Concern over provider network capacity is holding up federal approval of New York State’s plans for mandatory Medicaid managed care. Similar concerns could continue to delay the start-up of Pennsylvania’s Health Choices program. For Medicaid clients who have been spurned by doctors and hospitals who refuse to accept Medicaid fees, having a directory of participating providers to choose from can provide a sense of reassurance. But, during negotiations on mandatory Medicaid managed care programs, the Health Care Financing Administration (HCFA) and states do not always see eye to eye on how to ensure that provider networks do, in fact, give Medicaid recipients adequate choice and access. "If you’re going to mandate people into a health plan and take away their choice, you need to make sure the health plan will be adequate to meet their needs," says HCFA’s Acting Deputy Administrator Sally Richardson. Ms. Richardson acknowledges that "this is an issue in the negotiations" between the agency and New York. Settlement will come down to "how hard" the target for adequate provider capacity will be and how well it will accomplish the goal of improving access to care, she says. Agency opposes dual panels Appointment availability, client waiting times for appointments, travel distances to receive care, etc. are some of the major tools regulators use to monitor network capacity and ensure that networks are adequate. But, in New York, HCFA has gone one step further: It has made clear that to ensure broad access to care it won’t accept plans having separate panels of doctors for Medicaid patients and for the privately insured population. The stance is riling physicians, state health officials, HMOs and even their national association. (A similar requirement in Tennessee for the state’s largest PPO continues to rankle physicians who refer to it as the "cram-down" provision.) Gerard Conway, government affairs director for the New York State Medical Society, says the requirement is a "simplistic" way to ensure adequate network capacity and "leaves physicians with no negotiating power at all" when they are evaluating compensation and other terms of plan participation. Mr. Conway, whose group wants HCFA to allow for dual networks for Medicaid patients and commercial enrollees, warns that access and capacity will be reduced, not enhanced, if HCFA’s proposal prevails. The HMO Conference of New York agrees that a ban on dual networks is problematic because "there will always be some physicians who opt not to participate" in Medicaid. And, since many providers are not employees of the managed care plans, but participate in the plans through individual practice associations (IPA), it is difficult for plans to insist that providers participate in every product they offer. But, others say the rule makes sense because it is anti-discriminatory. "It would be ironic if Medicaid managed care, which was supposed to result in improved access, locks into place, by contract, the very segregated health care system that people have always pointed to as two-tiered medicine," says Sara Rosenbaum, director of the George Washington University Center for Health Policy Research. Over the years, some New York hospitals have been attacked by the media, consumer groups and legislators for discriminating against Medicaid patients by the way they made room assignments, provided services and staffed floors. Ms. Rosenbaum says she would be "floored" if HCFA backed down from its stance on separate provider panels. Doctors can still practice on Park Avenue and avoid plans that do business with Medicaid, says Ms. Rosenbaum. "But, if you want to be in a plan that does both commercial and Medicaid business you cannot select out your clientele." New York Health Commissioner Barbara DeBuono has told HCFA that requiring that 100% of providers participate "is an unreasonable provision." The commissioner’s spokeswoman, Frances Tarlton, says, "it will mean if one physician in the plan refuses to see a client we’ve lost the whole network." She says New York is being singled out and that such a rule "will end up causing us to lose plans and to lose access to community providers." Rather than mandate physician participation as a measure of sufficient capacity, Ms. Tarlton says New York wants to "encourage" health plans to make their entire network available to Medicaid enrollees as well as to commercial enrollees. At minimum, the state wants plans to make 60% of their physicians available in year one of their contracts and 80% in year two. The state would assess progress in "mainstreaming" and would consider mandating full access to plans’ networks by Medicaid recipients by 1998. Under those terms, 45 health plans are ready to sign Medicaid contracts with the state, says Ms. Tarlton. Whether HCFA will relent on the issue of separate panels of providers is unclear given problems with access reported in New York’s voluntary Medicaid managed care program. Those problems "concern us very much," says Ms. Richardson, adding that without tougher requirements, HCFA worries that the quality of providers serving the Medicaid program "would be less than" the quality of providers serving private patients in the same HMO. New York plans to impose extensive capacity standards for health plans, including setting a maximum ratio of Medicaid patients to primary care physician; a maximum travel time of 30 minutes to a primary care site and 45 minutes to an acute care hospital and rigorous standards for scheduling appointments. In Pennsylvania, the issue of network capacity is focused on populations with special needs and disabilities. Before Pennsylvania can start its HealthChoices program in February, the state will have to prove that HMOs have enlisted enough doctors and hospitals to serve the disabled, the AIDS population and others with special needs in the greater Philadelphia region. Meanwhile, the Maine-based National Academy for State Health Policy hopes to shed more light on what measures states are using to ensure adequate networks when it releases findings from a survey of state Medicaid agencies conducted last year. NASHP analyst Neva Kaye says states are very concerned about the issue but, so far, "they have been able to figure out how to deal with it, or at least feel comfortable" with their best judgments. — Janet Firshein Contact Mr. Conway at 516-488-6100, Ms. Kaye at 207-874-6524, Dr. DeBuono’s office at 518-474-2011 and Ms. Rosenbaum at 202-296-6922. Washington State regs to focus on provider networks In Washington, the state’s top insurance watchdog has vowed to give high priority in her second term to putting in place new managed care regulations. A key provision of those rules, says Insurance Commissioner Deborah Senn, is how health plans establish and monitor their provider networks. "The issue of choice of doctor and health care practice is the number one issue in health care," says Ms. Senn. "We want to make sure networks are adequate" to ensure that consumers receive the care they need without delay. The latest version of the regulations defines adequate networks as a health plan "sufficient in numbers and types of providers and facilities" to ensure that all services to covered persons will be accessible without unreasonable delay. Adequacy would be determined by a number of factors, including provider-patient ratios for specialty services as well as primary care; geographic accessibility; waiting times for appointments and hours of operation. Interestingly, Washington is also focusing on the volume of technological and specialty services performed by providers. In numerous studies, providers who do more procedures are closely linked with better patient outcomes. Ms. Senn had hoped to implement these regulations early in 1997 but, after hearing from providers, insurers, and consumers during public hearings last year, she now has put off further discussion of the network capacity issue, although she hopes the regulations can be implemented this fall. Contact Ms. Senn at 360-586-4422.