Physicians and Health Insurance Exchange Plans

VII. Key Issues: Regulation & Reform >> C. Health Reform >> Affordable Care Act (ACA) >> ACA and the Health Sector >> ACA and Physicians >> Physicians and Health Insurance Exchange Plans (last updated 11.1.16)
Lead Editor – Dana Beezley-Smith, Ph.D.

Impact of Reimbursement Reductions

  • Insurance Exchange Insights. “All indications suggest that reimbursement will be less through the exchange market in comparison to what commercial plans reimburse today—and could be as low as reimbursement under Medicare or Medicaid. This change in payer mix could affect the future viability of some providers unless they prepare for and adapt to the new payment models…Depending on the community, the impacts can be quite dramatic. I know some of our clients would like to believe that health reform won’t withstand the current legal challenges, but we expect that the payment reforms contained in the PPACA will move forward with or without the current law.” (CliftonLarsonAllen, 3.9.11)
  • How the Federal Insurance Exchange Will Affect Physicians: Predicting Reimbursement Rates. “Preparation for possible lower reimbursement rates must include managing your patient population. Getting the right patient mix will be key to maintaining profits. If lower reimbursed patients are a large percentage of the mix, it could hurt a practice’s bottom line, resulting in staff lay-offs and cutbacks. Physicians should strive to maintain the right blend of government-funded, self-insured, and commercially insured patients.” (Tennessee Medical Association, May, 2013)
  • Will Health Insurance Exchanges Hurt Your Practice? “In Connecticut, two private insurers planning to be part of the state’s HIX sent doctors letters proposing reimbursements that were between 30% and 40% below what they currently pay. This isn’t surprising, since exchange insurers are under tremendous pressure to reduce costs. One way for HIX insurers to lower costs without cutting reimbursements is by setting up something called ‘narrow networks.’ These networks will only involve a fraction of providers in the insurer’s full network. Using this model, insurance companies can still work in the exchanges but minimize their financial risk. Reimbursements won’t necessarily be cut because health plans can reduce costs by choosing the most affordable physicians.” (, 7.23.13
  • How Insurance Exchanges Will Affect Doctors’ Income. “At this point, it is unclear yet whether exchanges will be a boon or a bane for physicians, but there is more evidence on the bane side. Many practices — primary care practices in particular — already have full appointment books and have little room for new patients. If you do decide to take exchange patients, you could face a variety of potential risks, including the possibility of lower reimbursement rates and an inability to control the number of exchange patients you see. You may also have problems with patients who are not used to following treatment regimens and in collecting out-of-pocket payments from them.” (, 7.10.13)
  • What Doctors May Not Know About the ACA – and What They Need to Know. “Onesurvey in summer 2013 found that more than six out of 10 physicians said they were ‘not at all familiar’ with issues like what the Obamacare health exchange plans would cover, what the payment rates would be and how the process would work to get their medical claims paid.” (, 10.1.13)
  • Doctors in Dark About Exchange Plans. “A survey released last week by the New York medical society found 40% of 405 doctors said they didn’t know how they wound up on insurers’ exchange plans. Just 6% said they chose to be on plans and 16% said they had to participate as part of a contract. The rest said they declined to participate. Three quarters of the doctors said they had never received a fee schedule from insurers for the plans…Michelle Berger, an Austin-based ophthalmologist, says she has only heard from one of the insurance companies she works with and she signed a contract to be on Blue Cross of Texas’ exchange plans. She did so before she saw the fees she would be paid, which she says are only slightly better than Medicaid. ‘I’m not going to be able to take a full day of exchange patients and keep my doors open,’ she says.” (USA Today, 11.10.13)
  • Doctors Concerned About Pay Scales Under ACA. “Many doctors are disturbed that they’ll be paid less – often a lot less – to care for the millions of patients who are projected to buy coverage through the health law’s new insurance marketplaces…Insurance officials acknowledge that they have reduced rates in some plans, saying they are under enormous pressure to keep premiums affordable. They say physicians will make up for the lower pay by seeing more patients, since the plans tend to have smaller networks of doctors. But many primary care doctors say they barely have time to take care of the patients they have now.” (McClatchyDC, 11.20.13)
  • Doctor Rebellion. In parts of California “low reimbursement rates have resulted in a doctor rebellion, as nearly seven out of 10 doctors refuse to participate in the exchanges. San Diego broker Neil Crosby told the Examiner that ’65 to 70 percent of the providers have declined the reimbursement schedules the carriers are offering. They will not be providers in the exchange marketplace.’ Similarly, agent David Fear in Sacramento said, ‘Roughly a third of the doctors are going to be accepted in the networks. I’m finding very few specialists in either the Anthem or Blue Shield networks.’ Larry Harrison, an agent in Las Vegas, said the ‘lion’s share’ of doctors there are staying away from the exchanges. On the other side of the country, broker Carol Taylor of Roanoke, Va., estimated that participating doctor networks there are shrinking by 70 percent in the exchange plans.” (Washington Examiner, 11.27.13)
  • Untested Waters. “Topping the list is widespread physician uncertainty about whether having existing contracts with insurers means they’re already included in an exchange network. Right after that is a federal rule that jeopardizes physician payments if patients with subsidized marketplace coverage don’t pay their premiums. Exchange regulations give those patients three months to pay their premiums and allow health plans to deny or later recoup payments from doctors for services provided to patients who end up delinquent. That risk is a big factor in Texas Oncology’s decision to hold off on participating in any exchange plans, at least for now. But it’s not the only factor. ‘If we assume care for a patient and start rendering services, and if in another month or two that patient isn’t able to make a premium payment and loses coverage, Texas Oncology has already committed to a course of costly treatment,’ only to see payments recouped, said Chris Henderson, executive director of payer and public health relations for the statewide cancer group, the largest in Texas.” (Texas Medical Association, December 2013)
