Roadmap to the Future – Changes in Health Insurance Markets
CIPR Newsletter, March 2016
Ensuring Consumers’ Access to Care
Network Adequacy State Insurance Survey Findings and Recommendations for Regulatory Reforms in a Changing Insurance Market
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Jolie H. Matthews
Senior Health Policy Advisor and Counsel
Last Updated 4/18/19
Issue: Network adequacy refers to a health plan's ability to deliver the benefits promised by providing reasonable access to a sufficient number of in-network primary care and specialty physicians, as well as all health care services included under the terms of the contract. The federal Affordable Care Act (ACA) included many reforms intended to make quality health care more affordable and accessible. In addition, the ACA requires that health plans participating in qualified health plans (QHPs) in the Marketplaces (also known as "Exchanges") meet network adequacy standards. These includes ensuring consumers have access to needed care without unreasonable delay.
However, a recent trend in the health insurance industry has been toward “narrow network” health plans, which offer a limited choice of providers for members. To address this issue, the NAIC adopted revisions in November 2015 to its outdated Managed Care Plan Network Adequacy Model (Model # 74). The revisions renamed the model act to the Health Benefit Plan Network Access and Adequacy Model Act and made other changes to Model #74 in a number of important areas related to creating adequate provider networks. It also includes key consumer-friendly provisions, such as protections against surprise out-of-network charges. These provisions will strengthen protections for consumers while balancing the need for health insurance carriers to promote quality and reduce costs.
Health insurance carriers generally have the ability to define and adjust the number, the qualifications and the quality of providers in their networks. They also may limit the number of providers in their networks as a means of conserving costs or coordinating care. In so doing, carriers may narrow their provider networks to an extent that enrollees in insurance plans may have relatively or extremely limited options when choosing providers.
The ACA directs the U.S. Department of Health and Human Services (HHS) to develop criteria to certify health plans sold in Marketplaces. These criteria aim to ensure each plan: provides a sufficient choice of providers; includes “essential community providers (ECPs)” to serve predominately lower-income and medically underserved individuals; and provides information to enrollees and prospective enrollees on the availability of in-network and out-of-network providers.
To help ensure that plans offered in the Marketplaces serve the needs of enrollees, the ACA requires that plans sold on the Exchanges must maintain a provider network that is “sufficient in numbers and types of providers, including providers that specialize in mental health and substance abuse services, to assure that all services will be accessible without unreasonable delay.”
In 2013, the Regulatory Framework (B) Task Force was charged to review NAIC existing models related to health insurance to determine whether they needed to be amended in light of all of the changes made by the ACA. During the review process, it was clear that revising the original Managed Care Plan Network Adequacy Model Act (#74) was a priority for regulators, carriers, and consumers. Shortly after the completion of the review process, the NAIC learned that the federal Center for Consumer Information and Insurance Oversight (CCIIO) was considering adopting regulations to establish federal network adequacy standards-a possible one-size-fits-all national standard.
Realizing that a federal one-size-fits-all national standard would not benefit consumers or health carriers and that state insurance regulators are best positioned to balance cost, access and geographic considerations when developing network adequacy standards so that consumers can access promised services without unreasonable travel or delay, the NAIC made revising Model #74 an immediate priority.
In March 2014, the Regulatory Framework (B) Task Force established the Network Adequacy Model Review (B) Subgroup. The Subgroup discussed a myriad of issues, including how to deal with tiered networks, provider directory information and accuracy, surprise bills received by consumers for out-of-network services provided at participating facilities, ECPs and limited scope dental and visions benefit plans. The Subgroup adopted proposed revisions to Model #74 on Oct. 12. 2015. After adoption by the Regulatory Framework (B) Task Force and the Health Insurance and Managed Care (B) Committee, the full NAIC membership adopted the revisions to Model #74, now called the Health Benefit Plan Network Access and Adequacy Model Act, at the 2015 Fall National Meeting.
The revisions to Model #74 include a number of enhancements such as more specific requirements in Section 5-Network Adequacy concerning network sufficiency, how network sufficiency is to be determined and who is to determine network sufficiency. The revisions also add a new section concerning provider directories. This section describes what information must be included in both print and electronic directories to help consumers select a health benefit plan. It also includes a requirement for health carriers to periodically audit their provider directories for accuracy.
The Model #74 revisions also include a new section, Section 7-Requirements for Participating Facility Providers with Out-of-Network Facility-Based Providers. This section addresses a narrow aspect of the so-called “surprise bill” issue by establishing a mechanism for consumers to deal with bills they received for services provided by out-of-network facility-based providers while receiving treatment at an in-network facility. Section 7 also includes a provider mediation process for payment of out-of-network facility-based provider remittances for those providers who object to the amount of the payment they received for the out-of-network services they provided using the established payment rate. The Model #74 revisions also add a specific new section concerning provider directories. This new section establishes requirements for health carriers concerning the specific information that must be included in the directories for health care professionals, hospitals and other types of facilities to assist consumers in selecting a health benefit plan. It also includes requirements for carriers to help assure the accuracy of the directories, including a periodic audit requirement.
The revisions reflect compromise among all of the participating stakeholders. They also reflect some consensus among the stakeholders, such as the new provision on provider directories and additional provisions enhancing consumer transparency and disclosure. Ultimately, the revisions are a major improvement from the model's 1996 version and reflect the changes in the health insurance marketplace, including changes in health plan network designs, since 1996 while providing the necessary flexibility that each state will need in determining network access and adequacy for its consumers. Model #74 establishes strong standards for network adequacy, while balancing the need for states to establish specific standards that are effective for their markets and geography.
Final Federal Benefit and Payment Parameters Rule for 2019
Recognizing that many states already have strong standards in place and others will consider the best way to improve their oversight based on the updated NAIC Model, the HHS Notice of Benefit and Payment Parameters for 2019 final rule released on April 9, 2018, includes CMS standards for issuers and Exchanges, generally for plan years beginning on or after Jan. 1, 2019, providing clear authority to the states to determine network adequacy in their QHP certification reviews. In its QHP certification standards, the CMS is returning important oversight authority back to the states by expanding their role in the QHP certification process for Federally-Facilitated Exchanges (FFEs). The CMS will continue to defer to the states' reviews of network adequacy provided the state has a sufficient network adequacy review process for plan years 2019 and beyond. The CMS had previously introduced this approach in the Market Stabilization rule, however, it only impacted plan year 2018.
In addition, the CMS is eliminating requirements for State-Based Exchanges using the Federal Platform (SBE-FPs) to enforce FFE standards for network adequacy and essential community providers. Instead, the CMS is allowing SBE-FPs the flexibility to establish their own standards, which the CMS believes will further empower SBE-FPs to use their QHP certification authority to encourage issuers to stay in the Exchange, enter the Exchange for the first time, or expand into additional service areas.