Insurance firm’s health-network restrictions OK

A Little Rock company can continue to offer health insurance plans with limited networks of hospitals, doctors and other providers, the Arkansas Insurance Department has determined.

The restrictions do not violate the state’s “any willing provider law,” Insurance Commissioner Jay Bradford said.

The finding came in response to an inquiry by the Arkansas Medical Society about “high-value network” plans offered by QualChoice Health Insurance that are available through the state’s health insurance exchange.

Premiums for those smaller-network plans are 10 percent lower than those for identical QualChoice plans with broader networks.

To achieve the lower rates, QualChoice Chief Executive Officer Mike Stock has said that the company entered agreements with entire networks of providers - including one in central Arkansas and one in Northwest Arkansas - that agreed to coordinate patient care.

After learning about the arrangement from an Arkansas Democrat-Gazette reporter, medical society Executive Vice President David Wroten submitted an inquiry to the Insurance Department about whether the networks are allowed under the state’s Patient Protection Act.

Passed in 1995 but blocked by court rulings until 10 years later, the law requires insurance companies to include in their networks any hospital, doctor or other health-care provider that meets the conditions set by the insurance company.

Stock said his company is in compliance with the law because it will contract with any “integrated network” of providers, as long as the network agrees to the company’s conditions.

Bradford agreed.

In a March 12 letter to Stock, Booth Rand, an attorney with the Insurance Department, said Bradford concluded that the arrangements are permitted as long as the requirements “are uniformly and equally applied to providers and are actions by a health insurer designed to control costs or maintain quality.”

Stock said that’s the conclusion he expected Bradford to reach.

“We felt we were very careful in how we approached creating the relationship with those provider organizations,” Stock said.

He added that the arrangements are in line with efforts by the state’s Medicaid program to reduce health-care costs.

Wroten said Thursday that he had not yet studied the Insurance Department’s findings.

The goal of the state law is to ensure people “have the right to pick their doctor, not insurance companies,” Wroten said.

“That is what we look at to see - does it limit patients’ choice, and are the rules written in such a way that other entities have the ability to participate in that plan?” Wroten said.

In central Arkansas, the provider for the QualChoice plans is the Arkansas Health Network, which is owned by St. Vincent Health System.

The health system, owned by Denver-based Catholic Health Initiatives, is an investor in QualChoice and has been in discussions about buying the Little Rock insurance company.

As of December, the network included about 380 physicians, including about 120 who were employed by the health system and 260 who were independent.

In Northwest Arkansas, the provider is Health Partners, which is made up of Washington Regional Medical Center and a group of physicians.

Stock said he has been talking to other providers interested in the high-value network plans.

After learning about the Insurance Department’s findings, Baptist Health System doesn’t have concerns about the limited networks, spokesman Mark Lowman said. The company hasn’t decided whether to apply to become a provider under the QualChoice plans, he said.

“We’ll evaluate our strategies based on the clarification we got today,” Lowman said.

Patricia Driscoll, a spokesman for Northwest Health System, said her company is also considering whether to apply for inclusion.

“We are reviewing a variety of new models, including the QualChoice high-value network,” she said.