Capitol Pediatrics and Adolescent Center, a 13-doctor practice with three Triangle locations, is notifying 9,000 families that it is joining the UNC Physicians Network this month and becoming part of UNC Health Care's health insurance network. That means hundreds of families could have to pay more for medical services.
Capitol Pediatrics decided to affiliate with UNC because technology and equipment expenses, as well as the high cost of complying with government regulations, put the practice on a path that was economically unsustainable in the future, said Jeff Ryan, one of the pediatricians with the practice.
"We saw less money coming in and more money going out," Ryan said.
Capitol Pediatrics' move is similar to that of other medical practices in recent years. Some 36,000 independent physician practices were acquired by hospitals between 2012 and 2016 nationwide, according to studies released in 2016 and 2018 by the Physicians Advocacy Institute. The institute's president, Robert Seligson, who is also CEO of the N.C. Medical Society, said smaller practices have little choice if they want to survive because "payment policies mandated by insurers and government heavily favor large health systems."
Patients of those practices are often left scrambling to find new doctors or forced to pay higher prices — at least for a short time.
Capitol Pediatrics alerted its patients that the practice will no longer be listed as "in-network" on a number of health insurance policies that some patients are locked into for the rest of the year.
The affected health insurance policies are Blue Cross and Blue Shield's "Blue Local," Aetna's "Duke Basic" and "Duke Select," as well as some employer-sponsored health insurance plans with what are called "narrow networks." These policies consider UNC to be outside the covered network and offer skimpier coverage for patients who use UNC doctors, clinics, labs and hospitals.
For example, a $5,000 hospital bill covered "in-network" on "Blue Local" would cost the patient $1,565, but the same hospital visit would cost $4,375 if it's "out of network," according to Blue Cross materials.
It's a relatively new problem as health insurers offer narrow network plans to keep down costs. In the Triangle, the two networks are UNC Health Care and Duke University Health System, which is paired with WakeMed Health & Hospitals. Narrow network insurance plans provide more generous coverage for "in-network" doctors and facilities.
To help patients deal with the cost increase, Capitol Pediatrics suggests patients use UNC's financial assistance program for the uninsured, visit urgent care clinics instead of seeing doctors at Capitol Pediatrics, or that they find a temporary doctor in their network for the rest of the year until they can change their health insurance policy to regain full coverage.
"We don't want to lose any patients," Ryan said. "The hard part is we're seeing more of these limited network plans in this area."
Capitol Pediatric's affiliation with UNC Physicians Network starts June 25. The practice estimates it has 600 children on narrow network plans whose families will have to pay more or find alternative solutions through the end of this year. Affordable Care Act rules and many employers prohibit people from switching health insurance policies in mid-year. Many families will be able to pick another health insurance plan this fall that will go into effect Jan. 1.
Ryan said he talked to one family this week and suggested they contact him by phone for routine questions but avoid coming in and getting billed for an "out-of-network" visit. The family will switch insurance plans next year, he said.
Capitol Pediatrics, formed in 2000, has 17,000 active patients from infancy through age 21, in about 9,000 families. Most families are not in narrow network plans: Two large insurers are the N.C. State Health Plan and Medicaid, which cover UNC, Duke and WakeMed facilities and doctors.
Blue Cross, the state's biggest health insurer, covers just under half of the practice's patients, but many of those are through the State Health Plan or in employer-sponsored plans, with statewide coverage.
UNC Physicians Network comprises 84 physicians practices and 302 doctors, not including Capitol Pediatrics.
Capitol Pediatrics will remain semi-independent. Its five partners will have autonomy in hiring decisions, Ryan said, but its employees will become employees of UNC Health Care. Ryan said affiliating with UNC will help shore up finances because UNC will take the lead on bulk purchasing of hardware and software, and contracting for health insurance reimbursements.