This third installment of Network Adequacy in a Nutshell addresses how the Measurements referenced in the second installment are written into the Requirements for different federal healthcare programs, including QHPs being issued under the Affordable Care Act, Medicare Advantage and Medicaid Managed Care.  Where relevant, this installment also includes the requirements specified in the NAIC Health Benefit Plan Network Access and Adequacy Model Act (“NAIC Model Act”). The notable requirements for each program are summarized below. 

Overview of Regulatory Requirements

Quantitative/Qualitative Access Standards

CMS has proposed a Provider Network Rating for QHPs in 2017. This rating, as well as some other recent developments in access standards, are addressed below:

QHP Issuers on the Federally Facilitated Exchanges

  • CMS provided “clarity on the [time and distance standards] that CMS has previously used and will use as part of the certification process to review network provider data to determine if plans provide reasonable access to covered services.” (2017 Letter to Issuers in the Federally-facilitated Marketplaces, p. 23)

  •  Also as in previous years, CMS will use a “justification process” for QHP issuer networks that CMS deemed to be inadequate. The justification “must specifically state address how issuers meet the reasonable access standard.” (2017 Letter to Issuers in the Federally-facilitated Marketplaces, p. 25)

  • As with 2016, in 2017 CMS included ECP requirements, including:

    • Contracting with “at least 30 percent of available ECPs in each plan’s service area”

    • Offering contracts “in good faith to all Indian health care providers in the service area”, and

    • Offering contracts generally “to at least one ECP in each ECP category.” (ibid, p. 28)

  • New for 2017 in FFE: Provider Network Rating for 2017 intended to “provide increased transparency to enrollees about the type of provider network in the coverage they are selecting.” (ibid, p. 27). CMS announced this as a pilot to occur in six states, but ultimately narrowed the list to four (Texas, Ohio, Maine and Tennessee).

    • Composite rating based on hospitals, adult PCPs, and pediatric PCPs

    • Calculated as the percentage of providers in a QHP’s network compared to the total number of providers in QHP networks available in a particular county.

    • Basic, Standard, and Broad rating 

  • In April 2017, CMS released the final Market Stabilization Rule, which relaxed the network adequacy requirements for QHPs. Starting in 2018, CMS will:
    • Rely on state reviews where possible
    • Absent an acceptable state review, rely on accreditation
    • Absent accreditation or state review, require a network access plan consistent with the NAIC Model Act

Medicare Advantage

  • Time + distance standards and enrollee-to-provider ratios for 2017 are unchanged over 2016
  • CMS also alluded to “wide scale monitoring efforts are underway with respect to network adequacy and provider directory” and reminded MAOs of its ability to enforce civil monetary penalties and/or enrollment sanctions based on compliance. (Medicare Advantage 2017 Final Call Letter, p. 152)

Medicaid Managed Care Final Rule

  • The general rule in the regulation specifies that a “State that contracts with an MCO, PIHP or PAHP to deliver Medicaid services must develop and enforce network adequacy standards.” (42 CFR § 438.68(a)) 

Provider Directory Accuracy

Provider directories are the most “public-facing” representation of a health plan’s provider network. Regulators (and plaintiffs’ counsel) are increasingly viewing them as a proxy for network adequacy. The requirements vary, but generally, provider directories should be: easily accessible, complete and accurate. The interactive chart below shows the data elements required by each federal program, as well as the NAIC model act. Move your mouse over each of the fields to see the fields that are required by more than one program.

Recent guidance also includes requirements on how often health plans are supposed to communicate with their network providers and how quickly their provider directories are to be updated after learning of a change to a provider’s information.  CMS has also begun to harmonize the requirements around making provider directories available in a machine readable format. The chart below summarizes these requirements:

Several states have set their own requirements around how often provider directories are to be updated. The map below demonstrates the variability in the requirements being developed at the state level:

Provider Directories: Requirements Vary by State (Commercial Market)


CMS recently completed its review of Online Provider Directories for 54 Medicare Advantage Organizations and released this report. Some of the results are discussed here.

Balance Billing

Most of the activity around balance billing is being seen at the state level, as CMS’s ability to prohibit an out-of-network provider from balance billing a patient is limited. Some notable developments in balance billing requirements are summarized below:


  • Plan may disclose to member or include out-of-network cost-sharing in OOP limit

  • Applies only to out-of-network ancillary providers at in-network facilities


  • Facility must provide disclosure

  • Out-of-network emergency services

  • Balance billing restrictions

  • Reasonable cost benchmark

  • Provider may request mediation process (mediation standard not established)

States are already starting to address the issue. For example:


    • Currently prohibited for emergency services under DMHC-administered plans

    • Pending legislation would also prohibit non-emergency “surprise bills"


    • Currently restricted for HMO & EPO emergency services

    • Legislation to expand to PPOs did NOT advance in 2015


    • Patients generally protected from owing more than their usual in-network cost sharing/copays for emergency services

    • Also protected in non-emergent if no in-network providers available or if provider failed to provide proper disclosures


    • Beginning in 2019, patients can submit bills to an “informal” review process.
    • If not resolved, then binding arbitration between the provider and the health insurer is the next step.
    • Only bills of at least $1,000 for services provided at a hospital that is typically in-network for the insurer are eligible for review.

    Provider Termination

    Health plans potentially put themselves at risk for network adequacy when terminating providers – especially large numbers of providers. The following summarizes the requirements for providing notice and providing continuity of care:

    • Medicare Advantage Organizations potentially put themselves at risk when terminating providers – especially large numbers of providers – as this may cause CMS to take another look at whether they meet network adequacy standards or not.

      • MAOs need to provide notice of “significant changes” to their network

        • CMS defers to MAO to deem “significant”

        • BUT CMS can enforce penalties on MAOs for failure to notify CMS

      • Notifications

        • CMS: 90 days in advance of term for “planned, no-cause” terminations

        • Enrollees: at least 30 days prior to no-cause termination

      • Enrollees affected by change may get SEP

      • Provider transition must account for continuity of care


    • QHP Issuers
      • New specific standards for 2017

        • Provider termination

          • Notice to enrollees at least 30 days prior to termination if seen “on a regular basis”

        • Provider Transition must provide for continuity of care

          • For a without cause termination, continuity of care must be preserved for up to 90 days

    Network Tiering Criteria

    Tiered networks are really nothing new and they provide health plans with an opportunity to cut costs. However, these products are an increasingly important issue for health plans, given the level of scrutiny they are suddenly receiving from various stakeholders. 

    NAIC Model Act

    • Tiering criteria must be established in advance and disclosed

    • Also must be disclosed on health plan provider directory

    Federal regulators have so far declined to place access standards on preferred tiers

    • 2017 Notice of Benefit and Payment Parameters Preamble: “We encourage issuers to be more transparent about selecting and tiering criteria.”