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San Francisco Marin Medical Society Blog

California Health Benefit Exchange Adopts Solicitation Regulations; Network Adequacy Remains a Concern

After months of tweaking, the California Health Benefit Exchange has formally adopted the solicitation regulations for plans hoping to be included in the exchange.

The action comes more than three months after the board adopted a set of solicitation guidelines that had been vetted by various stakeholders. Adoption of the solicitation itself was then postponed last month to allow additional study and comment on specific provisions of the solicitation.

From a physician standpoint, several aspects of the solicitation regulations have improved since first being released back in August; however, major areas of concern still exist.

The most notable problem continues to be questions over whether network adequacy will be effectively monitored and enforced under the dual regulator system favored by the exchange. The current regulation, which includes the solicitation, calls for the Department of Managed Health Care (DMHC) and Department of Insurance (DOI) to monitor network adequacy, effectively keeping today’s status quo in place.

As many stakeholders, including the SFMS/CMA, have noted, DMHC and DOI have struggled to ensure adequate networks are maintained by payors, and it’s highly likely that the problem will only increase when a flood of exchange plans are added to their workload in 2013 and 2014.

Further compounding these network monitoring and enforcement concerns is the exchange’s decision to allow two-tier networks for essentially all exchange plans, as it is unclear whether DMHC and DOI even have the capability to assess the adequacy of individual tiers within a network. This could lead to a situation where enrollees have inadequate access to providers at a lower level of patient cost-sharing. SFMS/CMA has vigorously opposed this decision by the exchange.

These concerns were raised, once again, during the public comment period of the exchange’s most recent meeting, but it remains to be seen whether the board will take these comments to heart.

Peter Lee, the exchange’s executive director, noted that the monitoring of network adequacy would be an issue that continues to evolve into the first year of the exchange’s operation, along with a host of other elements related to plan design standardization, such as the specific levels of patient cost-sharing that will be permitted in the exchange.

To date, however, the exchange has been mum in regard to the host of questions and concerns raised about the issue of network adequacy and two-tier networks, and it remains to be seen whether that stance will change in the future.

Another issue of concern included in the finalized solicitation regulations is that the exchange is now backing away from its adopted recommendation to use the FAIR Health database as a tool for standardizing out-of-network benefits. This apparent about-face poses considerable concern to physicians, as it is unclear what direction they will pursue on standardizing out-of-network benefits.

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