What it takes for high-value provider networks


In the quest to lower costs and improve quality, health insurers increasingly are developing high-value provider networks. Many factors, including reimbursement structures and criteria for provider selection, contribute to successful high-value networks, according to a new Milliman report prepared for America's Health Insurance Plans.

State and federal compliance should be a key consideration when forming high-value networks. To sell qualified health plans on the exchanges, insurers need to provide reasonable and timely access to a sufficient number and type of providers. Adequate networks must include substance abuse and mental health providers as well as essential community providers. In fact, insurers have to include 30 percent of essential community providers in their area or risk being kicked out of the online marketplaces.

For high-value networks to deliver just that, there needs to be active collaboration between the insurer and participating providers. Such cooperation will foster necessary provider engagement and data sharing to keep track of costs and utilization, the report notes.

Milliman cites no exclusive reimbursement structure for high-value networks--they can involve capitation with risk and/or profit-sharing arrangements, discounted fee-for-service arrangements or bundled payments.

As more insurers develop high-value networks, they should look at cost levels relative to efficiency. For instance, a higher priced provider that operates more efficiently may have lower overall costs and thus gain inclusion in the network over a lower-cost, inefficient provider, the report notes. Be sure to consider severity and patient mix when determining a provider's efficiency.

In addition to cost, performance on quality measures plays a key role in provider selection and inclusion. For example, insurers should take into account patient satisfaction, health outcomes as measured by the National Committee for Quality Assurance and Agency for Healthcare Research and Quality, referral patterns, and prescription drug prescribing patterns.

And don't forget about brand names when choosing providers. The report notes some providers, like an area's children's hospital, are important to include even if they don't offer the lowest cost or most efficiency. That message may bear repeating as some provider networks on exchanges exclude some of the top nationally recognized cancer hospitals. And in Washington, Seattle Children's Hospital has been excluded from five of seven plans on the state exchange.

To learn more:
- here's the overview and full report (.pdf)

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