  • Doctors Opting Out of  New Plans Due to Low Reimbursement. “Local insurance agents this week are warning that doctor networks in new insurance plans purchased this year may be a lot smaller than you think. One Exeter pediatrician estimates that 80 percent of Tulare County’s private doctors have opted against accepting Covered California plans, as well as individual plans purchased outside the exchange.” (Visalia Times Delta, 3.14.14)
  • Some Florida Doctors Decline to Accept Obamacare. “Nearly 1 million Floridians enrolled in a private health plan through the ACA exchange, but some, like Childe, are finding that some physicians refuse to honor their coverage – even when the doctors are included in the plan’s provider network. Some physicians say they’re concerned they won’t be paid for their services by either the insurer or the patient, and that insurers are not adequately informing doctors of their inclusion in exchange plan networks. ‘You don’t want to be in a situation where you provide service, and turn around and there’s no contract in place to reimburse you,’ said Jay Millson, executive vice president of the Florida Academy of Family Physicians.” (Miami Herald, 7.28.14)
  • Two Doctors Weigh Whether To Accept Obamacare Plans. “Lalime says he also thinks low reimbursement rates are forcing some doctors to decide against accepting insurance under the Affordable Care Act. Dr. Bob Russo is sure of it. He’s a radiologist and he’s also the president-elect of the Connecticut State Medical Society. He says that the low rates and administrative burdens that come along with the ACA could make it a financial loser. ‘You get what you pay for,’ he says. ‘If you can’t convince [doctors] that they’re not losing money doing their job, it’s a problem. And they haven’t been able to convince people of that.’ He, like Counihan, worries about creating a tiered health care system. Think about Medicaid, he says…’So, have we just invented a new Medicaid that kind of slid the scale up a little more to make access a little more?”” (National Public Radio, 8.3.14)
  • A Doctor’s Perspective On Obamacare Plans. “Dr. Bob Russo is sure of it. He’s a radiologist and he’s also the president-elect of the Connecticut State Medical Society. He says that the low rates and administrative burdens that come along with the ACA could make it a financial loser. ‘You get what you pay for,’ Russo says. ‘If you can’t convince [doctors] that they’re not losing money doing their job, then it’s a problem. And they haven’t been able to convince people of that.’…’There’s no question that Medicaid, under its old rates, wasn’t working. So, have we just invented a new Medicaid that kind of slid the scale up a little more to make access a little more?’ Russo says.” (Kaiser Health News, 8.4.14)
  • Doctors Wary of  Insurance Exchange Patients. “‘The exchanges have become very much like Medicaid,’ says Andrew Kleinman, a plastic surgeon and president of the Medical Society of the State of New York. ‘Physicians who are in solo practices have to be careful to not take too many patients reimbursed at lower rates or they’re not going to be in business very long.’” (USA Today, 10.27.14)
  • Doctors ‘Reluctant’ to Take Obamacare Patients: Hospital CEO. “Obamacare has failed to deter emergency room visits because many patients have no choice when they can’t get an appointment with a primary-care physician, the founder of hospital operator Universal Health Services said Friday. While the millions more who have health insurance certainly play a part in the doctor shortage, Alan Miller told CNBC’s “Squawk Box” that poor reimbursement rates for primary-care physicians is also a major factor. ‘They get a better reimbursement when they take care of people that have insurance from their employer,’ the Universal Health chairman and CEO said. ‘The doctors are reluctant to schedule appointments’ with patients who have government plans.” (CNBC, 5.15.15)
  • Doctors, Hospitals Say ‘No’ to Obamacare Plans. “Physicians are reluctant to speak to their decisions not to work with marketplace plans. One family physician who works in rural northeastern Pennsylvania spoke with U.S. News on condition of anonymity. He has been a physician for more than 35 years, and says the administrative burden, paperwork issues and associated care costs for marketplace patients is more than the reimbursement he receives for treating them. Reimbursement can be 30 to 50 percent less than what is offered through employer-provided plans… Another factor that has affected physicians’ decisions not to participate in the exchanges is the concern that they will have to swallow costs of new patients who do not pay their premiums. Under Obamacare, patients who receive tax subsidies through have a 90-day grace period in which to pay their premiums or be dropped from coverage…Dr. Linda Girgis, a member of SERMO’s medical advisory board and a family physician in New Jersey, says patients often don’t realize how much their health care will cost them until they arrive at her office. She accepts patients who receive coverage through the marketplace, but sees them struggle when they learn that low-premium plans have high deductibles, often leading patients to avoid getting the care they need.” (US News, 11.4.15)
  •  Highmark to Cut Doctor Payments for Obamacare Plans. “Citing an estimated $500 million loss last year on health insurance plans sold on the Affordable Care Act marketplace, Highmark Inc. said Friday it plans to reduce what it pays doctors who treat patients with the plans.  Highmark plans to reduce payments to the physicians by 4.5 percent starting April 1 as part of a broad effort to stem losses related to the federal marketplace, said Alexis Miller, Highmark’s special vice president of individual and small group markets. Miller estimated the insurer paid about $500 million more for patients’ care in 2015 than it collected in premiums for the plans sold on the federal marketplace, resulting in the loss. Highmark officials have said the people who signed up through the health law’s marketplace were sicker than the insurer expected. John Krah, executive director of the Allegheny County Medical Society, said doctors should not be held responsible for Highmark setting plan costs too low to cover patients’ care.” (, 2.19.16)

