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.
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. States have addressed this issue by enacting laws to ensure that provider networks are of “adequate” size.
State policymakers face questions caused by the ongoing need to balance the interests of insurers who may want to achieve limits on costs and exclude low performers, the interests of providers, such as physicians, clinics, and hospitals, who seek the right or choice to treat patients needing their services, and the interests of patients, who often prefer, or medically need, a choice of providers, or the ability to use a particular provider.
The Affordable Care Act
The establishment of Health Benefit Exchanges, also termed Health Marketplaces, by the Affordable Care Act of 2010 (ACA) has renewed the examination and policies set by state and federal law. The ACA requires that all “Qualified Health Plans” include an “adequate network of primary care providers, specialists, and other ancillary health care providers.”
The ACA requires the Secretary of the Department of Health and Human Services (HHS) to establish criteria for the certification of health plans as Qualified Health Plans (QHPs) to be offered on a state’s Health Insurance Exchange.* These criteria include requirements to:
- Ensure a sufficient choice of providers;
- Include essential community providers in accordance with 45 CFR § 156.235;
State Laws Related to Access to Healthcare Providers Network Adequacy
Several recent state statutes specific to exchanges set standards or definitions related to network adequacy – see examples in California, Connecticut, Hawaii, Washington and the District of Columbia. A list of network adequacy statutes in 21 states and D.C. follows in the chart below. At least 10 states had enacted and operational laws prior to the 2010 ACA.
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- Ensuring Consumers' Access to Care: Network Adequacy State Insurance Survey Findings and Recommendations for Regulatory Reforms in a Changing Insurance Market. A report by National Association of Insurance Commissioners (NAIC), November 2014.
- Narrow Networks Enjoying a Resurgence - Two decades after a consumer backlash drove many health maintenance organizations out of business, narrow provider networks are back in a big way. Article published by HealthLeaders Media, 12/16/2014
- Massachusetts Limited Network Plans - posted by Massachusetts Executive Office for Administration and Finance. This website discusses the benefits of limited network health plans for state employees. December 11, 2014.
- Narrow Provider Networks in New Health Plans: Balancing Affordability with Access to Quality Care - Georgetown University Center on Health Insurance Reforms and Urban Institute, June 2014
Narrow networks contain a smaller number of providers and in-network facilities than traditional provider networks, typically resulting in lower premiums. This paper assesses the benefits and risks of a range of policy and regulatory options available to federal and state policymakers on these narrow networks. The development, review, and oversight of health plan networks involves trade-offs between premium costs and consumers’ access to and choice of providers. This paper makes clear that there is no current regulatory approach that can satisfy all stakeholders, but with the right balance between consumer choice and cost containment, consumers can receive quality care at an affordable price through narrow networks.
Washington State Narrow Network Lawsuit Takes Odd Turn - A lawsuit over whether health insurance carriers’ provider networks were adequate has screeched to a halt following accusations of impropriety within the Washington State Office of the Insurance Commissioner, headed by Mike Kreidler (D). One of the insurers, Premera Blue Cross, subsequently filed a motion to vacate all of Administrative Law Judge Patricia Petersen’s decisions, which could result in Seattle Children’s Hospital starting all over again in its case... "The case is about network adequacy standards, which are “pretty vague,” More specifically, he says, such narrow-network cases are “really about money.…The problem becomes when,” for example, including Seattle Children’s in a network increases premiums $10 to $15 for everyone." Posted by Health Business Daily, 7/7/2014
"Anger over narrow networks" - Anger over limited choice of doctors and hospitals in Obamacare plans is prompting some states to require broader networks — and boiling up as yet another election year headache for the health law. "So far, just a handful of states have moved to ratchet up their standards. They’re mostly blue states that built their own Obamacare exchanges, including Connecticut, New York, Washington and California. But since the beginning of 2013, more than 70 bills have been introduced in 22 states to clarify the network rules, according to the National Conference of State Legislatures." Article posted by Politico, 7/22/2014, at http://www.politico.com/story/2014/07/obamacare-health-care-networks-premiums-109195.html
- ACA Implications for State Network Adequacy Standards. The Robert Wood Johnson Foundation, August 2013.
- Network Adequacy & Exchanges White Paper. NCQA, February 2013.
- Feds might object to any state law forcing a insurer, hospital into contract. The Pittsburgh Gazette, December 2013.
- Narrow Networks’ Trigger Push-Back From State Officials. Kaiser Health News, November 2013.
- Impact of National Health Reform and State-Based Exchanges on the Level of Competition in the Nongroup Market. The Robert Wood Johnson Foundation, June 2013. The report is available for download in PDF form here.
- Bills target insurance, health care. The Concord Monitor, October 2013.
- Turns Out Obamacare Is Going to Limit Your Choices. Bloomberg News, September 2013.
Author: This material was researched and compiled by Ashley Noble, NCSL Policy Associate with the Health Program in Denver.