- As health plans become more competitive, a new regulatory approach is needed to ensure the adequacy of provider networks without stifling marketplace innovation, according to an analysis published Thursday by Brookings and the University of Southern California Center for Health Policy & Economics.
- While qualitative and quantitative standards are useful, they can be too general and too rigid, respectively, the authors write. What is needed is a dispute resolution layer that helps determine when patients need to go outside their network for needed medical care.
- The federal government currently defers to the states on regulating provider networks, but reforms like the Affordable Care Act have increased price competition among payers — leading to narrower networks and the need to rethink network adequacy protections.
Ensuring network adequacy has been a growing concern as the number of health insurance plans with limited networks continues to grow, both in the ACA exchange markets and elsewhere. Efforts to push states to adopt a model law aimed at regulating network adequacy have gained little traction, a 2016 Health Affairs and Robert Wood Johnson Foundation policy brief concluded.
The study authors write loosening regulator reins would "give health plans more flexibility to adapt to market conditions and to adopt promising innovations in care delivery." They added: Having a back-stop dispute process in place would resolve a good bit of the regulatory burden of ensuring at the outset that a given network can meet all likely medical needs."
Specifically, a layered approach to network adequacy would include:
- A general qualitative standard for network adequacy;
- Up-to-date and user-friendly network directories;
- Some baseline quantitative standards such as minimum number of higher-volume primary care and specialty providers;
- An external dispute resolution process to protect patients from being denied access to care due to restricted networks.
The paper also recommends patients not be held financially responsible when a review clears the way for them to receive out-of-network care.
Goals of network adequacy have proven tough to achieve. A 2015 Government Accountability Office report found CMS oversight of provider networks in Medicare Advantage plans to be deficient, and urged the agency to do a more robust job of monitoring them.
In April, CMS issued final regulations aimed at stabilizing the Affordable Care Act market, adding several provisions aimed at shoring up the individual market. For example, the rule allows states to enforce their own network adequacy standards and lowers the percentage of essential community provider insurers must include in their networks.
The regulations also shorten the open enrollment period for 2018 and make it harder to sign up during special enrollment periods.
Concern about network adequacy has also led to a new state and federal regulations requiring payers to provide consumers with updated network directories of available providers. This is important not just to let enrollees know which doctors are covered under their plan but to prevent “surprise” medical bills when they unknowingly seek care out of network.