Guidance for Physicians on Exchange Plans

  • Qs and As from the Texas Medical Association. Gives guidance to Texas physicians and other health care providers working with patients using ACA exchange insurance policies. Some aspects are applicable to providers from other states. (Texas Medical Association, 2013)
  • Guidance for Physicians On Exchange Plan Participation. “These issues add up to a certain level of unpredictability for physicians, as well. That means doctors must remain vigilant when evaluating contracting issues, patients’ coverage, and health plans’ conduct, TMA officials say. Participation in an exchange plan is voluntary, so physicians must independently choose whether to opt in, says TMA Vice President for Medical Economics Lee Spangler. He also cautions that physicians must look closely at exchange contracts. Some insurers, for example, may amend existing contracts to include exchange products using their current networks, while others may develop brand new networks and contract offers. Also, Medicaid managed care companies may offer commercial exchange plans, as well, and may apply Medicaid payment rates to commercial fee schedules. ‘Physicians need to pay attention to what they are signing and scrutinize contracts to determine whether Medicaid rates would apply to commercial fee schedules for plans offered in the exchange and whether those rates would be sufficient to cover their business costs,’ he said.” (Texas Medical Association, August, 2013)
  • Six Things Docs Should Know About the ACA. “MedPage Today reached out to a handful of experts to see what they think doctors should know and be aware of as the law’s coverage expansion starts.” The experts recommend physicians expect high deductibles, narrow networks, patients changing plans, the ‘grace period,’ a messy start, and quality-based pay. (MedPage Today, 1.2.14)
  • How the ACA (Obamacare) is Changing How Practices Do Business. “With three months of the Affordable Care Act under our belts, we know how the exchange plans are affecting medical practices and we know what changes medical practices must make to stay afloat in this sea of change.” (Mary Pat Whaley, FACMPE, CPC, Physician Advocate 4.15.14)

Exchange Plans’ Grace Period Provision

  • AMA Issues Grace Period Guide to Assist Physicians. “‘The grace period rule imposes a risk for uncompensated care on physicians so the AMA has created resources to help medical practices navigate the key aspects of the rule to minimize its potential negative impact,’ said AMA President Ardis Dee Hoven, M.D. ‘Managing risk is typically a role for insurers, but the grace period rule transfers two-thirds of that risk from the insurers to physicians and health care providers.’” (American Medical Association, 3.19.14)
  • Health Benefit Exchange Contracting – Providers could be Left Holding the Bag for Two Months of Claims. “In 2014, many providers of healthcare services may not only discover that they are now contracted for health benefit exchange products under existing contracts, but that they may also be holding risk under one or more of those contracts. This is because federal law will allow exchange plan (officially known as ‘qualified health plan’ (‘QHP’)) issuers to pend claims submitted by providers in the last two months of a federally subsidized patient’s three-month grace period for premium payment delinquency. If the patient is terminated from the QHP at the end of the three months for an unpaid premium balance, then the plan issuer can deny all claims submitted on that patient in those last two months. Questions abound, however, as to the extent this federal provision preempts state laws on matters such as prompt payment and rescissions…For those providers anticipating significant exchange-related business paid on a fee-for-service basis, the potential for two months of pended and denied claims could noticeably harm the bottom line.” (American Bar Association, August 2013 Volume 9 Number 12)

