2023 regulations for Medicare Advantage and ACA marketplaces seek to enhance network adequacy standards

• The federal government is implementing new oversight of Medicare Advantage networks to ensure a network’s coverage area includes an adequate selection of providers.
• Health plans in the Affordable Care Act insurance marketplaces will be subject to evaluations of time-and-distance standards and, in 2024, appointment wait times.
• The requirement to ensure essential community provider participation in ACA marketplace plans is being increased.

The U.S. Department of Health and Human Services (HHS) and CMS recently released sets of 2023 regulations that affect provider network adequacy standards in Medicare Advantage (MA) and the Affordable Care Act (ACA) insurance marketplaces.

CMS’s final rule for MA and Medicare Part D will have implications starting with the application period for the 2024 coverage year. Beginning then, compliance with network adequacy standards will be part of the application process.

Since 2019, MA plans have been required only to attest that they meet network adequacy standards as part of applications for new or expanded service areas. That approach has led to two major issues, according to CMS.

First, the agency states in the final rule, “Organizations are requesting to remove a county (or multiple counties) from their service area after bids are submitted because the organization realizes that it does not have a sufficient network for the entire service area.”

In addition, some organizations have not met expectations to fix network-related deficiencies following approval of the contract.

 As an accommodation for plans, CMS will offer a 10-percentage-point point credit toward the share of beneficiaries residing within published time-and-distance standards for the contracted network in the pending service area. Such credits will cease to apply at the beginning of the contract year.

CMS also will allow signed letters of intent to be used in lieu of completed provider contracts as a measure of network adequacy during the application process.

MA plans will receive information on the adequacy of their network ahead of submitting a bid, allowing them to make changes to their prospective service area as needed.

Network adequacy standards for ACA plans

The final rule for health plans operating in the ACA marketplaces likewise includes new standards for provider networks.

In states with federally facilitated marketplaces, HHS in 2023 will evaluate health plans for compliance with network adequacy standards based on time-and-distance criteria. Exceptions can apply to states that perform their own reviews, as long as those reviews use standards that are at least as stringent as the federal guidelines.

In 2024, the criteria will be expanded to include appointment wait times (in business days) for behavioral health, routine primary care and nonurgent specialty care. That provision was proposed for 2023, but HHS delayed implementation in response to stakeholder comments.

Telehealth-only providers will not be counted in assessments of appointment wait times. Plans will need to begin submitting information about whether network providers offer telehealth services, but that information will not be used to evaluate network adequacy or be displayed to consumers in 2023.

The time-and-distance criteria will be applied to additional specialists and facility types compared with 2015-17, when HHS previously assessed such criteria in ACA plans before turning the process over to states during the intervening years, and also compared with Medicare Advantage. Additions include:

• Emergency medicine
• Outpatient clinical behavioral health
• Pediatric primary care
• Urgent care

Requirements for including ‘essential’ providers

Also starting in 2023, the threshold for essential community provider (ECP) participation in an ACA plan’s service area will increase from 20% to 35% of available ECPs. As defined in the ACA, ECPs (categories of which include federally qualified health centers, Ryan White providers, family planning providers, Indian health providers, certain hospitals and a miscellaneous category) serve predominantly low-income, medically underserved individuals.

At least one ECP in each of the defined categories must participate in the network, if such a provider is available in the service area. And the 35% threshold must be met in the plan’s lowest cost-sharing tier.

In 2021, according to HHS’s estimates, 80% of plans in the federally facilitated marketplaces would have met the new threshold. It’s anticipated that any plans falling short could comply with the standard through the justification process.

“HHS anticipates positive health-equity impact as we believe these changes will increase access to quality, relevant healthcare for low-income and medically underserved individuals,” the final rule states.