Consumer complaint about new Health Net plans in California

One of the great pleasures of hosting my own website and blog are the numerous people who have contacted me about Covered California and the new health plans being offered to individuals and families. One gentleman has done an astounding amount of research in response to the health plan changes proposed by Health Net. He has written a letter of protest to California Department of Insurance pointedly questioning how they can approve Health Nets proposed rates for the new EPO health plan that offers less coverage than the PPO plan they are pulling off of Covered California.

Consumer Complaint about Health Net

With his permission, and for your review, I have reproduced the protest letter in its entirety.

To: California Department of Insurance

Re: Justification of Health Net’s new EPO health plan rates

From: Concerned Consumer

Your review of Health Net’s 2015 on-exchange plans has evidently completed, and that seems to mean you approved it. How can you justify this?

You dismissed my complaints of last year (case #CCB-xxxxxx) though they were accurate and prescient of all the troubles that followed. I now understand that you did not have jurisdiction over Anthem and Blue Shield for 2014. I also complained about Covered California. I find it hard to believe you do not communicate in any way with DMHC or with Covered California.

In addition, though this is not your problem but merely FYI, I filed an essentially identical complaint to DMHC, because I was not sure which regulator was in charge. I received from them an absurd and irrelevant response that included placeholder terms like “Dummy Health Plan.” Their response did not even echo my complaint but was a canned response as if I had been complaining about the cancellations of older health plans at the end of 2013.

No doubt you and they were getting many complaints about that – but my complaint was about the inadequacies of Anthem, Blue Shield and Covered California for 2014, their useless and inconsistent provider lists, their inadequate drug formularies, the impossibility of finding SBCs for Anthem plans, the incorrect information in the SBCs I did manage to locate in their dump of documents on their “Document Posting Site,” the inconsistencies between Anthem’s brochures and their SBCs, etc. Most of these problems still exist or are even worse. (Anthem’s provider search is more impossible to use than ever, requiring selection of a health plan from dozens of possible names, even though no one knows the network name. This is evidently Anthem’s new obfuscation strategy for 2015.)

DMHC said their staff thoroughly reviewed the issues I raised and found no violation, but the content of their response suggested they never actually read my complaint.

Now my complaint to you is about Health Net’s on-exchange EPO and off-exchange PPO plans for 2015. These are clearly within your jurisdiction. I doubt I will tell you anything you did not know during your evaluation. If I am telling you things you did not consider, then your department’s competence has to be called into question, as well as your department’s qualifications for receiving more power under Prop 45. If you did know all these things, then please respond to all my complaints with explanations of why you feel these problems were not sufficient for you to reject Health Net’s filing.

Health Net’s limited on-exchange filing for 2015 is expected to cut their network by up to 54% according to media accounts, while dropping out-of-network coverage. Yet they remain the highest cost carrier in region 4 with among the higher premium increases in the state.

The body of my complaints:

First, and this has nothing to do with filing approval and may result in a separate consideration, decision and action by CDI, Health Net sent notice of the 2014 PPO on-exchange plan cancellation in a letter and official notice dated September 30, 2014, “postmarked” by their own machines on October 3, and received by me on October 7. Does this comply with the 90-day notice you require upon plan cancellation? If not, then to be consistent with your actions against Anthem last year, who also mailed notices late, you should extend Health Net’s on-exchange PPO plans for 90 days. This would have to be coordinated with the Open Enrollment and SEP periods to make sure consumers can have their full 90 day extension and also have new insurance in place starting April 1, suffering no gap in coverage.

Second, also unrelated to the filing approval, Health Net’s cancellation letters are misleading and will result once again in people being surprised that their doctors or hospitals are not in next year’s Health Net EPO network. You should require that Health Net issue amended notices that are honest and forthright.

To amplify on this point, and the consequences of not requiring that Health Net redo their notices:

Last year, obviously many people expected their prior Anthem Blue Cross providers or their prior Blue Shield providers to still be in their networks. They trustingly remained with the same carrier and were often burned when they discovered they could either not access their usual providers and hospitals, or were faced with enormous and unexpected bills. There are, as you know, many lawsuits and investigations about this now. While Anthem and Blue Shield’s networks were not under your jurisdiction, the history of that confusion should be well known to CDI, and should inform your awareness of what is going to happen with Health Net which IS under your jurisdiction. If you pay no attention to what is happening under DMHC, then you are certainly not doing a competent job.

This year, I believe, and I think you should at this point be aware, many people will expect their 2014 Health Net providers will still be in the EPO network. According to the media, more than half of the PPO providers will be left out of their EPO. There is no readily available public knowledge yet regarding which hospitals have also been eliminated.

We have been through this exact scenario once. Are you going to let California consumers step into this again?

The only thing that Health Net writes clearly in their cover letter is that the EPO will require members to stay within the network.

Vaguely, they add that “Our EPO plans use a specific network for doctors and hospitals.”

