Why Payer-Provider Networks Will Help Health Care Flourish Post COVID-19

The American Hospital Association has asked insurers for financial assistance through advanced/accelerated payments as health care providers see a drastic drop in revenue during the pandemic.
By: and | May 17, 2020

Health insurance carriers have made efforts to support subscribers and dependents through the pandemic crisis by waiving cost sharing such as co-pays, coinsurance and deductibles for providers’ office visits, lab fees and treatments related to COVID-19.


According to The Wall Street Journal, some major insurers are going the extra mile by financially assisting health care providers as they struggle from the sharp decrease in non-emergency services caused by the pandemic.

AHA Moment: Insurers Answer the Call for Help

Health care providers, including hospitals, clinics, and doctors, have experienced financial distress during the pandemic due to the delay of elective surgeries and decline in demand for non-emergency care.

This situation is especially difficult for providers who have expended additional funds on improving COVID-19 treatment capabilities but have not seen a commensurate influx of patients.

The American Hospital Association (AHA) has asked insurers for financial assistance through advanced or accelerated payments as health care providers have seen a drastic drop in revenue during the pandemic.

Les Williams, partner and chief revenue officer, Risk Cooperative

The recent decrease in claims to payout has enabled health insurers to heed the AHA’s request, allowing them to assist struggling providers to secure loans and pay claims earlier.

Sandra Clarke, Chief Financial Officer of Blue Shield of California, told The Wall Street Journal that the California-based insurer saw claim filings drop 20 percent in March.

As a result, Blue Shield of California will reserve $200 million to be allocated toward loans for hospitals, doctor’s offices, and clinics. This money will also be used to purchase expected insurance claims in advance.

Maryland’s CareFirst BlueCross BlueShield is following suit by spending $110 million to provide interest-free loans to hospitals and providers. The insurer is also allowing some providers to bill for video or telephone visits while receiving accelerated reimbursements.

United Health Group has expedited $2 billion in payments to physicians and hospitals. The insurer is also offering up to $125 million in loans to providers in which it holds a stake.

The Changing Landscape of Health Care Post COVID-19

While insurers are the proverbial white knights coming to the aid of smaller providers, it remains unknown if a similar aid package will be available in the future given the uncertainty of the next pandemic or crises.

The U.S. Bureau of Labor Statistics reported a decline of 1.4 million in health care employment during the month of April and with the risk of a smaller provider network, health insurers have additional motivation to ensure providers receive financial support throughout the pandemic and beyond.

A dwindling provider network not only hurts insurers from a financial perspective, but also patients who are already seeing health care facilities close across the country.

To protect this vital provider network, more health insurers should consider establishing a payer-provider network similar to Kaiser Permanente.

Kaiser’s network model, where payers and providers are the same, is lauded as one of the most efficient forms of health care delivery.

Derrick Wong, account executive, Risk Cooperative

Rather than placing the focus on generating high volumes of services, the system aligns financial incentives to provide high quality and affordable patient care.

The payers and providers are both accountable for a comprehensive budget where each party exclusively contracts with one another to deliver health care services.

This strong partnership improves the delivery of medical knowledge with the adoption of evidence-based care through patient data, leading to more efficient diagnoses and treatments, lower costs and an overall better experience for patients.

This emphasis on maintaining affordable and high-quality care through aggressive contracting and payer-provider integration is continuing to grow, as demonstrated by the increasing partnerships between insurers and local health systems over the past few years.

Aetna and Allina Health, the Minnesota-based health care system, announced the creation of their jointly owned health plan company in 2017.

Penny Wheeler, president of Allina Health, declared in the company’s press release that the partnership between Aetna and Allina Health would concentrate on “transforming our patient care strategies to focus on outcomes rather than volume of services.”

Penny stressed that she hopes to “rethink, reimagine, and redefine the health care system to reward value more than volume.”

Aetna also partnered with Banner Health in Arizona to offer an integrated approach that aims at eliminating redundancies in care and services, allowing the organization to pass the savings to consumers through lower premiums.

