Many areas have seen more than50 percent consolidation of providers or insurers, which has raisedthe stakes in provider-payer contract negotiations. (Image:Shutterstock)

Consolidation on both the payer and provider side of health careis heightening the disruption caused by contract negotiations between the two parties,a new study from finds. And although the disputes are usuallyresolved at some point, consumers can suffer both financial andhealth risks when the disputes move providers into out-of-network status.

The report from the Center on Health Insurance Reforms from theGeorgetown University Health Policy Institute said that a decade ofconsolidation in the health care industry have led many areas tohave more than 50 percent consolidation of providers or insurers,which have raised the stakes in provider-payer contractnegotiations.

Related: States taking action to curb provider consolidationand price increases

"Although rare, contract disputes that end with the providerleaving the health plan's network can disrupt patient care andreduce access to services," the report said. "Enrollees who reliedon certain hospitals or physicians being in-network when they chosea plan may also be exposed to unexpected out-of-network costs."

The researchers reviewed insurance laws in six states for legaland regulatory tools that can be used to lessen the harm andconfusion that consumers may suffer as a result of these corporateclashes.

Large scale disruption

The report outlined some of the hardship these disputes cancreate for consumers. "For example, in Texas, 100,000UnitedHealthcare Medicare and commercial insurance members lostin-network access to eight Houston Methodist hospitals and otheroutpatient facilities after the insurer and hospital system failedto reach an agreement before their contract expired in December2019," the report said.

Another example was a dispute between WellStar Health System andAnthem in Georgia—Wellstar was the main provider system fornorthwest Atlanta, and Anthem was the largest insurer in the state.As that case went through the legal system late last year, Anthemwas also engaged in a dispute with Northeast Georgia HealthSystems, a provider group that serves 40,000 Anthem members in theGainesville area. That dispute was finally resolved in January of this year—threemonths after the previous contract expired, leaving consumers withuncertainty about their coverage during an open enrollmentperiod.

At the same time, the ability of state regulators to protectconsumers affected by these disputes vary widely from state tostate. The report noted that a model law for ensuring adequatecoverage, developed by the National Association of InsuranceCommissioners, has not been fully adopted by a number of states.And states vary significantly in how proactive they tend to be withinsurers or health systems.

Recommendations for regulators

The report recommends regulatory steps to lessen the disruptioncaused by contract disputes. However, the researchers noted thatsome of the steps are more intrusive than others and may requirethe state to devote more resources to regulation.

The recommended steps include:

• Legislatures should give their departments of insurance (DOIs)authority to require that insurers notify them and consumers oflikely contract terminations and how it will affect providernetworks.
• DOIs should require that consumer notices include informationon enrollees' rights to continuity of care and an adequatenetwork.
• DOIs should require that insurers limit enrollees' cost-sharingto the in-network amount if in-network services are not reasonablyaccessible during a contract lapse. "Reasonably" should be assessedusing pre-established time and distance standards.
• When DOIs receive consumer complaints regarding a lack ofin-network providers, DOIs should contact insurers and providers toassess network access and, when appropriate, require insurers toprotect plan enrollees from out-of-network cost-sharing.

The report also suggests a list of best practices for insurersinvolved in contract disputes. In the CHIR blog, officials with the center said bothindustry and government stakeholders should work to protectconsumers affected by these disputes.

"Too often, patients are caught in the crosshairs, facing bothhealth and financial risks when the parties can't reach anagreement," the CHIR blog said. "Since these disputes are likely tocontinue in 2020, insurers and providers need to establish bestpractices for reducing the risks to enrollees when negotiationsfail or drag out for an extended period."

Read more: 

• Monopoly-like consolidation common in health care,study says
• Wanted: More health carecompetition
• New GOP health care bill targets costs,consolidation