Editor’s note: In addition to Sabrina Corlette, JoAnn Volk, Robert Berenson, and Judy Feder coauthored this post. 

Twelve percent of the complaints to California’s Department of Managed Health Care this year relate to access to care problems. In New Hampshire, consumers were upset to learn that their local hospital had been excluded from the network of the sole insurance company participating on the state’s health insurance marketplace. In reaction to concerns about narrowing networks, legislators in Mississippi and North Dakota considered “any willing provider” legislation this year.

But at the same time, the Congressional Budget Office expects narrow networks to help reduce marketplace costs by billions of dollars. Network configurations clearly offer consumers a cost-access trade-off. Narrowing networks is by no means a new trend – using network design to constrain providers’ price demands has long predated the Affordable Care Act (ACA). In the new marketplaces, insurers are using narrow networks to help keep premiums low for price-sensitive purchasers. But if a plan’s low premium reflects limited network access, its policyholders might not only face compromised quality care but unanticipated and potentially crippling financial liabilities.

Regulators are recognizing this trade-off and reconsidering network standards at the state and federal level. But regulators face a challenge: If they overly constrain insurers’ ability to negotiate with providers, consumers could face significant premium increases. On the other hand, if they ignore provider participation issues, consumers will lack confidence that there is a sufficient network to deliver the benefits promised without posing financial or quality risks.

Quantitative Versus Subjective Network Adequacy Standards

A number of states have enacted – or are considering enacting – quantitative standards for provider networks, such as a maximum time and distance a consumer must travel to see a provider.   Other states maintain a network adequacy standard but it is predicated on a subjective expectation that insurers provide access to care “without unreasonable delay.” While quantitative standards have significant drawbacks, we conclude that a clear numeric adequacy standard is preferable to a subjective “reasonableness” standard.

However, insurers must be able to maintain leverage in their negotiations with providers to limit price demands and require quality improvements. We therefore encourage regulators to give insurers greater flexibility if they can demonstrate that hospitals and specialty providers within the requisite geographic area do not meet, or are not willing to meet, the plan’s requirements for price and quality. Providers who use telemedicine, meet plan expectations for quality performance, deliver better outcomes at a better price than local providers, or offer evening and weekend office hours could be considered as if they are within prescribed time and/or distance limits. At the same time, insurers who do not have a skilled and experienced in-network hospital or clinician to perform a needed service should be required to provide coverage for that service out-of-network, at no additional cost to the policyholder.

Improving Consumer Information And Regulatory Oversight

It will be equally, if not more important for states and the federally run marketplaces to dramatically improve consumers’ ability to make an informed decision when selecting a health plan. It is often difficult for consumers to obtain clear and understandable information about the breadth and restrictiveness of plan networks before making a purchase, and insurers’ provider directories are notoriously inaccurate and out-of-date. Marketplace officials, insurers, and providers need to work together to provide better information about networks to consumers – and be held accountable when they don’t.

Lastly, state and federal regulators need to actively monitor plans inside and outside the marketplaces on an ongoing basis. This should include data collection to assess policyholders’ use of out-of-network services and audits (such as “secret shopper” calls) to ensure that policyholders are able to access the provider they need in a timely fashion. It should also include a review – and the public display – of consumer satisfaction scores, complaints filed with state and federal agencies, and data on the resolution of internal and external appeals.

These recommendations address some but not all of the challenges associated with narrow or restrictive provider networks. Because many of the ACA’s system reforms have only just been fully implemented, state and federal policymakers will need to continuously monitor how consumers are faring and be ready to adapt requirements to improve the functioning of insurance markets and protect consumers’ ability to obtain affordable, high quality care.

Editor’s note: These topics are explored in an issue brief released May 29 by the Georgetown University Center on Health Insurance Reforms and the Urban Institute and supported by the Robert Wood Johnson Foundation.