Almost two decades ago, the National Association of Insurance Commissioners (NAIC) adopted a model state law to regulate the adequacy of health plan provider networks. The model law contained a general standard that services be accessible without “unreasonable delay.” Seventeen years later, the federal government adopted this as the standard for qualified health plans (QHPs) in the new health insurance Marketplaces created under the Affordable Care Act (ACA).

Why update the model law now?

The NAIC’s model law – as reflected in federal and most state rules for Marketplace QHPs – did little to curb insurers’ rush to narrow their provider networks in the plans they sold for 2014. Fully 48 percent of QHPs came into the Marketplaces with narrow networks. The media published stories about consumers who were upset that physicians and hospitals they were used to seeing were no longer in their plan networks. Politicians weighed in, asking for more robust oversight of networks. The truth is, leading up to 2014, very few states had adopted the NAIC’s model law and fewer still did any proactive regulation to ensure networks were adequate.

Into this regulatory vacuum stepped the federal government, which indicated in March that it will conduct a review of network adequacy for 2015 QHPs, and signaled a future rulemaking in which they would adopt a tougher standard, perhaps modeled on the regulation of Medicare Advantage plans. This got the attention of state regulators, who immediately fired off a letter to HHS, asserting that the regulation of network adequacy was best handled by the states. Yet they also acknowledged that the NAIC model law needs to be updated to reflect changes in health plans and in the health marketplace, which has evolved since the 1990s to include an alphabet soup of plan network designs.

What is the process and timing for updating the model law?

Early in 2014, the NAIC created the Network Adequacy Model Review Subgroup, composed of state insurance regulators, to revise the model law. The subgroup’s first step was to invite various stakeholders to provide oral testimony. On separate conference calls the subgroup heard from provider groups, consumer advocates, insurance companies and accreditation organizations. The subgroup then asked these groups to provide written suggestions for updates to the model, which staff compiled into a master chart. The NAIC consumer representatives submitted comments that focused on (1) a more robust, quantifiable standard for network adequacy, (2) better oversight of plan compliance, (3) an end to balance billing by out-of-network providers working in in-network facilities, and (4) greater transparency of provider networks.

The subgroup is now engaged in a painstaking series of weekly conference calls, going line-by-line through the model law and attempting to achieve consensus on revisions. NAIC staff estimate that, so far, an average of 100 people have participated on each call, including consumer advocates, provider groups and insurers, as well as state officials. Although progress is slow (on the first call it took 20 minutes to revise the law’s title), the subgroup hopes to complete its revisions before the next NAIC national meeting, scheduled for mid-November in Washington, DC.

Why is this important and how can consumer advocates play a role?

NAIC’s model laws frequently serve as the template for state regulation of insurance products, and many insurance departments and legislatures will look first to NAIC’s language before drafting any network adequacy rules in their state. But it may be difficult to achieve consensus, with many stakeholders resisting stricter standards, more proactive oversight and transparency of plan networks. Ultimately, sometime this fall, insurance commissioners will need to vote on changes to the model, and advocates will need to weigh in to encourage them to include the NAIC consumer representatives’ key recommendations.

— Sabrina Corlette, Senior Research Fellow & Project Director
Georgetown University’s Center on Health Insurance Reforms