Narrow Networks

November 13, 2015

Employee Benefit & HR News

Currently, narrow network is a broadly-interpreted term used to describe limiting the number of discounted in-network medical providers, allowing the health plan to enjoy lower premiums.  Soon, that broad definition will change.

While studies have shown that the quality of care is not effected by narrow networks, inadequate access to care is an area of concern.  A recent Harvard study found 15% of narrow network plans provide no access to at least one specialty provider.  This was taken from a sampling of 135 “silver” health plans being sold in the 34 states relying on the federal marketplace in 2015.

80% of emergency room doctors report treating non-emergent patients who say they had trouble finding an in-network specialist to treat them.  And the majority of patients are right.  60% of the over 1,400 doctors polled have trouble themselves re-directing patients to a specialist due to a narrow network plan.

ACA compliance is vague in it’s regulation of the issue, requiring networks only to be “sufficient in number and types of providers”.

The National Association of Insurance Commissioners has addressed the need for additional guidance, and is currently drafting the ‘Health Benefit Plan Network Access and Adequacy Model Act’.

The act will also directly addresses the growing, related issue of balance billing – when members are surprised by a large bill from their medical provider after mistakenly receiving out-of-network care, usually from a physician practicing within an in-network facility.

Here are some highlights from the most recent copy, drafted October 12th:

  • If there is an insufficient number of a type of specific providers, there must be a process in place for the member to request to utilize an out-of-network provider with the exact same benefits as if it was an in-network provider.
  • Required 24/7 access to emergency care.
  • Any new networks must be filed for approval with the state insurance commissioner.
  • State insurance commissioner must be notified within 15 days of any material changes to existing networks.
  • If a participating facility with non-network facility-based providers schedules a procedure with a member, they must provide a written disclosure alerting them to the fact that they may be held accountable for out-of-network charges, and a description of those charges.
  • Health care providers must establish a mediation process for members who are balance billed by out-of-network providers practicing at a network facility.
  • In the event a balance bill is sent to the member, there must be a written statement informing the member that they only need to immediately pay for the services as if they were in-network, and have options in paying the remainder, including (for bills over $500) sending the bill to their health-care provider for handling or mediation.

As our healthcare system continues to innovate and remodel health plans, regulation will naturally follow suit.  Hopefully, we will see the act finalized quickly over the coming weeks and begin to be adapted into law, because if done correctly, narrow networks are an effective cost-saving strategy.

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About Ellen Kohler

Ellen Kohler is an analytical consultant providing financial analysis, vendor evaluations, market & compliance analysis, as well as national industry trending for group employers. Ellen earned her Bachelor of Business Administration in Management from Pace University and is currently undertaking the preliminary actuarial exams.

View all posts by Ellen Kohler

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