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Short Analysis
June 2016

Medicaid Managed Care Rule: Network Adequacy Standards

Recently the Obama administration released standards for the operation of Medicaid managed care plans. This is the final analysis in a series looking at what advocates should know about the new standards. The series is part of an ongoing Families USA initiative to help advocates influence how these standards are implemented in the states.

The first analysis explained changes to the enrollment process. The second addressed the requirement that states establish a quality rating system and implement delivery reforms.

Here we focus on aspects of the rule affecting people’s access to health care and the adequacy of Medicaid managed care plan’s provider networks.

New rules make progress toward more adequate provider networks in Medicaid managed care

The new rules governing network adequacy, which states must implement by 2018, are a step in the right direction toward ensuring that people with a Medicaid managed care plan can see the right health care provider when they need to. A significant—and welcome—change in the new rules is the requirement that states set “time and distance” standards for certain types of providers.

Time and distance standards limit how long and/or how far an enrollee has to travel in order to get to a specified type of provider. They are a common metric for measuring the adequacy of a plan’s provider network. Time and distance standards are currently used in both the private market and the Medicare Advantage program.

What does it mean to have an “adequate” provider network? In order to get care through a private Medicaid managed care plan, enrollees must see a provider that participates with their plan. The group of providers—doctors, hospitals, pharmacies, therapists, home health aides, etc.—that participate with a plan is called a “network.” When a network is inadequate, patients may have to travel long distances or wait a long time to get care. In the worst case scenario, enrollees may not be able to get the care they need.

Previous rules did not do enough to ensure access to care

The current rules governing Medicaid managed care provider networks have not been sufficient to guarantee enrollee access to care.  They require plans to maintain a provider network “sufficient to provide adequate access” to all covered services, taking into account number, type, and geographic distribution of providers, among other factors.

However, states were not required to set quantitative standards for access—like time and distance standards or appointment wait time standards—although many have.

In recent years, there have been well-documented problems related to enrollees’ ability to obtain access to care in Medicaid managed care programs across states. A 2014 report by the HHS Office of the Inspector General found long wait times to see doctors, inaccurate plan information, and inadequate network adequacy standards. Notably, even when states did have good standards for Medicaid managed care provider networks, many states failed to enforce those standards.

Advocacy will be important in establishing strong standards for network adequacy

Setting strong time and distance standards for various provider types is the first step to ensuring that enrollees have access to care. The new rule does not tell states what the standards must be. Rather, states are left to determine how long and/or how far enrollees should be expected to travel to get to an in-network provider.

Following are the categories of providers for which states must set time and distance standards under the new rules:

  • Primary care (adult and pediatric)
  • Specialty care (adult and pediatric)
  • Behavioral health (including substance use disorder treatment) providers (adult and pediatric)
  • OB/GYN
  • Hospital
  • Pharmacy
  • Pediatric dental
  • Long-term services and supports (LTSS) that require the enrollee to travel to the provider
  • Additional provider types as deemed necessary by CMS

The rules require states to take into account a number of factors when setting their time and distance standards, including:

  • Anticipated Medicaid enrollment
  • Expected utilization of services
  • The characteristics and health care needs of specific Medicaid populations covered by the plans
  • The number and types (in terms of specialization, training and experience) of network providers
  • The number of network providers who are not accepting new patients
  • The geographic location of network providers
  • The ability of network providers to communicate in non-English languages
  • The ability of network providers to ensure accessible, culturally competent care to people with disabilities
  • Use of telemedicine or similar technologies

States can set different standards for the different categories of providers. For example, a state may require someone to travel farther to see a specialist than a primary care physician. They may also vary the standards based on geography. Many states already have some sort of time and distance standard in place for Medicaid managed care, although most do not include all the provider types listed in the rule.

Advocates should get involved to make sure their state has the most robust managed care networks possible. 

Advocates should push for other standards beyond time and distance

While working with the state to set time and distance standards as required by federal rules, advocates can also lobby for other quantitative measures of access to care not specifically required by federal rules that will further ensure Medicaid managed care beneficiaries can see the right provider at the right time.

Appointment wait time standards, another common metric for determining access, are a good way to ensure that enrollees are able to get the care they need when they need it.  Many but not all states have appointment wait time standards for primary and specialist care needed on a routine or urgent basis. States can extend and enhance appointment wait time standards to cover all categories of providers listed by the rule.

New rules do little to enhance federal oversight and accountability for managed care plans

In order to make sure network adequacy standards are meaningful, states must hold plans to the standards and demand corrective action if they fail to meet them. Unfortunately, the new rules do little to enhance federal oversight and accountability for managed care plans.

States, and not the federal government, remain the most important player in the enforcement of managed care network adequacy standards.

The best way to determine whether plans are meeting network adequacy standards are through direct tests—like secret shopper calls and visits to providers listed in plan directories. Direct tests were a key recommendation from the Office of the Inspector General in 2014 when it investigated Medicaid managed care provider network adequacy in 33 states.

Additionally, enrollees should be given the right to see an out-of-network provider if they can document that they are unable to find an in-network provider that meets state time and distance, appointment wait time, and other quantitative standards. This will ensure that enrollees are able to get the care they need, while simultaneously incentivizing plans to maintain robust networks.

States can go above and beyond new federal rules to ensure all Medicaid enrollees can see the right provider at the right time. The Medicaid managed care rules are a step in the right direction, and advocates can use them as a jumping off point for broader efforts to improve network adequacy standards and their enforcement in their state.