Minimizing Risks to Patients in High-Stakes Provider-Payer Contract Disputes

A doctor reads a patient's records during a check up.

Contract disputes can disrupt patients’ access to care.

The Issue

Recent high-profile contracting disputes between health insurance companies and large, regional health systems have generated media attention and concern among plan enrollees. Provider and insurer consolidation that has led to sprawling provider systems owning multiple hospitals, physician groups and ancillary services has raised the stakes in provider-payer contract negotiations.

As these disputes between providers and payers become more frequent, they will place more pressure on state departments of insurance to protect consumers from disruptions in services and the financial burden of unexpected out-of-network costs. Many states have tools to mitigate the disruption caused by pending or completed provider terminations.

Key Findings

Researchers reviewed laws and interviewed state officials and insurers in six states—California, Georgia, Massachusetts, North Carolina, Pennsylvania, and Texas—to determine current policies and best practices to protect patients. These states were chosen for geographic diversity and because each had recently experienced a high-profile contract dispute between providers and payers.

Researchers offer recommendations for insurers and state officials to mitigate the negative consequences when their insurance company parts ways with a provider, including:

  • Providing advance notice to patients about their rights when a provider is terminated from the plan network

  • Requiring insurers to hold enrollees harmless if reasonably close and timely services are not available

Conclusion

While patients have no guarantee that a particular physician or hospital will remain in their insurance company’s network, various policies can protect them when and if a contract dispute leads to a major hospital system or physician group leaving their plan network.

About the Georgetown Center on Health Insurance Reforms

The Center on Health Insurance Reforms (CHIR), based at Georgetown University’s McCourt School of Public Policy, is composed of a team of nationally recognized experts on private health insurance and health reform. We work regularly with a multidisciplinary group of faculty and staff dedicated to conducting research on issues related to health policy and health services. CHIR faculty and staff study health insurance underwriting, marketing and products, as well as the complex and developing relationship between state and federal rules governing the health insurance marketplace.

CHIR provides policy expertise and technical assistance to federal and state policy-makers, regulators and stakeholders seeking a reformed and sustainable insurance marketplace in which all consumers have access to affordable and adequate coverage.