Two major insurers in Pennsylvania have been competing for a greater share in the regional health care market by forming integrated partnerships with local health systems. University of Pittsburgh Medical Center (UPMC), a Pittsburgh-based health enterprise, pursued a joint venture with Pinnacle Health in 2017.

Several months later, national health organization Highmark Inc. announced its partnership with Penn State Health, the central Pennsylvania multi-hospital system.

In a press release for Penn State Health, Dr Peter Dillon, executive vice president for Penn State Health, stated that the “collaboration is about sharing information and developing best practices that lead to better health and improved outcomes for patients.”

Dr. Charles DeShazer, chief medical officer for Highmark Inc., added that “by expanding physicians’ access to clinical and data insights and aligning their efforts, the network positions primary care practices to better prevent and manage health conditions.”


As the payer-provider model gains traction and continues to address some of health care’s biggest challenges, it is also a necessary means to stay competitive and relevant in today’s capricious environment; especially in one with a diminishing provider network.

Ultimately, the primary focus of insurers and providers should be directly improving patient outcomes, increasing health proficiency, and broadening health care access. Vertically integrated payers and providers encompass all these qualities at an affordable cost.

In today’s recessive economy where maintaining health is at the utmost importance, this value-driven, outcome-based model has the potential to flourish. Expect to see the formation of more payer-provider networks in the aftermath of COVID-19. &

Les Williams, CRM, is Co-Founder and Chief Revenue Officer of Risk Cooperative. He holds a BS in Mechanical Engineering from the University of Virginia and an MBA from Harvard Business School. Prior to joining Risk Cooperative, Les served in various institutional sales positions at SoHookd, JLL, and IBM. Derrick Wong is an Account Executive at Risk Cooperative, a specialized strategy, risk, and insurance advisory firm based in Washington, DC. He holds a BS in Business Management from St. John Fisher College and has over 10 years of experience as a licensed professional in the health insurance industry.

More from Risk & Insurance

More from Risk & Insurance

Risk Scenario

The Betrayal of Elizabeth

In this Risk Scenario, Risk & Insurance explores what might happen in the event a telemedicine or similar home health visit violates a patient's privacy. What consequences await when a young girl's tele visit goes viral?
By: | October 12, 2020
Risk Scenarios are created by Risk & Insurance editors along with leading industry partners. The hypothetical, yet realistic stories, showcase emerging risks that can result in significant losses if not properly addressed.

Disclaimer: The events depicted in this scenario are fictitious. Any similarity to any corporation or person, living or dead, is merely coincidental.


Elizabeth Cunningham seemingly had it all. The daughter of two well-established professionals — her father was a personal injury attorney, her mother, also an attorney, had her own estate planning practice — she grew up in a house in Maryland horse country with lots of love and the financial security that can iron out at least some of life’s problems.

Tall, good-looking and talented, Elizabeth was moving through her junior year at the University of Pennsylvania in seemingly good order; check that, very good order, by all appearances.

Her pre-med grades were outstanding. Despite the heavy load of her course work, she’d even managed to place in the Penn Relays in the mile, in the spring of her sophomore season, in May of 2019.

But the winter of 2019/2020 brought challenges, challenges that festered below the surface, known only to her and a couple of close friends.

First came betrayal at the hands of her boyfriend, Tom, right around Thanksgiving. She saw a message pop up on his phone from Rebecca, a young woman she thought was their friend. As it turned out, Rebecca and Tom had been intimate together, and both seemed game to do it again.

Reeling, her holiday mood shattered and her relationship with Tom fractured, Elizabeth was beset by deep feelings of anxiety. As the winter gray became more dense and forbidding, the anxiety grew.

Fed up, she broke up with Tom just after Christmas. What looked like a promising start to 2020 now didn’t feel as joyous.

Right around the end of the year, she plucked a copy of her father’s New York Times from the table in his study. A budding physician, her eyes were drawn to a piece about an outbreak of a highly contagious virus in Wuhan, China.

“Sounds dreadful,” she said to herself.

Within three months, anxiety gnawed at Elizabeth daily as she sat cloistered in her family’s house in Bel Air, Maryland.

It didn’t help matters that her brother, Billy, a high school senior and a constant thorn in her side, was cloistered with her.

She felt like she was suffocating.

