Texas state officials concede that network adequacy problems arose when they switched to a new health plan for state employees on Sept. 1. In Wichita Falls, major providers sped through negotiations with Blue Cross and Blue Shield of Texas — selected in competitive bidding as the new third party administrator (TPA) for the Employees Retirement System (ERS) of Texas’s self-funded plans. That helped to avert major disruption to plan members there. But it wasn’t as smooth elsewhere. Some plan enrollees, especially in Amarillo and other parts of the state’s panhandle, immediately found it difficult to find in-network providers, according to local media reports. As of mid-October, ERS told AIS Health it is still working to rectify the situation.
ERS is “aware, and issues in the networking process are getting resolved,” Mary Jane Wardlow, the state system’s spokesperson, told AIS Health on Oct. 11. The next day Wardlow said ERS is involved in “regular communications” with the Texas Blues insurer. Network negotiations are ongoing with providers, she said, “and the network continues to build, closing gaps.”
According to ERS, its board of trustees selected the Texas Blues insurer, which is part of Health Care Service Corp., as plan administrator for HealthSelect of Texas and Consumer Directed HealthSelect of Texas for a six-year contract with administrative services beginning Sept. 1. The plans cover 400,000-plus participants, including employees and retirees of state agencies and certain higher education institutions, along with their dependents.
Under the agreement, ERS manages the contract and is responsible for determining eligibility and enrollment for the plans. Also, ERS establishes the plan design, setting copays, coinsurance and deductibles. The TPA’s functions include processing claims and managing the provider network. According to state officials, administration has accounted for about 3% of overall HealthSelect costs, compared to an average of about 12% for similar private-sector health plans.
Members Can Use PCP Contingency Plan
The Texas Blues insurer did not respond to requests for information on network adequacy issues by HPW‘s press time. But ERS’s Wardlow offered further details on how the state is handling the situation.
“We have a PCP [i.e., primary care physician] contingency plan in place for [the Texas Blues’] HealthSelect members through the end of the year and transition of care benefits that can address some issues,” Wardlow said.
Under the contingency plan, members can request network gap exceptions that will allow out-of-network providers to be treated as in-network if they live more than 30 miles from an in-network PCP, or more than 75 miles from a specialist, Wardlow said.
On transition of care, she said, “participants who are receiving care for a chronic illness or an acute medical condition, or pregnant and in [the] second or third trimester may be able to continue to receive in network health care services from their current provider for a certain period after Sept. 1, 2017, even if [the] provider will no longer be in the HealthSelect network. To access this, they need to fill out a Transition of Care form and submit it to BCBS.”
Prior to Sept. 1, UnitedHealthcare had held the TPA contract for Texas state employees since 2012, and the Texas Blues plan held it for a number of years prior to that. The Texas Blues plan and United were the only two companies that submitted proposals for the new TPA contract by the August 2016 deadline, Wardlow noted.
Texas Blues HMO Uses ‘Large Group’ Network
When the recent transition from United back to Blues coverage was announced by the state, ERS officials touted Blue Cross and Blue Shield of Texas’s HealthSelect network as having “more than 58,000 providers, with more doctors, hospitals and other facilities added every day.”
Yet Kelly Fristoe, owner of an insurance agency, Financial Partners, in Wichita Falls, Texas, tells AIS Health there was a fundamental flaw in the network’s set-up.
“Blue Cross rolled out Sept. 1 and the rural markets did not have adequate network providers,” says Fristoe, a past president of the Texas Association of Health Underwriters. “Houston, Dallas [and other major urban areas] had networks because they had large groups and this is a large-group network….It is not the same network as for small group and individual plans, which use the Blue Advantage network….It’s across the board: primary care, specialists and hospital systems.”
Fristoe, who serves on the board of United Regional Health Care System in Wichita Falls, says that it, as the region’s major hospital-based system, was not a part of the Blues’ provider network for ERS enrollees. “They got in the network on Sept. 1 [the official start date] at about 1 or 2 p.m. and backdated it to midnight,” he says.
According to Fristoe, people in ERS’s health plans “tend to be higher wage earners than people buying subsidized exchange coverage. The president of the college and university, the high wage earner, sees the hospital won’t be in the network…so the hospital system started jumping through hoops — a little more aggressively than when networks were negotiated for individuals and small groups last year.”
Fristoe explained that both Wichita Falls’ major hospital system and a major physician clinic comprised of 30 to 40 primary care doctors and specialists signed the ERS HMO agreement with Texas Blue Cross and Blue Shield within several weeks. “Negotiations happened very quickly between Blue Cross and these providers,” he said. He estimated the ERS contract has around 6,000 covered lives in the region.
By contrast, last year the Texas Blues insurer’s Blue Advantage HMO provider contracts “took a very long time” to negotiate, and in the meantime individuals didn’t have a Blues PPO option, he said. Thus, while provider-insurer negotiations continued, individuals and small groups throughout the Wichita Falls service area — roughly 12,000 to 15,000 people in 2016 — had to buy HMO coverage, and all of them could go only to the federally qualified community health center (FQHC) and its four doctors in the HMO network.
It took “an entire year, until December 2016 [for the region’s major providers to sign the Blues’ HMO contracts], allowing more access to doctors and the local hospital system,” Fristoe said. “But this large-group HMO agreement was negotiated in a much quicker time.”
Fristoe describes a Texas health insurance market in which PPOs are getting expensive and employers are shifting to HMOs. “We’re seeing about 30% of our employers choosing now to offer their employees an HMO plan,” he said. Enrollment is expected to rise to 20,000 to 25,000 in HMOs in the small group and individual market in the Wichita Falls region for 2018, he said.
Centers of excellence, including the University of Texas M.D. Anderson Cancer Center in Houston, do not participate in the HMO network, Fristoe said. “If you want access to those providers, you need to buy a PPO plan, only available in the large- and small-group market,” he said.