Private health insurance: state and federal oversight of provider networks varies

The majority of Americans are covered by private health insurance plans. Health plans have established networks of providers (contract doctors, other providers and facilities) to provide medical care to enrollees.

A provider network is considered “inadequate” if it does not have enough providers to ensure that those enrolled receive timely care nearby. Inadequate networks can lead enrollees to seek more expensive care from out-of-network providers.

Most states said they review suitability plans before approving them for sale and on an annual basis. But the standards used to assess network adequacy, such as maximum latency or sufficient choice of providers, varied by state.

What the GAO found

Provider network adequacy refers to the ability of a health plan to deliver promised benefits to enrollees by providing reasonable access to a sufficient number of providers in the network. Inadequate networks can increase the likelihood of enrollees obtaining care from out-of-network providers, which can be more costly. State agencies and the Departments of Health and Human Services and Labor (DOL) each have responsibilities for overseeing private health plans, including, in some cases, certain requirements related to the adequacy of health care networks. service providers. These monitoring practices varied.

• Officials in 45 of the 50 states (including the District of Columbia) who responded to the GAO survey reported that they have taken various steps to oversee the adequacy of individual and group health plan provider networks. For example, officials in 32 states said they were reviewing health plan provider networks before sales plan approval, and officials in 23 states reviewed plans if the network changed. Officials in 44 states indicated in the GAO survey that they use at least one standard to assess network adequacy. Examples of standards include a maximum time or distance to a provider or a maximum wait time to see a provider.
• The Centers for Medicare & Medicaid Services (CMS) within the Department of Health and Human Services oversees the adequacy of provider networks for most Qualified Health Plans (QHPs) offered on federally facilitated exchanges. CMS monitoring actions include annual and targeted reviews of QHP networks in addition to reviews of vendor directories – lists of vendors and plan network installations. For example, as part of the agency’s annual review of QHPs for the 2023 plan year, CMS officials told the GAO that they compare data from transmitters on their providers’ networks to industry standards. adequacy of the CMS network.
• The DOL does not have the authority or standards to enforce network adequacy for private employer-sponsored group health plans generally, but the DOL conducts reviews of compliance with parity requirements in mental health and addiction. The DOL enforces these requirements by conducting reviews to ensure that mental health and substance use disorder benefit limitations are not more restrictive than medical/surgical benefit limitations.

Although there is no comprehensive information on the overall adequacy of provider networks, States and CMS have identified issuers that did not meet network adequacy standards. The information also indicated other potential limitations in accessing certain provider specialties such as mental health and pediatrics. States and stakeholders also pointed to interrelated factors that can contribute to inadequate networks: supplier shortages, difficulties in contracting with suppliers, and geography. These interrelated factors were consistent with the literature. For example, shortage of providers can contribute to inadequate networks. This can be particularly difficult in rural areas because such shortages limit the number of available suppliers an issuer can contract with.

Why GAO Did This Study

The majority of Americans – roughly two-thirds of individuals in the United States – receive their health coverage through private health plans. Health plans establish networks of providers (physicians, other providers, and facilities with which a plan has contracted) to provide medical care to their enrollees. A provider network may be inadequate if it does not have a sufficient number of providers or facilities to provide care to those enrolled in the health plan. Inadequate networks can affect enrollees’ ability to access care in a timely manner.

The Consolidated Appropriations Act of 2021 includes a provision for GAO to review the adequacy of provider networks in individual and group health plans. This report describes (1) state, CMS, and DOL oversight of provider network adequacy; and (2) what is known about the adequacy of individual and group health plan provider networks.

For this report, GAO (1) reviewed guidance and reports from CMS and DOL; (2) conducted a survey and received responses from 49 states and the District of Columbia on surveillance practices and issues the states have with network adequacy; (3) interviewed officials from CMS, DOL, selected states, and stakeholders, such as the American Medical Association; and (4) reviewed the available literature that assessed provider network adequacy.

The GAO provided a draft of this report to the Department of Health and Human Services and the DOL. Both agencies provided technical comments, which have been incorporated where appropriate.

For more information, contact John E. Dicken at (202) 512-7114 or DickenJ@gao.gov.