Exceptional Attention on Adequacy: Regulators Respond to Narrow Network Health Plans
On November 22, 2015, after more than a year of deliberations, the National Association of Insurance Commissioners (NAIC) approved a new model law for regulating health plan provider networks. The new model law, the first update in a generation, challenges states to regulate health insurers in new ways, including assuring that: 1.) provider directories are accurate, 2.) health plan provider networks consider the needs of special populations, and 3.) health insurers mediate billing disputes that arise when non-network physicians work within network facilities.
The model law, of itself, does not change the conduct of any particular state regulator. Some states have already moved in the directions noted above. But the model law puts pressure on states to re-examine and, perhaps, strengthen the regulation of health plan provider networks. The new Network Adequacy model is largely in response to a trend in the health insurance industry toward "narrow network" health plans which limit provider choice for members in an attempt to hold down costs and drive members to high value providers.
One area where the NAIC ultimately decided not to act was with regard to endorsing particular standards or methods for measuring network adequacy. However, concurrent with the NAIC's move, the Centers for Medicare and Medicaid Services (CMS), in its role as the administrator of the federally-run Health Insurance Exchanges, issued draft regulatory text on that topic. CMS proposes to publish annual standards and/or methods for measuring network adequacy. If a state chooses not to meet or exceed CMS's standards, CMS will measure provider networks itself. Comments on the draft regulation are due December 21, 2015.
The model law and corresponding CMS regulation show us that the narrowing of health plan networks has reached a point that a critical mass stakeholders — patient advocates, providers and some regulators — coalesced to push back. While NAIC model and CMS regulation focus on commercial market health plans, similar narrow network checks are underway in the Medicare Advantage and Medicaid markets. But for all the concern about narrow networks, current research suggests similar member satisfaction and quality in narrow and non-narrow plans. In the long run, the primary positive impact of the regulator attention might be on network transparency, rather than network adequacy — as more accurate provider directories and researcher-driven comparative network analyses offer increasingly savvy consumers better information when selecting a health plan, with or without strict regulatory standards.
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