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Revisions Weighed to Model Law on Adequacy of Provider Networks

By Rebecca Adams, CQ HealthBeat Associate Editor

February 26, 2014 – The nation's insurance regulators are considering changes to their recommendations for state laws that ensure that consumers have enough providers to choose from in health insurance networks. The discussion comes amid criticism about how narrow some provider networks are in plans offered through the marketplaces created by the health law.

The National Association of Insurance Commissioners (NAIC) is expected to debate its model for provider networks during the group's national meeting in March. Any new version is expected before state legislative sessions start in 2015, to allow lawmakers to adjust existing state laws. State legislators often rely on such templates put forward by the NAIC on insurance issues.

The regulators' group may also suggest revisions that could be accomplished through regulations that could be faster and easier instead of new laws, which would be a faster and easier to enact than new laws.

The debate was prompted some insurers' decision to create narrow provider networks for coverage sold through exchanges created by the health law (PL 111-148, PL 111-152), said Kansas Insurance Department Commissioner Sandy Praeger, who chairs the subcommittee that would oversee any recommendations. Consumers in some states have complained that they are unable to see highly regarded doctors or use the biggest hospitals in their areas.

"There are some concerns that some of the plans have reduced the number of providers in plans since the implementation of the Affordable Care Act," Praeger said, referring to the health care law.

Some health insurers designed networks to exclude expensive providers because the law limits the way that insurers can hold down costs in other ways such as restricting the coverage of benefits.

"Most states don't have good protections in place and the Affordable Care Act leaves network adequacy as something that states can regulate," Praeger said, adding that federal officials are beginning to look at how effective is network adequacy at the state level. "It's important that we have the discussion and bring some recommendations forward."

Insurance commissioners do not want federal officials to dictate changes in how regulators oversee the networks that insurers use.

"I think [federal officials] are looking at it and that's why it's important for us at NAIC to make sure that we are providing proper guidance to our states around network adequacy and it stays a state issue," she said.

Praeger's subcommittee will have a conference call in March to begin discussing the issue, among other items on the group's agenda.
Some question whether changes to the model law itself are needed, said Wisconsin Deputy Commissioner of Insurance Dan Schwartzer, who works closely with the NAIC. Wisconsin Insurance Commissioner Tom Nickel is the vice chair of Praeger's subcommittee. Some state officials may prefer to be more aggressive using their existing authority or may push for revisions to their state laws on provider networks without new recommendations from NAIC.

"We have to be careful we're not taking away the ability for insurers to negotiate good rates for providers because health care costs continue to rise," said Schwartzer.

Schwartzer said that requirements in the health care law, such as preventing insurers from denying coverage or charging higher premiums to sick people, would end up raising costs for insurers. So will the law's requirements for the types of benefits that insurers have to offer. Insurers want to offset those increases somehow.

"It's a sensitive area," said Schwartzer.

The issue of whether networks are sufficient are one of several issues that are expected to come up at the NAIC meeting in Florida that starts March 29. Other topics include proposed changes to the group's model law on the financial reserves that insurers should maintain, federal officials' interest in overseeing the review of rate increases that are proposed by insurers and the regulation of the plans in the marketplaces.

The group is working on a white paper analyzing the potential impact of employer self-insurance on insurance sold to small businesses.

Commissioners also will discuss concerns about consumer issues that arose in the marketplaces, including if the federal website or a state marketplace website incorrectly listed information about a health plan's benefits so that consumers went away without coverage or allowed to enroll in a plan that was not intended to be offered in the customer's area.

Insurance commissioners are intent on retaining as much oversight as possible over the health plans in their states. As they weigh whether to update their recommendations on the rules that insurers must follow in designing their provider networks, they may consider issues such as how long it takes for patients to get appointments or how many providers are available in a particular geographic area.

Praeger said that the association wants to consider a variety of metrics that regulators could use to assess whether the number of providers in a network is sufficient.

"One size fits all doesn't work," said Praeger.

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