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November/December 2015 St@teside

NAIC's Network Adequacy Model Act

Last month, the National Association of Insurance Commissioners (NAIC) finalized a model act that is meant to ensure consumers have timely access to appropriate care. For nearly two years, the NAIC had been working to update the standards related to network adequacy for health insurance companies, which had not been significantly updated since they were first drafted in 1996. The model legislation is an important tool for states to use to frame their own laws regarding access to care. However, with the advent of the Affordable Care Act (ACA), the model act needed a major overhaul to reflect the standards that health plans must implement and regulators began to oversee in 2014.

As the development and use of limited networks has become a common way for health plans to keep down premium costs, it is increasingly important to ensure that the right amounts, distribution, and types of providers are available to consumers, and that state regulators have the tools available to enforce the criteria they set. The NAIC model outlines and enhances these capabilities, which previously only applied to managed care plans. Among the updated provisions, the model now addresses telemedicine, tiered networks, and “surprise bills,” which occur when a patient receives care at a participating hospital but is treated by a non-participating doctor. In addition, the model act requires carriers to notify patients when they may be accessing non-network care, as well as requires carriers to regularly update their provider directories and periodically audit them for accuracy.

The Centers for Medicare and Medicaid Services (CMS) likewise has recognized the importance of addressing the adequacy of provider networks. In its recent proposed rule, which outlines the benefit standards for 2017 plans, CMS references the NAIC model and notes that states should enforce network adequacy standards for exchange plans. But they also intend to develop specific minimum criteria that limit the time and distance to providers and a minimum ratio of providers to covered persons for certain specialties.

Ultimately, consumers need to be able to get the care they need, when they need it. State oversight of network adequacy is key to ensuring consumers and patients have access to treatment, especially when the health plan they can afford may include fewer doctors and hospitals.