Pub. 14 2015-2016 Issue 4

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S I S S U E N O . 1 , 2 0 1 6 16 new jersey auto retailer Network Strategies In Today’s Insane World of Health Insurance BY BRUCE MAZZARELLI R epeating the same strategy over and over again, and expecting a different outcome, is one definition of insanity. In today’s environment, after years of growing network size, health insurance carriers have come up with a new strategy – sanely focusing on the appropriateness of network size, the overall cost of claims, and revenue sharing with providers, all in hopes of reducing claims costs. Claims are the primary driver of health insurance premiums, and it goes without saying that reducing claims costs will have a positive impact on premiums. To- day, we see carriers developing alternate networks, setting up sub-networks, and even layering networks. While offering alternate networks is not a new concept, this is the first time we are seeing the strategy broadly deployed across several insurance companies. It is more impor- tant than ever to carefully consider the many network options available in the market. Accordingly, this article hopes to provide a high level description of networks available from the leading car- riers in New Jersey. Oxford Health Plans is perhaps the most widely recognized carrier offering more than one network. For many years, Oxford had offered both its Freedom network and its smaller Liberty network. Histor ica l ly, premiums by network differed by as much as 6%. Recently, Oxford has taken their original concept of “smaller is more cost effective” and extended it to what they call their Garden State network. As the name implies, it is a New Jersey-specific network that of- fers premium discounts below even their Liberty network. Amerihealth was also an early adopter of alternate networks, with their Value network offering discounted premiums from their Regional Preferred network. Furthermore, depending on market size, an optional National Network wrap could be applied to most products, with an increase in premiums. Today, Ameri- health offers several facility-specif ic products, designating a facility (or facili- ties) as the base network, with their Value network offered as a “wrap network” for those without desired access to care within the limited base sub-network. Aetna has also made recent changes to how it manages its networks. For many years, most Aetna products in New Jersey were based on their HMO managed care