One night in early May, feeling shutdown and unable to bring herself to tell her parents about her true condition, Elizabeth reached out to her family physician for help.

Dr. Johnson had been Elizabeth’s doctor for a number of years and, being from a small town, Elizabeth had grown up and gone to school with Dr. Johnson’s son Evan. In fact, back in high school, Evan had asked Elizabeth out once. Not interested, Elizabeth had declined Evan’s advances and did not give this a second thought.

Dr. Johnson’s practice had recently been acquired by a Virginia-based hospital system, Medwell, so when Elizabeth called the office, she was first patched through to Medwell’s receptionist/scheduling service. Within 30 minutes, an online Telehealth consult had been arranged for her to speak directly with Dr. Johnson.

Due to the pandemic, Dr. Johnson called from the office in her home. The doctor was kind. She was practiced.

“So can you tell me what’s going on?” she said.

Elizabeth took a deep breath. She tried to fight what was happening. But she could not. Tears started streaming down her face.

“It’s just… It’s just…” she managed to stammer.

The doctor waited patiently. “It’s okay,” she said. “Just take your time.”

Elizabeth took a deep breath. “It’s like I can’t manage my own mind anymore. It’s nonstop. It won’t turn off…”

More tears streamed down her face.

Patiently, with compassion, the doctor walked Elizabeth through what she might be experiencing. The doctor recommended a follow-up with Medwell’s psychology department.

“Okay,” Elizabeth said, some semblance of relief passing through her.

Unbeknownst to Dr. Johnson, her office door had not been completely closed. During the telehealth call, Evan stopped by his mother’s office to ask her a question. Before knocking he overheard Elizabeth talking and decided to listen in.


As Elizabeth was finding the courage to open up to Dr. Johnson about her psychological condition, Evan was recording her with his smartphone through a crack in the doorway.

Spurred by who knows what — his attraction to her, his irritation at being rejected, the idleness of the COVID quarantine — it really didn’t matter. Evan posted his recording of Elizabeth to his Instagram feed.

#CantManageMyMind, #CrazyGirl, #HelpMeDoctorImBeautiful is just some of what followed.

Elizabeth and Evan were both well-liked and very well connected on social media. The posts, shares and reactions that followed Evan’s digital betrayal numbered in the hundreds. Each one of them a knife into the already troubled soul of Elizabeth Cunningham.

By noon of the following day, her well-connected father unleashed the dogs of war.

Rand Davis, the risk manager for the Medwell Health System, a 15-hospital health care company based in Alexandria, Virginia was just finishing lunch when he got a call from the company’s general counsel, Emily Vittorio.

“Yes?” Rand said. He and Emily were accustomed to being quick and blunt with each other. They didn’t have time for much else.

“I just picked up a notice of intent to sue from a personal injury attorney in Bel Air, Maryland. It seems his daughter was in a teleconference with one of our docs. She was experiencing anxiety, the daughter that is. The doctor’s son recorded the call and posted it to social media.”

“Great. Thanks, kid,” Rand said.

“His attorneys want to initiate a discovery dialogue on Monday,” Emily said.

It was Thursday. Rand’s dreams of slipping onto his fishing boat over the weekend evaporated, just like that. He closed his eyes and tilted his face up to the heavens.

Wasn’t it enough that he and the other members of the C-suite fought tooth and nail to keep thousands of people safe and treat them during the COVID-crisis?

He’d watched the explosion in the use of telemedicine with a mixture of awe and alarm. On the one hand, they were saving lives. On the other hand, they were opening themselves to exposures under the Health Insurance Portability and Accountability Act. He just knew it.

He and his colleagues tried to do the right thing. But what they were doing, overwhelmed as they were, was simply not enough.


Within the space of two weeks, the torture suffered by Elizabeth Cunningham grew into a class action against Medwell.

In addition to the violation of her privacy, the investigation by Mr. Cunningham’s attorneys revealed the following:

Medwell’s telemedicine component, as needed and well-intended as it was, lacked a viable informed consent protocol.

The consultation with Elizabeth, and as it turned out, hundreds of additional patients in Maryland, Pennsylvania and West Virginia, violated telemedicine regulations in all three states.

