An Assessment of Legal Issues Raised in “High Performing” Health Plan Quality and Efficiency Tiering Arrangements: Can the Patient Be Saved?

A rarity as few as 25 years ago, physician networks are now the norm in health insurance coverage and health benefit service plans. In 2006, only 7 percent of all employers offered a “conventional” plan, that is, a plan whose terms of coverage are not tied to a provider network; at 54 percent, preferred provider organizations (PPOs) represented the most common type of plan offering that year. Similarly, both Medicare Advantage plans (which as of 2007 enrolled 8.7 million beneficiaries) and Medicaid managed care arrangements (which enroll more than half of all beneficiaries) rely on provider networks. In the case of publicly sponsored plans in particular, receipt of non-authorized, out-of-network care can potentially result in total coverage exclusion except for specified exempt services (e.g., emergency care and family planning services and supplies in the case of Medicaid).