HMO/Capitated Plans: Just Another Advocate Nightmare

I had my first baptism by fire when dealing with an HMO capitated plan.  I was stopped in my tracks by the ability of the plan to control accessibility and choice.  I had never experienced a plan with limited patient options and control.  I thought I knew them all and along comes the HMO Selected Network Plan.

Capitation plans work like this.  A person signs on to a plan that has a select network.  It is generally a very limited network of providers with one designated hospital facility for inpatient and all testing.  The insurance provides a specific amount of money per enrollee per month and it is the responsibility of the network to stay in that amount.  Some Medicare supplemental plans follow this concept.

Theoretically, the concept is that capitation promotes preventive care and patient doctor relations.    It is  in the best interest of the practice, to promote healthy lifestyles in order to offset the chronically ill who need more visits and possible hospitalizations.  The responsibility falls on the provider to manage care and keep costs down.  The network becomes the mother ship for protocols and decisions.

It sounds like a wonderfully cost saving mechanism.  The design is to have doctors refer in network.  The belief is that  unnecessary testing and out of network referrals will not be ordered.  It also works on the premise that all necessary , appropriate and quality care is available in the network.  The reality is many doctors in the network don’t understand the limitations of the plan and still order or refer outside the network without thinking causing potential problems and headaches for patients. Providers have said to me, it isn’t my job to know these things but my staff.  Meanwhile, a patient gets sent to the wrong facility or specialist and ends up with a bill and an appeal.

There are many questions that arise from this system.  First and foremost, where is the patient in all of this?  The patient has limited, if any options.  Going out of network can be approved only by the network.  How is this different than prior approval in other policies for out of network?  The difference is the network, not the insurance company, has the right to not authorize it, if they think there are services available in the selected network.

Here is an example.  A patient is told surgery is needed for  removal of a tumor.  The patient wants to go to a major specialty center and have the surgery by a renowned specialist.  The network, however, has surgeons available who they deem qualified, and refuse to authorize.  Because it is a capitated rate, the network is responsible for payment not the insurance company and the fear is the cost  will be higher than they want to pay.  They have the last word.  A major battle is necessary to get the network to approve it.  Not an easy task with any plan.

I recently had an experience with a network plan digging in their heels with a refusal. The insurance company’s response was, the network has to authorize treatment at another facility for us to pay.  Unfortunately, an appeal would be timely,care was needed quickly and the patient opted to not appeal.  There was a consideration of private pay but the network facility said , we will not help you. All arrangements must be made by you since we have offered you option we think is best.

I am concerned at the narrowness of these plans.  It excludes patient input. It doesn’t stop from advocating for choice and doing appeals.  It is a product that when offered by an insurance company is not explained properly.  It is my experience most people want some say in their care including options in times of crisis.  Captitation may bring down some costs today but I believe it is not sustainable because the patient has been left out of the equation.