Obamacare insurer Centene covers 1.4 million people on the individual market, making it one of the largest insurers still offering Obamacare plans. But Thursday the company was sued in Washington state for allegedly misrepresenting the coverage networks they offer their customers. From the NY Times:
“Members have difficulty finding — and in many cases cannot find — medical providers,” who will accept patients covered under policies sold by Centene, according to the lawsuit filed in federal court 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 and by listing nurses and other non-physicians as primary care providers,” the lawsuit claims.
People signed up for insurance and “they suddenly discovered there were no doctors,” said Seth Lesser, a partner at the law firm of Klafter Olsen & Lesser who is representing some of the policyholders…
The lawsuit recounts numerous examples of patients unable to find in-network doctors. In Washington State, Cynthia Harvey was billed for hundreds of dollars in medical costs after she discovered some of her care was out of network. When Ms. Harvey went to the emergency room last year, she was billed $1,544 by the doctor, and the lawsuit claims Centene had no emergency physicians participating in its network in the Spokane area at the time.
The Hill adds that the lawsuit describes the coverage networks offered by Cenetene as “largely fictitious.”
According to the lawsuit, customers found the provider network Centene said was available was “largely fictitious. Members have difficulty finding — and in many cases cannot find — medical providers who will accept Ambetter insurance.”
The suit was filed on behalf of two Centene customers, but seeks class-action status to represent all customers who purchased Centene plans on the ObamaCare exchange.
The move toward smaller networks of doctors is one of the only remaining ways insurers can control costs. Since Obamacare is guaranteed to anyone, regardless of pre-existing conditions, and since the minimum coverage requirements are mandated by the law, most insurers have increased deductibles and reduced the number of participating doctors and hospitals in order to control costs. Insurers have also raised their prices steeply over the past two years in order to account for an older and sicker than expected risk pool.
Last summer when several large insurers such as Anthem pulled out of Obamcare exchanges around the country, potentially leaving some counties with no insurers, Centene came to the rescue. From a Reuters report last summer:
The company said it plans to enter Kansas, Missouri and Nevada in 2018, as well as expand its operations in six existing markets: Florida, Georgia, Indiana, Ohio, Texas, and Washington.
The move is in contrast to some other insurers, which have blamed Republicans for not doing enough to stabilize the marketplace, particularly in guaranteeing the continued payment of Obamacare cost-sharing subsidies next year.
Centene now covers about 10% of Obamacare customers nationwide. But obviously being sued for offering fictitious networks is not going to be good for business even if they win the lawsuit. And if they lose a class-action suit, that could have a significant impact on their bottom line.