Highlights of GAO Report: State & Federal Oversight of Provider Networks Varies
Network adequacy regulations ensure that health insurance plans (the “Plans”) have enough in-network healthcare providers and facilities so that members enrolled in the Plan (“enrollees”) can access healthcare in a timely manner. State agencies, the Centers for Medicare & Medicare Services (“CMS”), and the U.S. Department of Labor (“DOL”) have responsibilities for overseeing private health plans, including, in some cases, certain requirements related to the adequacy of provider networks.
On December 15, 2022, the U.S. Government Accountability Office (“GAO”) issued a report regarding the state and federal oversight of provider network adequacy. In its report, the GAO conducted a survey and received responses from 49 states and the District of Columbia about oversight practices and any issues states experienced with network adequacy from January 2019 through December 2021; interviewed officials from CMS, DOL, selected states, and stakeholders, such as the American Medical Association; and reviewed available literature that assessed provider network adequacy.
Here are the highlights:
- Officials from 18 states reported that some Plans were noncompliant with network adequacy standards for their provider networks. For example, Plans failed to establish a network that meets time and distance and primary care provider-to-enrollee ratio standards and failed to have certain required specialty providers in their networks.
- CMS identified 243 out 375 Plans that were not in compliance with network adequacy standards as part of the agency’s certification review of Qualified Health Plans (“QHPs”) on the federally facilitated exchange for Plan year 2023, as of August 2022.
- 45 out of 50 states took actions to oversee the adequacy of individual and group health plans’ provider networks. For example, 32 states reported that they reviewed plans for provider network adequacy prior to approving the Plans to be sold in the state, and 36 states reviewed Plans during an annual review process.
- Provider shortages, issuers’ challenges in contracting with available providers, and geography, such as large rural areas or areas with physical barriers may contribute to inadequate networks and are identified as factors that may contribute to inadequate networks.
Barriers to care make it more likely for enrollees to seek care from out-of-network providers, which can be more expensive.
Similarly, hospitals are also affected by the Plans’ failure to maintain healthy provider networks. For example, insurers are denying claims as not medically necessary when an enrollee remains inpatient as there are no beds available for in-network skilled nursing facilities in the local geographic area. Thus, failing to reimburse hospitals for around-the-clock care provided to its enrollees.
Overall, network adequacy is a key factor affecting enrollees’ access to healthcare. Inadequate networks could result in enrollees experiencing delayed care, interruptions in care, and undue harm. The Wolfe | Pincavage’s team is well-versed in denials management and dispute resolution and guides hospitals through every aspect of it.
 DOL’s oversight of provider network adequacy for private employer-sponsored group plans is limited to reviews of mental health and substance use disorder parity as federal law does not provide the agency with authority to review, or standards to assess, provider network adequacy generally.
 The Consolidated Appropriations Act, 2021, includes a provision for the GAO to review the adequacy of provider networks in individual and group health plans. See Pub. L. No. 116-260, div. BB, tit. I, § 109(c), 134 Stat. 1182, 2859 (2020).
 U.S. Government Accountability Office, Private Health Insurance: State and Federal Oversight of Provider Networks Varies, Dec. 15, 2022, https://www.gao.gov/assets/gao-23-105642.pdf.
 American Medical Association, Improving the Health Insurance Marketplace: Network Adequacy (American Medical Association, 2015).