Earlier this week, Wylie H. Dallas shared an interesting Facebook post from a UT Southwestern patient that culled this paragraph of text from the medical institution’s website: “If you plan to obtain coverage through this option, please note that UT Southwestern University Hospitals and Clinics will not be contracted with any of the insurance plans currently available through the Affordable Care Act Health Insurance Marketplace during the 2016 calendar year.”
On its face, it may look like UT Southwestern is attempting to opt out of caring for patients who purchased Obamacare. In reality, the insurance companies have lost so much money on ACA-related claims that they’re shrinking or outright killing their marketplace provider networks to recoup their losses. Your preferred doctor or specialist or hospital may be dropped. That’s why that line of copy is there, and UT Southwestern argues that there’s simply not much it can do at this point to change it. Come December 31, 2015, its hospitals and clinics won’t be in network for plans purchased on the marketplace this enrollment period.
“When we get offered a rate that is less than Medicaid, it’s hard to participate,” says Dr. Bruce Meyer, the executive vice president for Health System Affairs at UT Southwestern. “I don’t know about other health systems in the region, but I know because of our relationship with Texas Health Resources that they were in the same plans that we were in that have been cancelled. It’s much broader than UT Southwestern.”
UTSW notes that Blue Cross Blue Shield of Texas, the state’s largest insurer, killed its PPO exchange plans. Cigna nixed its, too. Assurant Health’s has vanished. Most, if not all, of Texas’ insurance companies have switched their ACA offerings to HMOs, or Health Maintenance Organizations, to rein in spending. HMOs are much narrower than PPOs (Preferred Provider Organizations), which have a broader variety of specialists and care settings to choose from. With those PPOs gone, many providers have been dropped from plans on the marketplace. So that’s what we’re seeing, Meyer argues.
“All of the plans, literally, that we have been participating with were cancelled by the various insurance companies. And that happened relatively recently, like the middle of October,” Meyer says. “We’re negotiating with them to get into plans, but for some plans we’ve been told that they just won’t put us in, that they want to keep it a very narrow network and they don’t want to have us in it. Well, OK, I’m happy to put up our data about the total cost of care, but it is what it is.”
Nikki Mitchell, a spokeswoman for Baylor Scott & White Health, says its hospitals were also part of BCBSTX’s since-departed PPO plan. She sent over a document that states plainly: “Almost all”—emphasis theirs—“BSWH facilities will be out-of-network for any Blue Cross plan sold on the exchange.”
In June, Blue Cross Blue Shield of Texas reported losing $400 million in 2014 because it paid out for more Obamacare claims than it brought in via premiums. To recoup, it asked the state to hike its rates. In July, the Richardson-based insurer announced that it would be outright shedding PPO plans during this enrollment period.
“When the Health Insurance Marketplace opened, we went ‘all in,’ making a calculated risk to offer individual PPO and HMO products in all 254 counties–a commitment that no other Texas insurer was willing to make,” wrote Dr. Dan McCoy, BCBSTX’s chief medical officer, in an editorial published this week on D Healthcare Daily. (He wasn’t available to chat Thursday.) “While we know the discontinuance of our PPO product for individuals will be disruptive, it is clear that keeping the individual PPO policies would limit our ability to provide sustainable coverage to all of our members over time.”
You’re seeing the effects of these decisions throughout the state. Look to Houston, where the new insurance plans have dropped one of the premiere cancer treatment centers in the world, M.D. Anderson. To get treatment there under the HMO plans, patients will have to pay about 20 percent more for these now out-of-network services. Meyer says the rates being offered to UT Southwestern’s clinics and hospitals through these HMO plans are financially untenable.
“The state requires us to be a viable financial enterprise,” he says. “We have to show that we can maintain financial viability. Some of the plans we’ve been offered simply don’t do that.”