Good Question: How Do Insurance Companies Decide Who's In-Network?
MINNEAPOLIS (WCCO) -- Starting next year, thousands of people with HealthPartners insurance will no longer be able to use Walgreens as an in-network pharmacy. Those customers will still be able to go to CVS, Target or any of 30-plus other pharmacies in the metro area.
According to HealthPartners, "Prescription costs at Walgreens are higher compared to other pharmacies. By removing Walgreens, we're able to save money for our members and HealthPartners."
So, that had one 'CCO viewer from Minnetonka wanting to know: How do insurance companies decide who's in-network? Good Question.
According to Garrett Black, senior Vice President of health collaboration and provider relations at Blue Cross Blue Shield Minnesota, physicians, hospitals and pharmacists apply for contracts with health insurance companies. Those companies then check things like licensure, certification and the malpractice history of physicians as well as accreditation for hospitals and pharmacies. The goal is to find qualified, high-quality partners.
"It's really about getting the best cost of care and the best quality of care for Minnesotans," said Jim Schowalter, President of the Minnesota Council of Health Plans.
Once a hospital, doctor or pharmacy meets that quality criteria, negotiation on rates begin.
"All of these things are negotiated at a pretty high level," said Steve Parente, a professor of health care economics at the University of Minnesota.
Steve Peterson, a spokesperson for Preferred One, says there are many variables at work, but a major one is to create a network where the reimbursement or fees the provider charges is agreeable to the provider and the plan. Peterson also points that geography is considered so that providers are close to the people a health plan serves.
According to Minnesota Statue 62.D 124, for primary care doctors and hospitals as well as mental health services, travel times must be less than 30 minutes or 30 miles. For specialists and specialist hospitals, it's 60 minutes or 60 miles.
Blue Cross Blue Shield Minnesota's network covers 100% of hospitals and 95% of doctors in Minnesota. Most health insurance companies, including Blue Cross Blue Shield Minnesota, also offer lower-cost plans, but give customers choices from a smaller network.