What does that actually mean? Nothing at all. What plan does NOT use a specific network for doctors and hospitals? Their PPO and HMO plans also use a specific network. Everyone’s EPO, PPO, HMO, and Health Net’s mysterious new HSP, does. To my knowledge, no carrier has sold the old kind of indemnity plan since the early 1990s.

Does this letter state that the EPO network will be more limited than the current PPO network Health Net members are accustomed to? No, there is no direct mention of this, and at best no more than very oblique hints of it.

Does the letter state, more accurately, that the network will be very substantially more limited at the same time that it will cut off out-of-network options? Does it say that Health Net is imposing a two-sided squeeze that will limit the consumer from every possible direction? No.

And does the letter say Health Net will cut all these benefits while costing more, not less, than the 2014 offering, and that the decimated EPO will continue to cost significantly more than other plans? Of course not. I realize that is hoping for more than would be realistic, but it is the truth. Since it appears that Health Net is aiming to reduce their 9% share in Northern California to 0%, they might as well go further and in a straightforward way inform the public that their EPO will not be worth signing up for.

In 2014, Health Net’s PPO could have been considered a concierge plan. They offered a broader network than Anthem or Blue Shield in return for $1200 more in annual premiums (for my age, metal and region).

For 2015 they are offering the same exact concierge price gap, but giving back nothing for the price. For some reason this combination of inadequacy and rates has been approved by CDI. Their offering may well prove to be more limited than Anthem’s or Blue Shield’s, though in this murky domain it will take some time to make out the distinctions.

LA Times has just published a provider finder:

“This data uses insurance company information submitted to regulators and obtained under the Public Records Act as of August.”

http://graphics.latimes.com/dr-network/

Hopefully, the tool is missing data. I believe California insurers are either not capable of or not interested in compiling and sharing accurate network listings with outside agencies and not even on their own web sites. If they were capable of sharing data, Covered California would have had usable data for their own provider finder. Covered California has given up even trying to rebuild their tool for 2015. Why? Is it because CC doesn’t possess the technical skill to produce a working tool? Unlikely. It’s not technically impossible or even that difficult. Of course everything CC decides is decided in secret, so the public doesn’t know why they have given up. But their tool can only be as good as the data that insurers provide it. And so I assume CC has thrown up its hands because it can’t get decent data from the insurers.

Does the LA times provider finder fairly represent the records submitted to you in August? It shows only around 200 Health Net providers in all of San Francisco, only 12 in the main CPMC campus where Blue Shield and even Anthem, which excluded nearly the entire CPMC hospital itself in 2014 (except for one campus that was added much later, in 2014, in Tier 2), each have 200+ providers. It also show that the only locations where Health Net shows a moderately significant number of providers are at the St. Francis Hospital and St. Mary’s Hospital professional buildings – two of our local, to be generous, smaller and undistinguished hospitals that are far from world-class like UCSF and the decent if lesser Sutter CPMC. It seems clear that while Health Net’s network may not have been complete in August, they were attempting to start the network by building it up around the lowest quality providers in the city.

Last year Anthem Blue Cross’s EPO in Region 4 included primary care doctors (like my own) whose hospitals were excluded. Surely that is a violation of some state law or regulation, but why has DMHC held no one at Anthem responsible? These mistakes might well have bankrupted some citizens.

While Anthem’s EPO plans are not within CDI’s jurisdiction, I bring this up because of it is an excellent example of what is likely to happen with Health Net’s EPO.

There is no way this small insurer has the time and skill to competently figure out how to keep their new limited sets of hospitals and doctors in synch with each other. Health Net’s current online information about its in-network provider addresses, phone numbers and even names has remained error-ridden since last December. They still do not even show that the national LabCorp and Quest laboratories are in-network, despite my observing this to them last January! The much larger WellPoint was unable to accomplish this task for their Blue Cross Blue Shield products, even though their web site functions for all of the states in which they do business, so they have enormous resources to leverage. Yet Anthem didn’t even produce a working provider finder until mid-December 2013. (They have now replaced it with a less usable tool, reminiscent of their Document Posting Site dump.) Perhaps coordinating hospitals with affiliated doctors was something Anthem decided they would allow the market to figure out for them this past year, by waiting for people to go bankrupt and then fighting the legal challenges by blaming their mistakes on their members. Perhaps that is the lead Health Net is following, since Anthem has so far gotten away with it.

My own PCP was reported as in network by Anthem for at last half of 2014, even though his hospital was never included, even in the more expensive Tier 2. And he is again listed at the LA Times as participating in the 2015 Anthem plan. That would only be sensible if Anthem is going to include CPMC’s Buchanan Street campus in 2015, but the LA Times is not reporting hospitals in their tool. It’s more likely that the Anthem filing in August was still riddled with errors. And this error-filled data and fraudulent data – given WellPoint’s size it is more likely fraudulent that merely incompetent – is what the regulators are reviewing when considering network adequacy.

