What consumers need to know about EPO health plans
The new plans are known as exclusive provider organizations, or EPOs. To drive premiums to an attractive, low monthly rate, EPOs won't pay for medical services that are provided by those outside its network of physicians.
That makes them similar to health maintenance organizations, or HMOs, which were popular in the 1990s.
In contrast, preferred provider organizations, or PPOs, allow patients to go to doctors outside of network, though they'll reimburse at a lower rate.
Here's the problem: Even though they mirror HMO plans in terms of the lack of out-of-network benefits, the EPOs don't have the same protections in place to safeguard consumers from inadequate HMO plans in
Without protections to ensure the physician network is adequate, Watson worries about the potential effect on patients' access to care.
"You could have one endocrinologist, and there is such a need that people can't get an appointment," she said of the network.
The potential dangers of EPO plans have caught the attention of
In July and September, Huff blocked
The plans required patients to obtain a referral from a primary care provider before seeing a specialist, or other network physicians, something that HMOs often do.
If a referral isn't first obtained, one plan won't pay for the treatment, while the other would require the patient pay more, depending on the plan.
By requiring a gatekeeper, the plans were trying to operate as an HMO without having to comply with HMO rules, according to the state insurance department. HMOs are reviewed and licensed differently from other insurance products in the state of
"HMOs must comply with a myriad of statutory protections for their customers," Huff said in the filing. "By contrast, an insurer offering an EPO-type product is not required to provide any of these protections."
The insurer, which says its plans are legal under state law, said it is talking with the department to resolve the matter.
"We ... look forward to addressing any concerns they may have,"
NEWLY CREATED
EPOs first began operating in
The state's EPO provision was included in a 2013 bill, sponsored by Sen.
Under
HMOs, for example, must demonstrate to state insurance regulators that the network of providers they include is adequate. They also must provide pricing protections that ensure that a patient won't pay more if they're forced to go outside the network because a service is not available. Protections are also in place to allow a patient to continue a treatment for up to 90 days after a contract between the HMO and a provider is terminated.
HMOs operate a tightly contained network of doctors with no access to out-of-network doctors and that's the reasoning behind the consumer protection laws, Watson said.
No such adequacy requirements exist for PPOs in
The creation of the EPO, however, turned that reasoning on its head.
"The bottom line is: By not providing any out-of-network coverage, it's an effort by the (EPO) plan to keep their costs lower and often by doing that they can keep premiums lower," said
Because price is a major factor in how consumers pick insurance plans, insurers are doing everything they can to offer a low premium, Corlette said.
While lower premiums make the plans attractive, consumers may not be aware of the financial risks and limited physician access of EPOs, experts warn.
Seven EPO plans were available in the
That's because state law does not require insurers to submit filings based on the product type unless it is an HMO plan.
'absolutely concerning'
After a review by the
According to
"It's absolutely concerning," Corlette said of the potential lack of access to these health professionals. "It suggests to me that the federal regulators need to take another look at these plans and assess whether they meet network adequacy standards."
A
"We want them to work with their primary care physician to find the therapist who best meets their needs and personal circumstances," Amy Szable said in an emailed statement.
For plans being sold on the federal exchange, they do have broad adequacy requirements.
But the
The group has a draft of a model law that they would like all states to adopt.
It ensures that adequacy standards exist across all types of insurance plans instead of targeting types of plans.
"It is a problem because a lot of state laws are still written in terms of HMOs and it's a distinction that doesn't make much sense anymore," said
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