State health insurance officials and industry stakeholders are on the brink of approving model legislation to standardize the network adequacy of health plans. But the fate of that legislation hangs on the priorities of 50 very different state legislatures.
The National Association of Insurance Commissioners has been working on updates to its Health Benefit Plan Network Access and Adequacy Model Act for more than a year. That document, which hasn't changed much since its inception in 1996, functions as a template for states to follow. NAIC members will vote on the final draft at their national meeting on Nov. 22.
Insiders believe states with lax or nonexistent guidelines will use the NAIC model to craft their own legislation when they reconvene next year, whether their state is run by supporters or opponents of the Affordable Care Act. The CMS is also expected to follow the model NAIC framework for its 2017 proposed health plan benefit rule, which is expected later this month.
“I've heard that states ... take these NAIC model legislation pieces very seriously, even states that have lots of differences politically,” said Katherine Hempstead, health insurance director at the Robert Wood Johnson Foundation.
“This isn't really a partisan issue,” said Claire McAndrew, private insurance program director for the pro-ACA group Families USA, adding that voters are urging action on the legislation.
The NAIC began examining its network adequacy guidance last year when narrow networks became commonplace as a way to make plans more affordable. Narrow networks limit the number of providers available to their members at in-network rates. Members who want a broader selection of providers must pay more to use them.
But narrow networks also have confused patients and limited access to necessary specialties. In some cases, the networks have led to exorbitant out-of-pocket expenses. Balance billing, in which out-of-network providers charge patients for whatever their health plans don't cover, is a budding national issue. It's especially problematic when patients see physicians at an in-network facility, but are unaware that the physicians themselves are out-of-network.
The ACA set some federal requirements for networks, although they are left up to interpretation. All health plans sold on the exchanges must have sufficient and diverse providers “to assure that all services will be accessible without unreasonable delay.” ACA-compliant plans must include at least 30% of essential providers in their networks and update their provider directories monthly. But the ACA did nothing to ban or limit balance billing.
Correcting and updating plan information has been the lowest-hanging fruit for states, some of which have taken action. This month, California fined Blue Shield of California and Anthem Blue Cross for misleading consumers with error-laden provider directories.
“Their networks are tighter and more intentional now,” Hempstead said of insurers in general. And that “puts more responsibility on the carrier to say, 'Yes, I do know who's in my network.' ”
Twenty-seven states, including California and New York, already have network rules in place that are stricter than the federal guidelines, according to Jeremy Earl, a healthcare attorney at McDermott Will & Emery. They have quantitative, measurable standards such as maximum travel times or distances to a certain provider. Others have maximum appointment wait times or provider-to-enrollee ratios.
The NAIC draft does not mandate those types of criteria, instead leaving them up to state insurance regulators. It's expected consumer advocates will push regulators to adopt them.
“It's understandable that the standards would be different, but we still think a standard should be in place,” McAndrew said.
Other major components of the NAIC model law include a process for balance billing and tiered-network justification. In both emergency and non-emergency situations, the NAIC recommends holding patients harmless for unexpected bills. Instead, insurers and providers could work out terms through arbitration. New York enacted a similar process this year. Insurers must also explain the criteria for tiered providers. Providers who don't get into preferred tiers say they don't know how those decisions are made, Earl said.
It's unclear how many states will fully adopt the NAIC proposals, said Richard Cauchi, health program director at the National Conference of State Legislatures. Forty-six state legislatures will be back in session early next year, and some states could act quickly. Legislators in Colorado, for instance, meet for only 120 days, so their work is usually wrapped up by May. But Montana, Nevada, North Dakota and Texas state lawmakers will not convene in 2016.
The states most likely to act quickly will be those fielding public input, McAndrew of Families USA said. Florida and Pennsylvania, both large swing states, have hosted forums on network adequacy and surprise medical bills.
Eileen Bourey, a Pennsylvania resident, participated in her state's hearing last month. She said her son Andrew sought treatment for his injured ankle earlier this year, and he received more than $1,000 in unexpected bills even though he thought his care was within his insurance network.
“This is undeserved hardship for citizens who are trying to ask the correct questions upfront,” she said in written testimony.