United States: The 2017 Exchange Regulations: Network Adequacy Challenges Remain

The impact of these rules will be felt widely among the provider community as it struggles to face increasing pressures resulting from the plans’ continually narrowing networks

The Centers for Medicare and Medicaid Services (CMS) recently issued the final 2017 Benefit and Payment Parameters Rule (Final Rule) and concurrently released a final 2017 Letter to Issuers (Letter to Issuers) in the Federally Facilitated Marketplaces (commonly referred to as Exchanges) setting out the benefit and payment policies applicable to qualified health plans (QHPs) for the 2017 benefit year. The Final Rule and Letter to Issuers address a broad range of topics including risk adjustment, reinsurance and risk corridors, stand-alone dental plans, rate review and medical loss ratios. In this article, we focus on the issues relating to network adequacy and the inclusion of essential community providers, areas that have caused difficulty and concern for a number of clients. Although many were hoping this Final Rule would offer substantive relief for these concerns, CMS failed to move forward with some of the more meaningful measures presented in the proposed rule.

Network Adequacy – Minimum Threshold

The biggest disappointment for provider advocates is the failure by CMS to meaningfully address concerns surrounding the increasing use of narrow networks. The evolution of the narrow network has thrust adequacy standards into the spotlight. Although the proposed rule originally offered a minimum network adequacy standard, CMS failed to adopt this provision in the Final Rule.

In the proposed rule, CMS called on the states to select a quantifiable network adequacy standard, subject to certain minimum criteria established by CMS. If a state with an Exchange did not select such a standard, CMS would apply time and distance standards, calculated at the county level, similar to those used for evaluating Medicare Advantage plans. However, CMS apparently heard insurers’ arguments that such standards would take away the flexibility they needed in negotiating with providers for their networks.

Instead, the Final Rule defers to the insurance industry through the development of the National Association of Insurance Commissioners (NAIC) Model Act, which will surely require time for the states to adopt. CMS advises that it will utilize current network adequacy standards in reviewing QHPs, including quantitative time and distance standards, but will not require the states to do so at this time.

The sense from CMS in the commentary was that the NAIC Model Act would address the issues presented by many specialty providers in the U.S., including freestanding cancer centers, children’s hospitals, women’s health providers, and transplant providers. Is the NAIC Model Act the answer?

Network Adequacy – Continuity of Care

The Final Rule addressed issues relating to continuity of care when providers are removed from the network. CMS will compel insurers to give patients being seen on a regular basis by a provider 30 days’ notice (or as soon as practicable) of such provider’s termination from the network. Additionally, insurers must, in cases where a provider is terminated without cause, continue to offer coverage for the shorter of completion of the patient’s active treatment or 90 days, at in-network cost-sharing rates.

Network Adequacy – Cost Sharing

Beginning in 2018, plans will be required to count enrollee cost sharing for an essential health benefit provided by an out-of-network ancillary provider (such as anesthesiologists or radiologists) at an in-network facility toward the enrollee’s annual limitation on cost sharing. Although this does not go as far as some would have liked, enrollees consider it a step in the right direction.

CMS allows for an exception if the issuer provides enrollees with written notice in advance of receiving the service advising the enrollee that an out-of-network provider may be providing the services and that the enrollee may incur additional costs. This provision does not preempt more protective state laws and does not apply to balance bills, if the provider charges in excess of the in-network payments. This is an area in which consumer education and information relating to surprise costs is fraught with confusion and in which state laws have been particularly focused on around the country.

Network Adequacy – Transparency and Consumer Choice

Recently, McKinsey Center for U.S. Health System Reform released a report indicating that while the proportion of narrowed networks has remained relatively constant, the overall number of networks has declined. Moreover, consumer choice has also declined as an increasing number of consumers had access to only narrow networks in 2016.

CMS has committed to developing a ratings classification system providing consumers access to each QHP’s network coverage on HealthCare.gov. The ratings will be based on comparisons on the plan level with other plans in the same county and allow consumers to view and compare networks in their respective markets.

Essential Community Providers

Insurers that wish to provide products on the Exchange are bound by regulation to include in their networks a sufficient number and geographic distribution of Essential Community Providers (ECPs) that serve predominately low-income, medically underserved individuals. The Letter to Issuers and Final Rule identify how providers may petition/apply to become an ECP. The requirements to qualify include meeting several parameters that ensure the provider, in fact, serves the population for which the ECP distinction was designed. The current list of providers that qualify as ECPs in 2017 was recently posted to the CMS website. Beginning in 2018, CMS will credit issuers for multiple-contracted, full-time equivalent (FTE) ECP practitioners at a single location, up to the number of available FTE practitioners reported by the ECP facility through the ECP petition process.

For specialty providers, again, in the Final Rule, CMS refused to disaggregate certain ECP categories. For example, CMS will not evaluate access to children’s hospitals or free-standing cancer centers as separate from general acute care hospitals. CMS explained that “there are too few ECPs within each of these additional ECP categories appearing on our ECP list to afford issuers sufficient flexibility in their contracting.” As such, these specialized providers are grouped among all the hospitals, generally.

Standardized Options

CMS established standardized plan options for 2017 at the bronze, silver and gold levels and for each of the cost-sharing tiers within the silver level. Insurers are not required to offer standardized plans and may offer additional options. However, CMS believes that by displaying the standardized plans on HealthCare.gov it can provide consumers with an easy way to compare and choose among the available standardized plans. The plans would have (1) four tier drug formularies, (2) one in-network provider tier, and (3) standardized copayments and coinsurance for certain essential health benefit services. Certain routine services would also be exempt from the deductible.

Third-Party Payments

The Final Rule restates that insurers must accept premium payment from local government grantees that are funded by state and local governments; federal and state government programs that provide premium and cost-sharing support for specific individuals; and Indian tribes, tribal organizations and urban Indian organizations; but it fails to extend this directive to non-profit charitable organizations.

Patient Safety Standards

The Final Rule requires insurers to verify that contracted hospitals of more than 50 beds, if not working with a patient safety organization, implement an evidence-based initiative to improve healthcare quality through the collection, management, and analysis of patient safety events that reduces all cause preventable harm, prevents hospital readmission, or improves care coordination. CMS noted this option “would allow flexibility and promote alignment for hospitals that already engage in effective national, State, public and private patient safety programs.”

Conclusion

Unfortunately, the Final Rule and Letter to Issuers failed to meaningfully provide strict standards that would ensure consumers have access to specialized providers on the Exchange. The tendency appears to ensure that issuers have the requisite flexibility to craft their networks, financially, in a manner that will promote success on the Exchange, despite consumer complaints. The challenge is now at the state level to adopt NAIC Model Act provisions. For states that refuse to play in the Affordable Care Act sandbox, providers may have a heavier lift with their insurance commissioners and legislators.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions