Covered California unplugs most top hospitals from patients

President Obama has been claiming that people can keep their favorite doctors under the Affordable Care Act. But anyone who wants a premier hospital in California better do some homework before signing up.

A survey of the state’s top hospitals has revealed that most contract with only one or two insurance companies under Obamacare, even though the Covered California exchange has 11 companies to choose from. And one hospital, Loma Linda University Medical Center, has refused to participate altogether and has no contracts.

Obamacare is driven by low-cost policies. So the reimbursement rate that hospitals will receive from insurance companies just isn’t worth it to them. The end result is that the blue ribbon hospitals won’t have a large presence on the exchange, CalWatchdog.com has learned.

“The more we are learn about the insurance plans on Covered California, the more it becomes clear that the big name hospitals are sitting on the sidelines — some by choice, other by design of the insurers,” said Josh Archambault, senior fellow for the Foundation for Government Accountability and a frequent Obamacare critic. “Consumers get the short end of the stick.”

CalWatchdog.com looked at the top 15 California hospitals listed in U.S. News & World Report’s 2013-2014 annual report and contacted each one to determine their Obamacare insurance contracts. The full list is at the bottom of this article. We found that six hospitals only contracted with one company, another six had two companies, one hospital had none, and one hospital accepted all 12 companies at various levels. Stanford Hospital, listed as No. 2 by U.S. News, refused to respond to numerous requests for information.

For anyone keeping their old private insurance policy, most of these hospitals will still take myriad plans.

Money

The bottom line is money. And insurance companies are well aware of the costs of working with top tier hospitals, said Gail Wilensky, a board member of UnitedHealthcare and the director of the Centers for Medicare and Medicaid Services during the first Bush administration.

“Many plans … are concerned that they will be dominated by high using populations that have previously been in risk pools and wanted insurance, but couldn’t access it,” she said. “They are pressed to narrow networks to stay within the premiums.”

An investigation I wrote for Watchdog.org (no longer affiliated with CalWatchdog.com) showed that California’s hospitals were in line with the nation’s top hospitals, which had the same type of scenario. Most of the top 18 national hospitals accepted only one or two carriers.

Perhaps the biggest vote of no confidence came from No. 4-ranked Cleveland Clinic, which takes about 100 insurance plans if you have private insurance, but only Medical Mutual of Ohio under the exchange.

Los Angeles’ Cedars-Sinai Medical Center, which made U.S. News & World Report’s national list as well as California’s, took myriad insurance plans before Obamacare, but now in the Covered California exchange lists just Health Net. Shortly after Watchdog.org’s story appeared, radio stations began running frequent ads saying that not all plans were created equal on the exchange.

“Choose your plan carefully. Make sure your plan includes coverage for Cedars-Sinai Medical Center,” the ad intoned.

Many hospitals are in a wait-and-see mode, cautiously entering the exchange and then determining later whether more insurance companies will be added.

“It’s too early to tell what we will do in 2014 or years beyond as there has been more turmoil than expected and we are watching the [Obama] administration consistently introduce or change the regulations along the way,” said Chris Van Gorder, president and CEO of No. 6-rated Scripps La Jolla Hospitals and Clinics. “It’s almost impossible to know what is going to happen or how many patients will subscribe — and, accordingly, what will happen to insurance premiums purchased on the exchange or to the reimbursement to providers.”

Turmoil

And if government funding for indigent patients is reduced, that would create further financial turmoil for hospitals.

“Two of our five hospital facilities have historically received [Medicare] funding to help offset the number of indigent and government patients they care for,” Van Gorder added. “[Medicare] is supposed to be significantly reduced starting this year in exchange for more insured patients.”

So while Covered California is ahead of most states in that it lists the insurance companies on its site, the doctors and hospitals are still lacking. Prospective policy holders can check out our chart or call the medical provider to make sure they are getting what they want.

“Not having well known hospitals in-network on Covered California plans could come back to bite consumers in two ways: first, they cannot access those doctors and second, if they do, they will be stuck with a massively expensive out-of-network charge,” Archambault said.