The Next Big Thing in Network Adequacy: The NAIC Model Act

Update: On November 22, 2015, the NAIC voted unanimously to adopt its updated Network Adequacy Model Act. Read our summary.

In November, the National Association of Insurance Commissioners (NAIC), the organization composed of insurance regulators from every state in the nation, will finalize a model law to help states ensure that consumers can get access to the right health care, at the right time, without unreasonable delay. Dubbed the Network Adequacy Model Act, this draft bill is designed to be used by any state to enact provider access standards for private health insurance plans. Here’s a rundown of what the act includes, how consumer advocates hope it will improve, and when it will be complete.

Model act update is first in 10 years

It’s been 10 years since the NAIC updated the model act on network adequacy, first drafted in 1996. The organization has been hard at work on this update, via conference calls and in-person meetings, for over a year now. The NAIC determined the update was necessary because health plan network designs have evolved significantly since 1996, resulting in many new and different consumer issues that the law must now take into consideration.

Scheduled to be finalized in November, the act should therefore be ready for states to use as a model during their 2016 legislative sessions. It can also provide crucial guidance for the U.S. Department of Health and Human Services as it sets 2017 standards for marketplace plans.

Consumer protections in the NAIC Network Adequacy Model Act

The updated NAIC Network Adequacy Model Act makes progress in a number of important areas related to creating adequate provider networks. The Consumer Representatives to the NAIC, which include this author and a number of other consumer and patient representatives, have expressed strong support for the network adequacy protections that are included in the most recent version of the model act.

Through our formal role, providing input on behalf of health insurance consumers during NAIC calls and meetings, and in a recent letter to the NAIC network adequacy subgroup, we support specific provisions including the following:

• Protections against “surprise medical bills” (also known as balance bills) for emergency and planned services at in-network facilities when care is delivered by out-of-network providers.
• Requirements that the state insurance commissioner, not each individual health insurance plan, will determine if provider networks are adequate.
• Standards for the accuracy of provider directories, such as those included in Families USA’s recent issue brief, that allow the public to report directory inaccuracies to health plans and require insurers to periodically audit their directories.
• Continuity of care protections for enrollees who are in the middle of an active course of treatment, if their providers leave or are removed from their health plan’s network.

It is important that all of these protections remain in the act as it advances through the NAIC’s approval process.

Areas where the NAIC Model Act should improve

Consumer Representatives recommend that, before the NAIC finalizes the model act, it addresses the following outstanding issues to ensure sufficient network adequacy protections for consumers:

• The model act should not simply allow, but should require, states to enact specific quantitative standards by which they will measure network adequacy. States could determine which standards are most appropriate for their specific state. These could include standards such as those for travel time, distance to providers and facilities, and appointment wait time standards.
• For the “access plans” that describe how insurers will achieve network adequacy, the model should require that regulators actively approve these “access plans.” This will require that networks are determined to be adequate before plans are sold to consumers, instead of merely requiring insurers to passively file access plans with insurance regulators.
• Consumer Representatives are pleased that the model act defines tiered networks and calls for some increased transparency regarding such networks. However, the final act should include a requirement that consumers have adequate in-network access to all covered services through providers in the lowest cost-sharing tier in any plan that uses a tiered network.
• The model should strengthen the continuity of care protections to provide greater certainty and a longer transition period for consumers actively undergoing treatment for life-threatening or serious physical, mental, or behavioral conditions.

Using the NAIC Network Adequacy Model Act

Once the NAIC Network Adequacy Model Act is released in November, state and federal policymakers should scrutinize it carefully to assess how they can use it to build on the foundation of existing laws. For certain network adequacy issues, they may find the language of the act fits exactly the needs of consumers and regulators. For others, they may need to add stronger protections or greater specificity to the language to ensure that consumers have access to providers who can deliver all needed services that their insurance plan covers.

Families USA will be available to provide assistance to advocates, states, and policymakers as they work through these critical issues and strive to make health care more accessible to consumers.

Families USA would like to recognize the leadership of NAIC Consumer Representative Stephanie Mohl, American Heart Association, in advocating for consumer needs throughout the Model Act update process.