CMS to rate health plans based on network size

Health insurance plans will soon receive ratings based on how many doctors and hospitals they include in their networks.

That’s according to new regulations released by The Centers for Medicare and Medicaid Services (CMS): The Notice of Benefit and Payment Parameters) and its primary piece of sub-regulatory guidance for the federally-run exchanges, the 2017 Letter to Issuers in the Federally Facilitated Marketplaces. The ratings will apply to insurers intending to offer plans in the 2017 marketplaces. 

Adelberg“The new ranking for provider networks will go into effect in fall 2016 for 2017 qualified health plans,” says Michael S. Adelberg, senior director at FaegreBD Consulting in Washington, D.C. Adelberg has held several senior positions with CMS, where he led provider network oversight and the review and approval of health plan applications for the Medicare Advantage and the health insurance exchanges.

“Provider networks in a given county will be assessed against each other and assigned one of three designations-basic, standard, or broad-based on the number of providers in its network versus its competitors in that county,” says Adelberg. “Consumers shopping for health plans will have this ranking in front of them when they select a plan-as well as other new forms of comparative information such as a plan quality rating of one to five stars.”

CMS also is implementing new standardized options for 2017, according to Adelberg. These are plans in which CMS has predetermined the cost sharing (deductibles, copayments, and coinsurance payments for major benefit categories, such as inpatient, primary care, and drugs). According to the agency, these standardized plans draw from common and popular plan designs already in use.

“For 2017, CMS is encouraging QHP [qualified health plans] issuers to offer standardized plans, but there is no requirement to do so,” Adelberg says. “However, the agency is considering ways to highlight standardized plans on healthcare.gov, potentially giving insurers with standardized plans a competitive advantage. The agency also notes that it may require the offering of standardized plans in the future.”  

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