Tiered and Narrow Physician Networks

Source: “Tiered and Narrow Physician Networks” published by the American Medical Association


The “preferred provider” strategy, used in tiered and narrow networks, is not a new concept. For decades, the term “preferred provider” has been defined by the managed care industry as a physician, hospital or other health care provider that provides health care services to patients usually at a discounted fee. Today, in an attempt to curtail health care costs, some health insurers and other payers are deploying products that stratify physicians and other health care providers into tiered or narrow networks that are based primarily on cost of care. Patients also face cost control pressures, as the formation of a tiered physician network involves dividing physicians into levels or tiers and designating patients’ co-payments and co-insurances accordingly. If quality-of-care information is considered, it usually plays a secondary role in the formation of these networks.

This booklet provides definitions of tiered and narrow physician networks, explains how they work, quantifies problems that may be associated with their use, and concludes with a table that models some tiered and narrow networks. The tiered and narrow network samplings that appear in the table were chosen because either they are offered by large health insurers or they affect a significant number of physicians. Although it is generally health insurers that implement tiered and narrow networks, it is frequently employers, paying the greatest share of health insurance premiums, that are pressuring health insurers to use these networks and other cost-saving strategies….MORE


Table of contents

I. Introduction

II. Definitions

III. Network development using episode groupers

IV. Concerns with the use of grouper methodologies

V. Unintended consequences of tiered and narrow networks

VI. Consequences for teaching hospitals and their phvsicians

VII. American Medical Association policy

VIII. A sampling of tiered and narrow networks

  • A excel
  • Signature Value Advantage
  • UnitedHealth Premium
  • Power Select HMO
  • Premera Dimensions
  • BlueC/wice Solutions
  • CIGNA Care Network
  • Distinctions




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