Physician Surveys on Exchange Plans

  • Health Care Providers Are Opting Out of Exchange Plans. “A 2014 survey by the Medical Group Management Association, a trade group comprised of multi-physician medical practices, estimated as many as 214,524 American physicians will not be participating in any ACA exchange products. Doctors are opting out of the exchange plans for many reasons; chief among them is the fact that exchange plans are more likely to offer significantly lower reimbursement rates than private market plans, confusion among consumers about the obligations associated with high deductibles, and fear that patients will stop paying premiums and providers will be unable to recover their losses.” (American Action Forum, 10.27.14)
  • Most Medical Groups Are in ACA Exchanges and Dislike Participation. “Group practices are participating in new insurance plans created by healthcare reform by and large, but they are grumbling about it, mostly because of administrative hassles and narrow provider networks, according to a new survey by the Medical Group Management Association (MGMA). Almost 77% of MGMA members have agreed to be network providers in 1 or more private insurance plans sold through state marketplaces, or exchanges, under the Affordable Care Act (ACA). The leading reason for signing up, cited by 58% of participants, was to remain competitive in their local market. But what do group practices expect to gain from the ACA exchanges? Not much, according to the survey, released on May 20. Fifty-nine percent of all practices, participating or not, said the exchanges will have either an unfavorable (44.3%) or very unfavorable (15.1%) effect on them. Only 13.8% of the 700-plus groups polled predicted a favorable or very favorable effect.” (Medscape Medical News, 5.27.14)
  • Physician Survey On First 120 Days With New Obamacare Patients. Of 40,000 physicians surveyed by the MGMA, “56% of respondents reported no change in their practice’s patient population size through April and 24% reported a slight increase…Most practices are not being inundated by new ACA exchange patients but do expect to treat somewhat more of these patients as the year progresses. This research also revealed key issues practices are experiencing with ACA exchange implementation, such as difficulty identifying patients with exchange coverage, determining coverage information and assisting patients with high cost-sharing arrangements.” Practices cited some of the main reasons for not participating with ACA exchange products were related to concerns about financial burdens from patient collections (such as burdens related to collecting high deductibles from patients and concerns about financial liability from the 90-day grace period). (Medical Group Management Association, May, 2014)
  • According to a September, 2014, Physicians Foundation survey, “33% of physicians currently participate in insurance products offered through their state/federal marketplace exchanges, while 28% said they have no plans to.” (Physicians Foundation, September 2014)
  • Are Physicians Better Off Now than Six Years Ago? “Emergency medicine physicians have been particularly hard hit, with more than one half (55%) reporting seeing new patients because of the ACA. Orlee Panitch, MD, chair of the Emergency Medicine Action Fund, who commissioned a poll on this issue for emergency medicine physicians, said, ‘There is strong evidence that Medicaid access to primary care and specialty care is not timely, leaving Medicaid patients with few options other than the [emergency department].'”(Medscape Business of Medicine, 4.1.16)
  • Doctor Participation Drops As Obamacare Enrollment Begins. “Even as some of the nation’s largest health insurers scale back participation on public exchanges under the Affordable Care Act, doctors and hospitals expect a slight decrease in engagement on the Obamacare marketplace for 2017. The number of doctors participating in health plans on public exchanges dipped 4% to 57% of physicians  in ‘health insurance plans offered in the federal or state exchanges under the ACA,’ SERMO, a doctor social media network said. That compares to 61% who said they were going to participate a year ago before 2016 open enrollment, according to SERMO’s poll of 1,682 doctor exchange participants.” (Forbes, 10.31.16)

Coverage Uncertainties

  • Physicians Want Revisions to Health Insurance Exchange Rules. “HHS should allow families easier access to coverage subsidies and require insurers to provide real-time patient benefit data, doctor organizations said.” (American Medical Association, AmedNews, 11.14.11)
  • Narrow Provider Networks Need More Work, ACP Says. “Overly narrow provider networks assembled by insurers limit patient access to clinicians, the American College of Physicians (ACP) said today in its annual report on the state of the nation’s healthcare… The ACP acknowledged that ‘if organized correctly,’ provider networks can improve care coordination and connect patients with top physicians. However, the society pointed to examples of how narrow networks in ACA exchange plans have hurt patient care.” (Medscape Medical News, 2.11.14)
  • Diagnosis: Headaches for Obamacare Enrollees at the Doctor’s Office. “The technical and bureaucratic failures of the six-month open enrollment period that officially ended March 31, the millions of new customers on insurance rolls and a poor understanding among the previously uninsured about how insurance works are combining to create extra burdens for some doctors and their patients.” (Huffington Post, 6.18.14)