Many of the complaints directed at the Patient Protection and Affordable Care Act (PPACA) have centered on the lack of providers available to those with PPACA plans.

However, officials in California also appear concerned by the providers that are participating in the marketplace. Some of them aren’t good enough to be included, they say.

“We don’t want to throw anyone out, but we don’t want to pay for bad quality care either,” Peter Lee, executive director of Covered California, the state-run exchange, told Kaiser Health News.

The state is considering excluding certain hospitals from the marketplace based on cost and quality measurements. The proposal will go before the five-member exchange board in April.

Insurers that offer plans on the exchange will have to notify the state of hospitals that cost significantly more than others as well as those that are producing more negative outcomes. It is not clear what quality metrics will be used to assess hospitals.

But insurers aren’t happy about publicizing the reimbursement rates they negotiate with hospitals. As a result, they’re joining providers in opposing the proposal.

Many predictably worry that excluding some hospitals from PPACA plans will only exacerbate the challenge that many face in finding in-network providers.

Last year the American Academy of Emergency Physicians reported that an increasing number of insured patients were showing up in emergency rooms with non-emergency conditions because their plan did not include enough nearby physicians and specialists for them to get convenient treatment.

And of course, doctors and hospitals are worried that the quality metrics used to evaluate treatment will be arbitrary or flawed. One study recently suggested that hospitals in poor areas are more likely to be penalized by outcome-based reimbursement models because their patients are less likely to have access to the types of medical services that prevent people from being readmitted to the ER.

Instant Insights /

California considers kicking bad hospitals out of PPACA exchange

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