Prescribe the right medicine to settle disputes between health insurers and providers

The state legislature should consider what reforms are appropriate to try to avoid another contractual impasse like the one between Hartford HealthCare and Anthem that left patients facing higher out-of-pocket costs and anxiety about their ability to access care.

Yet lawmakers should proceed cautiously, because the wrong medicine could cause different problems.

Hartford HealthCare is the parent company of Hartford Hospital and in control of a large network of health service providers in the state, including The William W. Backus Hospital in Norwich and its associated clinics and outpatient surgical centers in eastern Connecticut. Hartford HealthCare also owns and operates Nachuag Hospital in Mansfield, which plays a vital role in behavioral health care in the region.

Despite renegotiating for a year the highly complex contract that governs the cost of medical services Anthem will pay through its insurance plans, the parties reached the Oct. 1 expiration date without a deal. That meant that Anthem health insurance policies held by individuals and provided through employers were suddenly of reduced value because consumers faced higher prices if they sought care from a Hartford Healthcare physician or facility.

The impasse dragged on for seven weeks, finally ending Nov. 18 with an agreement on a new three-year deal. The contract is retroactive; meaning Anthem customers who received treatments from Hartford HealthCare during the contractual stalemate will pay in-network rates after all. However, patients could not bet on that outcome. During the contract dispute some delayed seeing a doctor, deferred a procedure, or went elsewhere for fear of being assessed higher out-of-network fees.

During a hearing held Tuesday, the General Assembly’s Insurance and Real Estate Committee heard various proposals for dealing with such situations going forward.

Heard frequently was the suggestion that health providers and insurance companies be forced into binding arbitration if they fail to reach a settlement. The problem with that approach is that an arbitrator could mandate excessive prices, which in turn would cause higher premiums. In her testimony, Katharine Wade, the state's insurance commissioner, said the “natural back-and-forth” of negotiations provides the better chance of controlling costs.

As an alternative, the state could insert an arbitrator into the process as an observer several months before a contract expiration date, with the cost covered by the parties. Informed about the details and sticking points, the arbitrator would be prepared — if the contract expires — to work with the parties in finding a settlement.

This approach could dovetail with a suggestion by Comptroller Kevin Lembo for an automatic 60-day extension of the prior contract terms.

Most interesting is Senate President Martin Looney’s proposal that would require that doctors remain in-network and that patients be held harmless and pay in-network rates during the term of their insurance policies, even if a contract has expired. With one or both parties unhappy with the terms of the prior contract, this would provide another incentive to settle without the heavy hand of a mandated agreement.

Looney’s idea makes another point. Why should consumers keep paying full price for an insurance policy when they confront a big decrease in available care through no fault of their own? The answer, of course, is that they shouldn’t.

Despite their recent difficult negotiations, officials from both Hartford HealthCare and Anthem urged lawmakers to allow the parties to work things out.

“In my view, there’s no one but the parties that are better situated to understand the crucial business needs they need to continue to be successful,” testified Dr. James Cardon, CEO of Integrated Care Partners at Hartford HealthCare.

Deremius Williams, vice president of provider solutions at Anthem, said the insurer doesn’t want solutions imposed by third parties.

The best legislative solution would provide incentives and assistance for the parties to reach an agreement, along with protections for consumers if they don’t. That’s the challenge the legislature needs to take up in the 2018 session.

The editorial board is composed of the publisher and four journalists of varied editing and reporting backgrounds. The board's discussions and information gained from its meetings with political, civic, and business leaders drive the institutional voice of The Day, as expressed in its editorials. The editorial department operates separately from the newsroom.

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