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Nov 2014

Beware the Narrow Networks Bait-and-Switch

You know the bait-and-switch game. An unwary consumer is offered something they really want at a price that can’t be beat. Then when they try to take the product home, they learn the price is actually higher or that the product is no longer in stock and the only other similar product in the store costs three times as much. And if you think this only happens with retail products, think again. Two California health plans have recently been accused of doing a classic bait-and-switch with consumers. So rather than being stuck with a more expensive coffee pot, these  patients were left holding the bag for the costs of necessary medical services that the health plan  should have paid for.

These plans were recently sued in two separate lawsuits because they allegedly misled patients regarding the number of doctors and providers in their network, leaving members with large bills and no doctors to treat them. In both cases, a local consumer advocacy group claims that the two plans offered lists of participating doctors to members and that many members joined these plans because of their preference for a particular listed doctor. But when the members then tried to use the services of these doctors, they learned that the doctors were not part of the network after all. For many, this meant their treating physicians could not provide medically necessary services because it was too late for the members to switch plans. And for those members seeking answers and a solution to this problem, services were often delayed or did not occur at all.

According to media reports, “the cases are part of growing consumer push-back against so-called ‘narrow network’ health plans, which are increasingly common, especially in the state and federal insurance marketplaces created by the Affordable Care Act.” Health plans say such plans are necessary to hold down premium prices.

For instance, in one of the lawsuits, a 61-year-old female member alleges that she picked the plan specifically because she had pelvic inflammatory disease and she thought that her specialist would be in network. At first, the plan paid her doctor’s bills and counted her annual toward her deductible. However, she later learned that the insurer then switched all her doctors to out-of-network status when she was about to reach the $6,350 annual maximum. This meant that she had to pay a $12,500 deductible before the insurer paid any more on her plan.

Similarly, in the other case, two members allege that they checked and signed up for the plan because they believed their doctors were in the network. However, after the patients received care from that doctor, they found out that the doctor was actually not in-network and that the insurer would not cover any payments at all. To add insult to injury, the complaint alleges that the nearest in-network doctor was over 30 miles away from the patient’s home!

If these allegations are correct, then providers may also be greatly harmed when patients unknowingly receive treatment at hospitals, unaware that they are not in-network. For patients that cannot afford the care rendered without their plan’s coverage, this would mean that the hospital runs the risk of losing thousands of dollars. SAC will keep a close look at these cases and keep you updated on the results. At this time, no trial date has been set ..

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