Network adequacy—a health plan’s ability to provide timely access to a sufficient number in-network providers—has become a matter of increased scrutiny during these early years of ACA implementation; Many consumer and physician advocacy groups have expressed concerns over the sufficiency of federal and state standards and oversight. In response, the National Association of Insurance Commissioners (NAIC) is in the process of updating its Network Adequacy Model Act, a draft of which was circulated earlier this month.[1]

Provisions under consideration relate to a broad range of issues, including transparency and consumer information, balance billing, narrow networks, monitoring, and the use of quantitative standards to assess network adequacy.

Historically, the NAIC Model Act has had fairly limited adoption. A recent survey of Departments of Insurance conducted by the Consumer Representatives to NAIC found that only seven of 38 respondents indicated that the Model Act was adopted as written and two indicated that portions of the Model Act was adopted, but with significant revisions.[2]

In practice, there is high variation in state approaches to regulating network adequacy due, in part, to the fact that states must balance access with other goals such as controlling costs. It is argued, for example, that narrow networks are associated with savings that result from contracting with doctors and hospitals who charge less than the competition, as well as  the fact that patients self-selecting into such plans tend to use fewer expensive healthcare services. Furthermore, standards are tailored to features such as geography and local market conditions.

While an update to the Model Act seems necessary in the new and evolving healthcare landscape, it is yet unknown what role it will play in catalyzing or shaping reform. An initiative such as this easily runs the risk of being too specific and prescriptive or, in the interest of flexibility, too vague or broad to be useful. Still, even if it is not adopted, the Model Act could act as a signal to legislators and regulators that changes to the regulatory framework are needed.

A few states, such as Washington and New York, have already adopted stronger consumer protections. Additional encouragement can be expected at the federal level, from the Department of Health and Human Services. In its 2015 letter to issuers participating in the Federally-facilitated Marketplace, the Centers for Medicare & Medicaid Services (CMS) highlighted a particular interest in network adequacy in hospital systems, mental health systems, oncology providers, and primary care providers, and intimated that it will be reflecting upon its review with the purpose of engaging in additional rulemaking.


[1] The draft Model Act.

[2] The Consumer Representatives’ survey.