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ACA Health Insurer Centene Hit with Federal Lawsuit for Misleading Customers

by Precise Leads

January 22, 2018

Centene is able to reduce ACA costs to its member by offering a limited provider network, but does it offer too few?

Centene Corp., one of the largest health insurers on the Affordable Care Act (ACA) state exchanges, has been hit with a class action lawsuit claiming that the company failed to offer enrollees a sufficient number of in-network providers.

The suit alleges that members found that healthcare professionals listed in Centene’s plans were not associated with the insurer or had refused to accept patients covered under its Ambetter policies.

According to the lawsuit, filed in federal court on January 11 in Washington State, “Centene misrepresents the number, location and existence of purported providers by listing physicians, medical groups and other providers — some of whom have specifically asked to be removed — as participants in their networks.”

When contacted for comment by the New York Times, a Centene spokesperson said it had not yet seen the lawsuit, but added that it believes that it offers “adequate” networks of medical providers.

An Increased Presence on the ACA Exchanges

As many insurers exited the ACA marketplace, Centene widened its presence on the state exchanges. Today, the St. Louis-based insurer counts more than 1.4 million members in 15 states, according to Bloomberg. In September, Centene sought to expand its footprint in New York State by purchasing Fidelis Care for $3.75 billion. The deal is expected to close early this year.

Using the expertise gained by working with state Medicaid programs, Centene offered lower-cost plans on the ACA marketplace. It managed to reduce ACA premiums in large part by narrowing its provider networks.

An article published in Health Affairs Journal concluded that tighter physician and hospital networks reduced premiums by 16% in comparison to plans that offered a broader lineup of healthcare providers.

The class action lawsuit, however, claims that Centene may have limited its network to too few providers. Before the lawsuit was filed, Washington State’s Insurance Commissioner fined Centene affiliate Coordinated Care $1.5 milion and ordered it to stop selling individual policies in the state until it addressed deficiencies in its provider networks.

In a statement, Washington State Insurance Commissioner Mike Kreidler said that the agency had received 140 complaints from Coordinated Care members who reported difficulty finding in-network healthcare professionals, as well as charges for “surprise” medical bills. After the insurer agreed to rectify its networks’ rosters, Centene was allowed to resume selling policies on the state exchange. Washington State suspended $1 million of the fine contingent upon the insurer staying free of violations for two years.

Cost vs. Coverage

For insurance agents, the Centene lawsuit highlights the importance of helping clients sign up for adequate healthcare insurance when purchasing policies on the ACA exchanges. While price is always a consideration, the plan should also offer its members a wide array of healthcare providers and facilities.

Although Congress failed to fully repeal the ACA, lawmakers have proposed other changes to the law. The Trump administration recently recommended permitting small businesses and self-employed proprietors to join associations to buy health insurance as a group. Plans sold under this model would be free to sell plans that did not offer all the ACA’s essential health benefits.

The new tax law also eliminates the ACA’s individual mandate to buy insurance starting in 2019. With so many continuing developments, insurance agents must continue to monitor and research the healthcare insurance marketplace to ensure that their clients receive sufficient coverage for their medical needs.

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