Providers, advocates seek tougher rules on network adequacy

(This article has been updated with a correction.)

Many healthcare stakeholders want more muscle from state insurance commissioners' efforts to help states police how health plans assemble and manage their provider networks.

The National Association of Insurance Commissioners is circulating a draft model state law (PDF) addressing increasingly fractious practices. Providers and consumer advocates have generally applauded the effort but plan to press for the document to propose more stringent standards regarding provider directories, out-of-network billing and what constitutes an adequate provider network.

Controversies over provider networks have erupted across the country since the rollout of the exchanges, where consumers must choose health insurance plans from an often complicated menu of options with different premiums, cost-sharing amounts and networks.

The NAIC's model law has not been updated for nearly two decades. The proposed update is the result of weekly meetings involving dozens of interested parties since May. If eventually adopted by state legislatures, the rules would apply to all health plans.

“The Patient Protection and Affordable Care Act standardized many aspects of insurance coverage, including essential benefits and tiers of coverage. But it didn't do much to address the adequacy of provider networks, which makes the actions of state legislators and regulators crucial to providing consumer protections,” said Lynn Quincy, associate director for health reform policy at the watchdog organization Consumers Union.

“The big dimension that remains unstandardized and opaque to consumers is the provider network,” Quincy said. “It's like a big missing piece of the puzzle.”

The growing presence of narrow-network plans designed to attract price-conscious shoppers through low premiums has raised concerns that consumers might unwittingly purchase products that don't meet their care needs.

“We're seeing the tip of the iceberg,” said Jan Kaplan, associate director for policy analysis at the Children's Hospital Association. “We haven't seen a huge problem yet, but we can see how the market seems to be trending.” Children's hospitals and other specialty providers such as cancer centers have been particularly frustrated by difficulties in reaching what they view as fair terms under which they can be included in the networks of popular plans.

The NAIC is seeking comments about the draft model law until January 12. The process is not expected to be completed until well into next year.

“The NAIC is to be commended for their open public process involving all kinds of stakeholders,” Quincy said. “When you're using a process like that, you tend to get a fairly conservative product because you're trying to make all your stakeholders happy.”

Consumer advocates and providers are pushing for the tougher model legislation on several specific fronts. The draft states that health plans must maintain networks that provide customers access to all medical services without “unreasonable delay.”

But it provides no measurable standards for defining that threshold and leaves it up to the plans themselves to come up with the criteria, noted Stephanie Mohl, senior government relations adviser for the American Heart Association. “You could have very broad differences in how different insurers within a state are interpreting what is an adequate network,” said Mohl, who also serves as one of the NAIC's appointed consumer representatives.

Lee Spangler, vice president for medical economics at the Texas Medical Association, raises a similar concern. “Those reasonable criteria can differ from plan to plan to plan to plan,” Spangler said. “I don't really know what I'm purchasing.”

The accuracy of provider directories is another area of concern for providers and consumer advocates. That issue was highlighted by a recent investigation by the California Department of Managed Health Care the California Department of Managed Health Care of provider directories for exchange plans maintained by Anthem Blue Cross and Blue Shield of California. It found that a significant number of doctors listed in the directories weren't actually accepting new patients and that many provider locations were inaccurate.

A recent survey of state regulators (PDF) conducted by NAIC consumer representatives found that only about one-third of states require that provider directories for preferred provider organization plans be updated on a regular basis. It also found that states rarely enforce regulations on network adequacy. Regulators in just four states indicated that they typically take action against more than one plan each year for violations of state rules regarding network adequacy.

The draft model law requires that health plans maintain provider directories, both online and in print, and that they are updated at least monthly. It also requires them to provide access to directories to individuals with limited English-language proficiency or disabilities.

But some interested parties would like to see that provision strengthened. Consumer advocates seek a requirement that information about different tiers of providers—which will impact how much a consumer is billed—be disclosed in the directories. They'd also like to see protections for consumers have used inaccurate provider directories to make coverage decisions, such as allowing them to change plans outside the open-enrollment period.

The Children's Hospital Association would like the model law to specifically require that provider directories indicate whether a facility is a children's hospital or not. In the past, that has sometime been unclear. “People don't understand that children's healthcare is different,” Kaplan said. “They understand if they've got a kid who's sick.”

Another area of concern is “balance billing.” That practice occurs when consumers seek services at a hospital that's part of their provider network, but end up receiving treatment from physicians that are out of network. That can result in substantial surprise bills that patients thought would be largely covered by insurance. The survey by NAIC's consumer representatives found that less than half of states have any rules for balance billing.

The American Heart Association's Mohl said they'd like to see a requirement that at least physicians employed directly by the hospital and emergency room doctors be included in the provider networks. “When it's an emergency, the consumer literally has no choice what hospital they go to and who they're seen by in the emergency room,” Mohl noted.

Follow Paul Demko on Twitter: @MHpdemko

(This article has been updated to correct Lynn Quincy's name.)