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Insurers, providers balk at Covered California proposal

State exchange exec wants to cut lower-performing hospitals from provider networks

In a proposal that has concerned both providers and payers, Covered California Executive Director Peter Lee says he wants to cut low-performing, high-cost hospitals from the state exchange's insurance networks, according to an article from Kaiser Health News published by NPR.

Lee said when it comes to healthcare reform, the focus has shifted from seeking more enrollment to changing the delivery system and making it more cost-effective. "We don't want to throw anyone out, but we don't want to pay for bad quality care either," Lee said to KHN.

If the proposal is approved, payers in California would be responsible for identifying certain hospital outliers on cost and quality starting in 2018. Providers that don't pass the test stand to sully their reputation or even have trouble with future customers, according to the article.

Provider groups say Lee's department is overstepping its boundaries, pointing out that it has not specifically named what measures it will use to evaluate them. Insurers are also critical of Lee's proposal because they do not want competitors or the public to see the deals they make with doctors and hospitals, the article says.

And Charles Bacchi, chief executive of the California Association of Health Plan, argued the proposal could ultimately make it more difficult for health plans and providers to work together constructively, according to KHN.

But Lee says payers have gone "easy" on hospitals and doctors for too long. He also said he hoped the idea would catch on, and has therefore shared his proposal with other state marketplaces, government officials and employer groups.

Lee has also been critical of UnitedHealth's announcement that it may exit the Affordable Care Act exchanges in 2017, and has proposed forcing insurers to pay broker commissions during regular and special enrollment periods in order to prevent them from discouraging the enrollment of more costly consumers.

To learn more:
- read the KHN article

Related Articles:
California considers forcing health insurers to pay commissions
Covered California exec blasts UnitedHealth for ACA criticism