Plans focus on star ratings in light of ACA pay cuts

November 25, 2013

Payment cuts to Medicare Advantage prompt plans to narrow their networks.

UnitedHealthcare, Humana and other plans have sent mass termination notices to their provider partners, indicating that Affordable Care Act (ACA) payment cuts to Medicare Advantage have forced their hand in making reduction to their networks. More than $200 billion in payment cuts are expected.

“What United is doing is narrowing their network to reduce the amount of contracts and really focus their efforts on the providers that’ll work with them to help them improve their star ratings,” says Don Hall, principal, Delta Sigma LLC, in Littleton, Colo., and MHE editorial advisor. “For a plan that has a large network, they’re not going to be able to control that network nearly as well. High quality can be achieved by focusing on the providers that are willing to work together to provide the appropriate information, communicate and so on-they’re going to be critical to a good star rating."

Narrow networks are already an industry trend, he says, adding that Accountable Care Organizations (ACOs) are narrow networks by definition. According to Hall, plans will be requiring their narrow networks to have better communication and to be more attentive to certain protocols and procedures. Although providers nationwide are going through appeals processes in order to force insurers to reconsider, Halls says that providers are actually in a position to determine what networks they want to be part of and to understand the specifics of what risks are required to be part of a specific network.

“Providers need to determine where they want to fall in all of this,” he says. “Going forward, we’re going to see much more replacement of large networks with narrower networks. It’s a reality that’s coming.”