Covered California, the state’s insurance marketplace, has plans to cut out underperforming hospitals—a proposal that has drawn criticism from medical providers and insurers alike.
Covered California Executive Director Peter Lee said that the goal of the healthcare provider reduction is to improve the overall quality of patient care being offered on the exchange, as well as to make coverage more affordable.
"The first few years were about getting people in the door for coverage," Lee said. "We are now shifting our attention to changing the underlying delivery system to make it more cost effective and higher quality. We don't want to throw anyone out, but we don't want to pay for bad quality care either."
Lee added that it was high time for the exchange to “move beyond enrollment and flex its market power on behalf of its 1.5 million members.”
The health exchange’s board is slated to vote on the reduction April. Once approved, the exchange said that it would draw upon other existing measures tracked by Medicare and other groups as basis for the plan. Covered California also stated that it would work with hospitals, consumer advocate groups, and other experts over the next 18 months to come up with a definitive version of the plan.
If approved, insurers would be asked to identify “outlier” hospitals based on cost and quality in 2018. Medical groups and doctors would also be rated similarly after some time.
If the plan pushes through, providers identified as “outliers” could potentially lose insured patients and risk running their professional reputation to the ground.
According to the proposal, health plans in the region are expected to remove poor performing providers from their exchange networks by 2019.
Doctors and hospitals have voiced their opposition against the proposal, accusing the exchange for “overstepping its authority” and for not fully elaborating the measures they would be assessed with.
Insurers have also criticized the exchange’s plan. If the plan is enacted, insurers would have to disclose their negotiated rates with providers—something insurers have long had an aversion to, as it would mean revealing the deals they make with healthcare providers to the public.
