The researchers reviewed insurance laws in six states for legal and regulatory tools that can be used to lessen the harm and confusion that consumers may suffer as a result of these corporate clashes.

Large scale disruption

The report outlined some of the hardship these disputes can create for consumers. "For example, in Texas, 100,000 UnitedHealthcare Medicare and commercial insurance members lost in-network access to eight Houston Methodist hospitals and other outpatient facilities after the insurer and hospital system failed to reach an agreement before their contract expired in December 2019," the report said.

Another example was a dispute between WellStar Health System and Anthem in Georgia—Wellstar was the main provider system for northwest Atlanta, and Anthem was the largest insurer in the state. As that case went through the legal system late last year, Anthem was also engaged in a dispute with Northeast Georgia Health Systems, a provider group that serves 40,000 Anthem members in the Gainesville area. That dispute was finally resolved in January of this year—three months after the previous contract expired, leaving consumers with uncertainty about their coverage during an open enrollment period.

At the same time, the ability of state regulators to protect consumers affected by these disputes vary widely from state to state. The report noted that a model law for ensuring adequate coverage, developed by the National Association of Insurance Commissioners, has not been fully adopted by a number of states. And states vary significantly in how proactive they tend to be with insurers or health systems.

Recommendations for regulators

The report recommends regulatory steps to lessen the disruption caused by contract disputes. However, the researchers noted that some of the steps are more intrusive than others and may require the state to devote more resources to regulation.

The recommended steps include:

• Legislatures should give their departments of insurance (DOIs) authority to require that insurers notify them and consumers of likely contract terminations and how it will affect provider networks.
• DOIs should require that consumer notices include information on enrollees' rights to continuity of care and an adequate network.
• DOIs should require that insurers limit enrollees' cost-sharing to the in-network amount if in-network services are not reasonably accessible during a contract lapse. "Reasonably" should be assessed using pre-established time and distance standards.
• When DOIs receive consumer complaints regarding a lack of in-network providers, DOIs should contact insurers and providers to assess network access and, when appropriate, require insurers to protect plan enrollees from out-of-network cost-sharing.

The report also suggests a list of best practices for insurers involved in contract disputes. In the CHIR blog, officials with the center said both industry and government stakeholders should work to protect consumers affected by these disputes.

"Too often, patients are caught in the crosshairs, facing both health and financial risks when the parties can't reach an agreement," the CHIR blog said. "Since these disputes are likely to continue in 2020, insurers and providers need to establish best practices for reducing the risks to enrollees when negotiations fail or drag out for an extended period."

Read more: 

• Monopoly-like consolidation common in health care, study says
• Wanted: More health care competition
• New GOP health care bill targets costs, consolidation