CMS proposes network adequacy rules

On December 2, 2015, the Centers for Medicare & Medicaid Services (CMS) released its Patient Protection and Affordable Care Act; CMS Notice of Benefit and Payment Parameters for 2017 proposed rule.  CMS issues a similar notice each year to amend federal rules governing the health insurance market under the Affordable Care Act. 

RodriguezCMS has proposed to expand the federal network adequacy standards that health and dental plan issuers must meet to be certified as qualified health plans (QHPs).  The stated intention is not to prohibit narrow network plans or to impede innovation but instead to establish a “floor” consistent with current levels of network coverage.  

CMS acknowledges the process in which the National Association of Insurance Commissioners (NAIC) has been engaged to develop a state Network Adequacy Model Act.  While CMS intends to partner with the NAIC and the states in developing and promulgating network adequacy protections, the proposed rule would largely subsume the NAIC process.  States would be required to either strengthen their standards or defer to federal rules. 

The final rule is expected this spring. The following provides an overview of the network requirements in the proposed rule:

Network standards

KaufmanCMS notes the traditional role states have played in developing and enforcing network adequacy standards and proposes that Federally Facilitated Exchanges (FFEs) rely on state agency review for network adequacy; however, the state standards would have to meet federal requirements.  In states performing reviews, issuers would still be required to submit data to CMS and certify that the federal standards are met.  In states that do not regulate network adequacy, or lack an acceptable standard, the federal standard would apply. 

Beginning in 2017, CMS plans to evaluate networks based on numbers and types of providers and their general geographic location related to covered enrollees to calculate a time and distance standard at a county level.  Provider directories would be required to be up-to-date, accurate, and complete and made available on issuer websites in a CMS specified format.

Issuers unable to meet network standards could submit a justification to CMS relying on factors such as the availability of providers and variables in local care patterns.

Next: Notification requirements

Notification requirements

The proposal would require that QHP issuers notify enrollees about the discontinuation of a contracted provider 30 days prior to termination or as soon as practicable. 

Where termination of a provider is without cause, CMS would also require issuers to allow active treatment to continue until the treatment is complete, for up to 90 days, at in-network rates.  The agency is considering whether to defer to existing state continuity of care requirements related to provider terminations.

Surprise bills

When an enrollee unknowingly receives care from an out-of-network provider in an in-network setting, unless a state has more stringent rules, CMS has proposed that amounts paid in such circumstances count towards the enrollee's annual cost sharing limit unless the issuer provides prior written notice that out-of-network charges will apply.

Other considerations

CMS is also considering adopting network resilience rules for disaster preparedness to prevent delays in services; application of wait time standards; surveys to determine if network providers are accepting new patients; and requiring issuers to make available their provider selection and tiering criteria.  Finally, CMS is considering creating a three-category rating system to be published on HealthCare.gov that would rank QHPs by network coverage.

Deborah Dorman-Rodriguez is a Partner at Freeborn & Peters LLP and is the leader of the Firm's Healthcare Practice Group.

David Kaufman is a Partner at Freeborn & Peters LLP and serves as a key member of the Firm's Healthcare Practice Group.