Network adequacy standards in California: how they work and why they matter
- Collection:
- Health Policy and Services Research
- Series Title(s):
- Issue brief (California HealthCare Foundation)
- Author(s):
- Gu, Amy Y., author Ellson, Michele, author Gudiksen, Katherine L., author
- Contributor(s):
- California HealthCare Foundation, issuing body.
- Publication:
- [Oakland, CA] : California Health Care Foundation, December 2021
- Language(s):
- English
- Format:
- Text
- Subject(s):
- California United States
- Genre(s):
- Technical Report
- Abstract:
- Network adequacy standards are commonly used as a regulatory tool to ensure that health plans contain a network of health care providers adequate for enrollees to access medically necessary services in a timely manner. As health insurers design products to appeal to employers and individuals purchasing coverage, they must negotiate competitive rates with providers to offer low premiums and inclusive networks. If plans cannot negotiate price terms they deem reasonable with certain providers, they may try to exclude those providers from their network to contract with other lower-cost or higher-value providers. Without network adequacy protections, health plans may choose to exclude high-priced providers from a network, and a patient seeking care could be forced to go out of network. Depending on the type of health plan they have, when patients obtain care from out-of-network providers, they may be responsible for paying higher cost sharing or even the entire cost of their care. Consequently, the Affordable Care Act (ACA) required states to adopt minimum network adequacy standards to protect patients from networks with an insufficient number of providers, along with an independent, external review process that serves as a backstop for enrollees to appeal coverage denied by their plan to an independent review organization, often organized by a state or federal agency. This issue brief examines California’s regulatory framework regarding network adequacy and how effectively existing laws provide adequate and affordable access to health care providers, particularly specialists, in the commercial insurance market. Part I of this brief describes California’s current regulatory framework for network adequacy and adverse benefit determination review, including the external review process. Part II examines other state and federal requirements for network adequacy and external review and compares them to those in California. Finally, Part III considers new market consolidation forces and discusses the balancing act required within the existing regulatory framework to facilitate affordable health access for all patients in California.
- Copyright:
- Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY-NC-ND license. (More information)
- Extent:
- 1 online resource (1 PDF file (17 pages)).
- NLM Unique ID:
- 9918366980806676 (See catalog record)
- Permanent Link:
- http://resource.nlm.nih.gov/9918366980806676