So this will certainly happen with Health Net’s EPO, on a large scale. It’s a new network for Health Net – they have claimed the 2014 network was the same as their older PPO network, so they didn’t have to build up a new network from scratch until now, for 2015. Do they have the manpower to do this correctly, when WellPoint couldn’t do it right? Unlikely, since Health Net is a small player that is probably biting off more than it can chew in its “me too” attempt to build a narrow network, at the expense of California consumers.

Health Net has also apparently tried to get around CDI by selling a mysterious HSP in place of its PPO in Southern California. That plan is obviously essentially an EPO plan, since it allows self-referral like EPOs do and has no out-of-network coverage. Self-referral means it cannot be an HMO with medical groups, who refer within themselves and attempt to keep costs down to profit within the medical group by limiting referrals where possible. But Health Net added an inconsistent requirement that one use a single PCP. This seems to be a unique offering. While EPOs were alien to the CA market for 2014, and many people including sales agents working for the insurers as well as representatives at Covered California, who should have been better trained, were on a regular basis giving out incorrect information about how EPOs worked, the HSP seems to be a virtually an unknown type of plan. No web search yields any results on HSPs. You won’t find a Wikipedia page describing HSPs (but you will find entries describing PPO, EPO, and HMO plans); you will find no results for HSP anywhere on the web that has anything to do with health insurance.

I bring this DMHC-filed plan up to you because you should be concerned. This is an EPO plan in disguise and should have been filed with CDI. You should ask DMHC to reject the plan and bounce it back to CDI as a fraudulent EPO whose purpose is “regulator shopping.”

I believe CDI and DMHC should attempt to subpoena documents and emails from Health Net that show how and why they came to create this HSP, and if fraud is detected, have Health Net held accountable.

Recent reports have exposed that the only criteria being used to construct narrow networks is provider cost – not quality. (How has this not always been obvious?)

For example, see the recently published article by Georgetown University Health Policy Institute’s Center on Health Insurance Reforms and the Urban Institute, funded by the Robert Wood Johnson Foundation:

http://www.rwjf.org/content/dam/farm/reports/reports/2014/rwjf415649

They evaluated networks in Colorado, Maryland, New York, Oregon, Rhode Island, and Virginia, which they found to be broadly representative of changes happening throughout the country, and reported this:

“Insurers generally did not report any efforts to design a network built on providers’ performance on quality metrics or patient outcomes; price was the determining factor for whether a provider was included or excluded from most networks.”

By the way, this article describes HMO, PPO and EPO plans. There does not appear to be anything called an HSP.

As I said before, Health Net appears to be aiming for 0% of the Region 4 market, and maybe 0% of the entire Northern California market. Are they working with Covered California to provide the ongoing superficial appearance of reasonable choices on the exchange? Their offering will actually be so overpriced and so narrow as to not be attractive to anyone who is paying close attention – something which most consumers do not, and perhaps cannot, do.

Perhaps CDI is involved with this, recognizes that few people will enroll in Health Net, and is going along with Covered California to approve this sham of a plan.

The only other hint of the change in networks in Health Net’s cancellation letter is a sentence that reads “You can keep your Health Net PPO insurance coverage by re-applying directly with us.” Does that mean the PPO network in 2015 will still be broad, similar to the PPO network in 2014? It doesn’t say that. How will people interpret that sentence? Maybe it will just mean to people that the PPO plan will continue to have access to out of network providers (at the existing high deductible amounts and high co-insurance percentage). It is a vague statement – it does not explain fully WHY anyone would want to go off-exchange at full price.

If this is so, then my final question to you is in what way is their decision to offer their PPO network only off-exchange not discriminatory? They are saying “You can have access to a better plan” – possibly with a larger number of providers – “only if you are wealthy enough to not need subsidies.” Is this not an attempt to illegally engage in underwriting? It is well known that people who are financially better off are in better health, so they are offering a better product only to a population they think will have less need of it, which is the whole point of underwriting – to accept only less risky applicants.

I believe that at least you must require that Health Net send out amended, clearly worded letters and extend their 2014 plans by 90 days. Besides the fact that Health was both late and unclear, an extension will give current Health Net subscribers more time to consider their options. That’s time they need since they, uniquely among other 2014 exchange participants, are going to be affected by exchange plan cancellations. They have started their plan evaluation and selection from the top for the second year in a row.

I further believe you should have found that their rate filing is not justified. There is no reason their new limited EPO plans should cost significantly more than Anthem’s EPO , Blue Shield’s PPO, or Kaiser’s HMO. Finally, now that they have filed their off-exchange PPO rate filing with you, and review of it still shown as “in progress” on your web site, you should consider finding it an illegal attempt at underwriting out of compliance with the ACA.

If Health Net offered their PPO on the exchange, for a higher premium than their EPO, it would give consumers a fair choice. By keeping their PPO off limits, they are thumbing their noses at the very foundational principles of the ACA. They are attempting to eat their cake and have it.

Please respond clearly with your intentions regarding the issues I have raised, and please clearly justify them.

Thank you.