Three Steps for Monitoring and Enforcing Health Insurance Provider Network Protections

Much like a cell phone, an insurance plan is only as good as its network. Protections enacted at the federal and state levels are an important step toward strengthening private insurance provider networks. The Affordable Care Act created the first-ever provider network protections for private insurance consumers. These protections require health insurance marketplace plans to have adequate networks to meet their enrollees’ medical needs in a timely manner. In addition, many states have enacted laws or regulations that outline more specific requirements for network adequacy in private insurance plans. These protections should be strengthened at the federal and state levels to ensure that private insurance consumers everywhere have legal rights to adequate networks once they enroll in coverage.

But while it is important to have these protections in place, it is just as important to make sure that insurance companies comply with these protections and that there are enforcement mechanisms for cases when insurers do not comply. Without adequate mechanisms to monitor and enforce compliance, states and the federal government will find that their network adequacy laws or regulations end up being well-intended protections that do little to improve network adequacy.

To make sure that network adequacy protections achieve their goals, states and the federal government should take three key steps:

1. Assess and Enhance the Capacity of Regulators

One common reason for insufficient monitoring and enforcement of network adequacy standards is that the applicable regulatory agencies lack staff or other resources. For example, regulators may have the capacity to respond to individual consumer complaints, but if they receive enough complaints to indicate that there could be an overarching problem, they may not have the capacity to mount comprehensive reviews of plans’ networks. Having this capacity is critical to ensuring that all consumers have access to adequate networks.

States and the federal government should assess the capacity of the responsible regulatory agencies to determine whether they have sufficient staff and the financial and technological resources they need to monitor compliance and to take action when networks are found to be problematic. If governments find that capacity is lacking, they should launch efforts to ensure that these agencies have the resources they need to adequately serve consumers.

2. Strengthen Monitoring of Network Adequacy

Having specific network adequacy requirements in place is critical to ensuring that consumers have access to health care providers and facilities. But without formal monitoring, it is difficult to know whether insurers are complying with these requirements.

Regulators should formally check insurers’ compliance with network adequacy requirements using up-to-date information on each plan’s provider network. They can even arrange for “secret shopper studies” that test plans’ provider directories to assess whether providers’ contact information is accurate, whether the providers listed are really in the network, whether those providers are accepting new patients, and when the earliest appointments with providers are available, among other factors.

Recognizing how important it is to rigorously monitor compliance, California passed a new law this year (SB 964) that requires all plans regulated by the Department of Managed Health Care (including HMOs and many PPOs) to annually report standardized information on network adequacy and timely access to care in their networks. The department will use this information to check plan compliance with the state’s quantitative standards for network adequacy and timely access and publicly report its findings.

3. Improve Enforcement

When a regulator finds a plan to be out of compliance with network adequacy requirements, it should first notify the plan of the issue and provide the plan with an opportunity to correct the problem. After all, a regulator’s goal should be to have an insurance market that is highly functional for plans and consumers alike, and giving plans the opportunity to fix problems as quickly as possible so that they can continue serving consumers is the best way to achieve this. If the plan does not sufficiently address the problem, the regulator should consider more intensive actions.

Enforcement mechanisms that regulators can use with plans that fail to correct network deficiencies include:

• Financial penalties: Most insurance regulators have the legal authority to levy fines on insurance companies that violate insurance laws or regulations, including those that pertain to network adequacy.
• Restricting the plan’s service area: Regulators could restrict the geographic areas in which a plan can sell policies to zip codes where the plan has a sufficient number and variety of providers that are located within a reasonable distance, and they can keep these restrictions in place until the plan fixes its network deficiencies in the areas where there have been problems.
• Restricting the sale of new policies: Regulators could prohibit a plan from accepting new enrollees entirely until the plan corrects its network deficiencies and can provide access to all covered services in a reasonable and timely manner to current enrollees.

As enrollment in the health insurance marketplaces continues to grow, it is essential that marketplaces and their insurance department partners increase their focus on ensuring that plans meet enrollees’ needs. One critical component of that effort is making sure that health plan networks are sufficiently robust so that enrollees can get the right care at the right time, without traveling too far. Marketplaces and insurance departments must make this expectation clear to insurers, must monitor insurers’ compliance, and must fully enforce network adequacy standards so that consumers’ rights to care are upheld.