Providence Antitrust Action
BACKGROUNDER:
The Role of Provider Panels in Healthcare
For more information:
Athena Maris
503.236.3486
athena@lloydmaris.com
What is a Provider Panel?
Each day thousands of Oregonians access vital healthcare services which are covered under their insurance plans. The mechanism which allows them to do this is called a provider panel or a provider network. Provider panels are lists of pre-qualified physicians, nurses, medical equipment suppliers and others who are capable of supplying the insurance company's customers (or beneficiaries) with the services necessary for quality care. The larger and more diverse the panel, the more choices the consumer has for care.
Implication of Providence Decision
The Providence decision to terminate the contracts of EPIC Imaging|East and Body Imaging Radiology and exclude them from its provider panels means that consumers who have Providence insurance or any of the other 116 insurance plans that currently rent the Providence panel may only use the imaging and radiology services of Providence-owned facilities.
In addition to its PPO plan, Providence sells its own insurance directly to consumers and employers, the only non HMO area hospital system to do so. It also contracts with the Federal government to provide Medicare coverage to seniors. These insurance products account for over three quarters of a million consumers in Oregon and Southwest Washington who will now be denied access to the state-of-the-art technology and expert physician resources at Body Imaging and EPIC Imaging.
Many area physicians have written Providence urging them to reconsider, noting that the exclusion of EPIC and Body Imaging from all Providence-controlled provider plans will substantially reduce the range of diagnostic tools available to them for a significant portion of their patient base and negatively impact care. Copies of these letters are available by contacting Athena Maris, 503-236-3486, athena@lloydmaris.com.
Credentialing a panel
Pre-qualification for a panel is accomplished via a process called credentialing. The physician or provider submits an application and the insurance plan verifies that the provider meets defined requirements for education, licensure, professional standing, service availability and accessibility, and medical and quality management requirements.
Contracting with a panel member
The contracting process works concurrently with credentialing. The insurance plan contracts with a provider or provider group and determines the rate of reimbursement for services. This rate is either negotiated with the provider or the insurance company simply sets the rate it will pay the provider for their services.
Provider Panels within the Local Market
There are a number of provider panels/networks within the local Portland market. Local insurance companies like ODS and Lifewise offer a variety of insurance products. They have local offices that select and maintain their own provider panels, process claims and manage claims among other tasks.
There are also many larger national insurance companies like Cigna and Aetna that do business in Portland but do not maintain offices here. These companies outsource the creation of a local provider panel to a Preferred Provider Organization (PPO). Providence Health System is one such PPO.
The Providence PPO plan currently "rents" its Portland provider panel including credentialing and contracting services to 116 insurance companies for a monthly fee based on a per beneficiary charge. These companies still process their own claims, but reimburse the provider based on the contract it has with the Providence PPO plan. If a consumer/beneficiary wants to get services from a provider who is not on the Providence PPO panel, the beneficiary will incur substantial out of pocket expenses that they would not have if they chose a provider on the panel.
Often the consumer is not even aware of the relationship between their insurance plan and a PPO like Providence. For instance, all Intel employees have Cigna as their health plan. Many would be surprised to learn that it is the Providence PPO plan that dictates whom they may see for medical services.
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