The American Medical Association has joined forces with more than 115 health care groups to urge the National Association of Insurance Commissioners (NAIC) to address several key issues as it puts together a final model regulation on network adequacy that will affect exchange and other insurance plans. The AMA, Children’s Hospitals Association and other national and state-level provider and consumer groups such as First Focus ask NAIC to ensure that regulators use appropriate quantitative standards, patients have access to a full range of age-appropriate care, provider directories are accurate and issuers are transparent in their provider selection standards.
The NAIC, which held its annual meeting in DC this month, has been working for months on a proposal to update the 1996 Managed Care Plan Network Adequacy Act. The works comes as stakeholders and lawmakers raise concerns about a trend towards increasingly narrow networks, in exchange and other plans, and high-cost drug formulary tiers.
“We recognize that there is already broad regulator support for these concepts, and we appreciate that the NAIC has been deliberative in hearing from all interested parties,” the groups write in a Nov. 16 letter to Sandy Praeger of Kansas and Theodore Nickel of Wisconsin, the chair and vice chair of the NAIC task force that has been developing the new model regulations.
“By adopting provisions consistent with the priorities outlined in this letter, we believe lawmakers and regulators can adapt the Model Act to establish reasonable, meaningful standards, while still allowing for market flexibility and choice,” they add.
NAIC is taking comments on the draft model until Jan. 12, 2015, a source tracking the process says.
The letter comes shortly after AMA approved a policy that calls for network adequacy and transparency. Among other policies, the doctors group says that issuers should terminate any providers without cause prior to open enrollment in order to mitigate inaccurate directors. Providers could be added at any time, AMA’s policy says. The doctors group also calls for insurers to ensure that consumers do not pay more for out-of-network providers if there is not an adequate number of providers in-network,and says that issuers should be required to report quarterly on several network adequacy measures.
“While plans with narrow networks may have lower patient premiums, some narrow provider networks on the market today provide inadequate access to timely, convenient, quality care,” AMA President Robert Wah said of the new policy. “Inadequate networks could prevent patients from being able to see the physicians that they know, trust and depend upon throughout their lives which could lead to interruptions in care, delayed care and undue harm. They can also prevent patients who are newly insured from being able to access the physicians that suit their needs in a timely manner. As enrollment opens for health insurance exchanges, patients deserve to have an honest look at their coverage options — including the physicians, hospitals and medications they will have access to as well as cost-sharing – so that they can make an informed choice,” he said.
In the Nov. 1 letter to NAIC, AMA and the other groups say that health plans must be able to demonstrate they offer access to a full range of pediatric and adult providers for all covered services, from primary care to specialty and sub-specialty providers for more complex needs. The groups also say that NAIC should incorporate several types of quantitative measures for regulators to determine adequacy, but allow regulators to adapt thresholds that are best for their own state. The act sure should call for broad usage of the measures “as no individual measurement is likely to ensure access, and in fact, if used alone, may provide a false assessment of adequacy.”
The groups also write that they are extremely concerned about a reliance on the appeals process as a remedy for networks so narrow that patients must go out of network to get covered services. Such a reliance does not reduce costs, but rather leaves “consumers at risk of delayed and fragmented care and providers with additional administrative costs, all of which increase the overall costs of care,” the letter states.
NAIC should require that all networks meet or exceed adequacy requirements, that consumers only pay in-network cost-sharing if forced to go out-of-network due to lack of providers, and that plans show that they have an adequate approval process for out-of-network services, use appropriate clinical standards in evaluating requests and have an appeals process for any denied services, the groups say.
The groups also say that while they recognize the need for insurers to have flexibility to incentivize physicians and other providers to contract in good faith, they worry that allowing issuers to pay non-contracted providers deeply discounted, non-negotiated rates to remedy inadequate networks will not protect consumers.
“In fact, this practice may have the unintended consequence of encouraging insurers to create inadequate networks in the first place,” they write. “Therefore, when there is an inadequate network, we believe that payers should be required to reimburse providers the reasonable and customary value for out-of-network services. This both protects the patient and helps ensure a level playing field during contract negotiations,” they add.
The letter also says that the use of tiered and narrow networks must include specific patient protections in order to prevent discrimination based on health status. To do so, the stakeholders recommend several actions: ensure that network adequacy standards apply to the lowest cost-sharing tier, require clear consumer information about the tiers and the appeals processes, assure the use of a integrated delivery system — such as an accountable care organization — by a tiered network does not relieve the carrier from providing access to all covered services, and protect against higher cost sharing if the tiers change.
The letter also stresses that issuers must be transparent in their network design. “Some plans identify networks as “high value” or “high-performing” thus implying that quality has been a factor in the provider selection process,” the groups write. “In the event that quality is a factor that is used in the design of a network, consumers and providers should have information regarding the quality measures that were used. By the same token, if quality measures have not been used to create the network, it is critical that consumers, providers and regulators are made aware of the basic methods that were used to create the network, which may be centered on lower-cost providers,” the letter says.
Finally, the groups agreed with NAIC’s task force that consumers should have timely access to up-to-date information on provider directories. It is critically important that regulators monitor the accuracy of the provider directors on an ongoing basis, and especially at open enrollment, since the impact of inaccurate provider directories can be “devastating” to consumers, the letter says.