Numerous practitioners in the system took part in teleconferences with patients in states in which they were not credentialed to provide that service.

Even if Evan hadn’t cracked open Dr. Johnson’s door and surreptitiously recorded her conversation with Elizabeth, the Medwell telehealth system was found to be insecure — yet another violation of HIPAA.

The amount sought in the class action was $100 million. In an era of social inflation, with jury awards that were once unthinkable becoming commonplace, Medwell was standing squarely in the crosshairs of a liability jury decision that was going to devour entire towers of its insurance program.

Adding another layer of certain pain to the equation was that the case would be heard in Baltimore, a jurisdiction where plaintiffs’ attorneys tended to dance out of courtrooms with millions in their pockets.

That fall, Rand sat with his broker on a call with a specialty insurer, talking about renewals of the group’s general liability, cyber and professional liability programs.

“Yeah, we were kind of hoping to keep the increases on all three at less than 25%,” the broker said breezily.

There was a long silence from the underwriters at the other end of the phone.

“To be honest, we’re borderline about being able to offer you any cover at all,” one of the lead underwriters said.

Rand just sat silently and waited for another shoe to drop.

“Well, what can you do?” the broker said, with hope draining from his voice.

The conversation that followed would propel Rand and his broker on the difficult, next to impossible path of trying to find coverage, with general liability underwriters in full retreat, professional liability underwriters looking for double digit increases and cyber underwriters asking very pointed questions about the health system’s risk management.

Elizabeth, a strong young woman with a good support network, would eventually recover from the damage done to her.

Medwell’s relationships with the insurance markets looked like it almost never would. &


Risk & Insurance® partnered with Allied World to produce this scenario. Below are Allied World’s recommendations on how to prevent the losses presented in the scenario. This perspective is not an editorial opinion of Risk & Insurance.®.

The use of telehealth has exponentially accelerated with the advent of COVID-19. Few health care providers were prepared for this shift. Health care organizations should confirm that Telehealth coverage is included in their Medical Professional, General Liability and Cyber policies, and to what extent. Concerns around Telehealth focus on HIPAA compliance and the internal policies in place to meet the federal and state standards and best practices for privacy and quality care. As states open businesses and the crisis abates, will pre-COVID-19 telehealth policies and regulations once again be enforced?

Risk Management Considerations:

The same ethical and standard of care issues around caring for patients face-to-face in an office apply in telehealth settings:

  • maintain a strong patient-physician relationship;
  • protect patient privacy; and
  • seek the best possible outcome.

Telehealth can create challenges around “informed consent.” It is critical to inform patients of the potential benefits and risks of telehealth (including privacy and security), ensure the use of HIPAA compliant platforms and make sure there is a good level of understanding of the scope of telehealth. Providers must be aware of the regulatory and licensure requirements in the state where the patient is located, as well as those of the state in which they are licensed.

A professional and private environment should be maintained for patient privacy and confidentiality. Best practices must be in place and followed. Medical professionals who engage in telehealth should be fully trained in operating the technology. Patients must also be instructed in its use and provided instructions on what to do if there are technical difficulties.

This case study is for illustrative purposes only and is not intended to be a summary of, and does not in any way vary, the actual coverage available to a policyholder under any insurance policy. Actual coverage for specific claims will be determined by the actual policy language and will be based on the specific facts and circumstances of the claim. Consult your insurance advisors or legal counsel for guidance on your organization’s policies and coverage matters and other issues specific to your organization.

This information is provided as a general overview for agents and brokers. Coverage will be underwritten by an insurance subsidiary of Allied World Assurance Company Holdings, Ltd, a Fairfax company (“Allied World”). Such subsidiaries currently carry an A.M. Best rating of “A” (Excellent), a Moody’s rating of “A3” (Good) and a Standard & Poor’s rating of “A-” (Strong), as applicable. Coverage is offered only through licensed agents and brokers. Actual coverage may vary and is subject to policy language as issued. Coverage may not be available in all jurisdictions. Risk management services are provided or arranged through AWAC Services Company, a member company of Allied World. © 2020 Allied World Assurance Company Holdings, Ltd. All rights reserved.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]