not the primary issue. Instead, the real issue is that the manner in which UnitedHealthcare is effectuating its narrow network eliminates patients’ rights to choice of provider by requiring patients to stay in the plan until their anniversary date, despite the fact that they enrolled in UnitedHealthcare’s with the intent to be treated by their long-term primary care physicians. UnitedHealthcare has thus made a unilateral business decision to effectuate a narrow network without regard to the contractual and legal rights of the physicians and their patients, and without regard for their patients’ health care concerns and their longstanding physician-patient relationships.

Michigan providers facing Terminations Without Cause and Nonrenewals from UnitedHealthcare are granted a limited appeal right via their participation agreements. The appeal process, however, is limited to a review by a UnitedHealthcare panel to determine whether UnitedHealthcare acted in accordance with the provisions of their participation agreements. Accordingly, although an appeal must be filed in order to protect the providers’ appeal rights, the appeal itself may not be effective and providers must look to alternate methods in order to protect physician and patient rights. Our firm has contacted the Michigan Department of Community Health (DCH) as well as representatives from the State’s Attorney General office in order to work to achieve solution that either provides a meaningful appeal process or reinstates patients’ rights to choice of provider.

In our opinion, Michigan insurance plans’ contractual and legal obligations extend beyond the providers’ participation agreements. For example, we have reviewed the Health Plan Contract (“Contract”) entered into by the State of Michigan and UnitedHealthcare that dictates UnitedHealthcare’s obligations in operating their Medicaid managed care and MIChild plans. The Contract, as well as all applicable Medicaid laws, regulations and policies, serve to define the legal relationship between the State of Michigan, UnitedHealthcare, Medicaid providers, and Medicaid enrollees. The Contract includes provisions regarding network adequacy, network changes, and the enrollee’s right to choice to primary care physicians. Specifically, the Contract includes language stating “[Plans] must make all efforts to honor the enrollee’s choice of Primary Care Physician” and that “if [the Plan] cannot honor the enrollee’s choice of Primary Care Physician, [the Plan] must allow the enrollee to either make a choice of an alternative Primary Care Physician or to disenroll.” In addition to the Contract, we are examining provider and patient rights under Michigan’s Medicaid State Plan, which includes, for example, Section 4.10 covering enrollees’ rights to free choice of provider.

Our position is that UnitedHealthcare must comply with these authorities when effectuating their narrow network, and cannot extinguish the enrollees’ right to choose their primary care physicians. We are challenging UnitedHealthcare’s actions of inducing patients to sign-up for a specific plan in order to see their primary care physicians, and then excluding those physicians in a way that prohibits the enrollees from being treated by their long-term primary care providers.

We also believe that providers have additional appeal rights, including the right to a State Fair Hearing and the negotiation and arbitration procedures described in their participation agreements. Separately, we are challenging the exclusions on behalf of patients and preparing for hearings to protect the patients’ rights to keep their primary care providers. Physicians and patients should continue to strive for what we believe is a fundamental right – the right of patients to maintain their longstanding physician-patient relationships – until they obtain a result that adequately complies with patients’ and physicians’ rights under the contracts and other applicable authorities.