By Ashley A. Noble
Insurance carriers use provider networks to better manage their business and to help control costs by limiting the providers that patients may visit.
Patients’ insurance premiums typically vary based upon the size of a carrier’s network. For example, one insurance carrier may have a narrow network, one with relatively few providers who are eligible for reimbursement from the carrier. In such a network, a patient who chooses to visit a provider not covered under his or her insurance plan will pay more to see that out-of-network provider than a network provider.
Narrow networks may pose challenges for patients, such as difficulty finding a provider in their area who is covered within their insurance plan’s network. A patient also might find that the provider is in high demand, making it difficult to get an appointment.
Federal law requires that most commercial health insurance plans have “adequate” networks of providers. According to the Commonwealth Fund, Marketplace plans must maintain “a network that is sufficient in number and types of providers” so that “all services will be accessible without unreasonable delay,” and are required to disclose their provider directories to the marketplace for online publication.
What constitutes “adequate” or “sufficient,” however, is not explicitly defined under federal law.
States have regulated provider network size and scope—popularly known as network adequacy—since at least the 1990s, and at least 38 states and the District of Columbia have laws addressing this issue.
The Commonwealth Fund’s recent report, “Implementing the Affordable Care Act: State Regulation of Marketplace Plan Provider Networks,” examines states that have developed quantitative standards to define what makes a network “adequate.” Examples of such criteria include, but are not limited to, the provider-to-patient ratio, the number of providers in a geographic area, and the distance or travel time necessary to reach a provider.
The report points out that 27 states “had rules requiring at least some network-based marketplace plans to satisfy one or more quantitative measures of sufficiency. These standards took different forms. Most frequently, states specified the maximum amount of time and/or distance an enrollee must travel to access covered services. Twenty-three states had such requirements in place at the start of 2014, including New Jersey, which obligates its managed care plans to have available at least two primary care physicians within 10 miles or 30 minutes driving or public transit time of 90 percent of its enrollees.”
The report also identifies 21 states that use qualitative standards to determine network adequacy. Such standards incorporate language like “sufficient,” “adequate” and “reasonable.”
States continue to contend with this issue. In 2015, six laws related to network adequacy went into effect in five states, including California, Minnesota, Texas, Washington and West Virginia. Montana and Oregon also enacted laws that will go into effect in 2016 and 2017, respectively.
NCSL maintains a Web page devoted to network adequacy laws, as well as a Health Systems Innovations database, new in 2015, that tracks a number of topics, including, but not limited to, enacted network adequacy legislation.
Ashley A. Noble is a policy associate in NCSL's Health Program.
Map courtesy of the Commonwealth Fund