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Seattle Hospital Sues State Over Exclusion From Exchange Plan Networks

By Amy Snow Landa, Seattle Times

October 7th, 2013, 8:57 AM

This story was produced in partnership with

Seattle Children’s Hospital filed suit Friday over the state Office of the Insurance Commissioner’s “failure to ensure adequate network coverage” in several of the health plans sold on the state’s new online insurance marketplace, called Washington Healthplanfinder.

Most health plans now being sold through the state’s new health-insurance exchange do not include Seattle Children’s as an in-network provider. As a result, families that enroll in those plans could face significantly higher cost-sharing if they seek care at Children’s than if they seek care at the plans’ preferred providers.

The higher cost-sharing could seriously disrupt care for families currently receiving services at Children’s and could delay new patients from getting the specialized care they need, said Dr. Sandy Melzer, the hospital’s senior vice president and chief strategy officer.

Melzer said parents may be enrolling in health plans through the exchange without realizing that Children’s is not included in the plan’s network.

“The notion that a major insurance plan is going to exclude us from their network is truly precedent-setting and represents a new level of degradation in children’s access to care,” Melzer said.

Of the seven insurers offering plans in King County, only two – Group Health Cooperative and Community Health Plan of Washington – are offering plans through the exchange that include Seattle Children’s in their network.

The five in King County that do not include Children’s in their network are Premera Blue Cross, LifeWise Health Plan of Washington (a subsidiary of Premera), BridgeSpan (a subsidiary of Regence Blue Shield), Molina Healthcare and Coordinated Care.

Kaiser Foundation Health Plan of Washington, which is offering plans only in Clark and Cowlitz counties, also does not include Seattle Children’s in its network.

Children’s is asking that the OIC reverse its decision to allow Molina and Coordinated Care to sell plans on the exchange as long they do not include the hospital in their networks.

OIC spokeswoman Stephanie Marquis says the OIC takes concerns about access to care seriously. “We are reviewing Children’s petition to see what lies at the heart of their concerns and will see how it gets resolved through the legal process,” she said.

4 Responses to “Seattle Hospital Sues State Over Exclusion From Exchange Plan Networks”

  1. Lena Coonway, Group Insurance Underwriter says:

    For years, big companies purchased health plans for their employees from the big carriers whose in-network providers were in great numbers and in many locations. The easy access to an in-network provider and having many to choose from were a big sell. Members often found their preferred health care provider were all in the network.

    ACA will be much more successful if exchanges are required to have a wide in-network to serve the members. Most members back away from health plans when they only have a very limited number of providers and hospitals to choose from, especially when their own physicians are no on the in-network provider list.

    Insurers (and now exchanges) often provide lower cost health plans if they limit in-network access to more expensive provider groups and hospital. In many cases, the best doctors and hospitals are excluded to save money, therefore, they could lower their premium for the same plan.

    If ACA is meant to provide equal opportunity for all to have health insurance, it must also include all provider groups and hospitals to be part of the network, and not allow insurers or exchanges to dictate where members must go to get care for the cost to be covered under their in-network plan. Otherwise, this creates an inequality of real quality care for all. The loophole of insurers allow very limited access to care in order for the premium to be more affordable also limit the best quality care that members deserve. This loophole must be closed to ensure equal opportunity quality care for all. This will provide more incentives for hospitals and provider groups to work with the insurers to provide high quality care with efficiency that will lower the cost of care. ACA must go the extra mile to make this happen or the insurers and exchanges will soon discourage members and lead to the failure of ACA.

  2. killroy71 says:

    Yes, insurers historically have had very broad networks to capture more members – and then those members complained about the cost of coverage. Now, people will see very clearly for themselves the difference in cost from one facility to another. They will have options – choose the high-priced spread, or the bargain that 99 percent of the time will work just as well. What happened when California public employees group did this? The high-priced hospitals brought their price down. Let the market work just a teeny bit, eh?

  3. abc says:

    Yes, insurance is now required to cover preventive care and other “free stuff”. To compensate for that while keeping the rates at something near manageable, the insurance companies took away providers that treat expensive, costly and serious illnesses.

    Now, we can have a physical, but if we get cancer, we have to use an out of network provider and deal with UNLIMITED costs.

    Thanks, Obamacare. You made things far worse than even I could imagine.

  4. The Affordable Care Act is far from perfect; however, our country is taking a major step forward with this new program intended to increase the numbers of individuals covered by basic health insurance. As time goes on, there will be a need to make adjustments to a program this complex. This will take patience and understanding and some compromise. The compromise includes providers and their rates. Perhaps Seattle Children’s and the insurance companies are at this point?

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