Private health insurance: State and federal oversight of provider networks varies

Fast facts

Most Americans are covered by private health insurance plans. Health plans create networks of providers—contracted physicians, other providers, and facilities—to deliver medical care to enrollees.

A provider network is considered “inadequate” if there are not enough providers for enrollees to receive timely care nearby. Inadequate networks can cause enrollees to seek more expensive care from out-of-network providers.

Most states said they review plans for adequacy before approving them for sale and on an annual basis. But the standards used to assess network adequacy — such as maximum wait times or sufficient choice of providers — vary by state.


What the GAO found

Provider network adequacy refers to a health plan’s ability to deliver the benefits promised to enrollees by providing reasonable access to a sufficient number of network providers. Inadequate networks can make enrollees more likely to receive care from out-of-network providers, which can be more expensive. State agencies and the Departments of Health and Human Services and Labor (DOL) have oversight responsibilities for private health plans, including, in some cases, certain requirements related to the adequacy of provider networks. These supervisory practices are different.

  • Officials from 45 of the 50 states (including the District of Columbia) that responded to the GAO survey reported taking various actions to monitor the adequacy of individual and group health plan provider networks. For example, officials from 32 states reported reviewing health plan provider networks prior to plan sale approval, and officials from 23 states reviewed plans when there were network changes. Officials from 44 states reported in the GAO survey that they used at least one standard to evaluate the adequacy of networks. Examples of standards include a maximum time or distance to a provider or a maximum waiting time for an appointment with a provider.
  • The Centers for Medicare & Medicaid Services (CMS) in the Department of Health and Human Services oversees the adequacy of provider networks for most qualified health plans (QHPs) offered on federally facilitated exchanges. CMS oversight activities include annual and targeted reviews of QHP networks in addition to reviews of provider directories—lists of providers and facilities in the plan’s network. For example, as part of the agency’s annual QHP review for plan year 2023, CMS officials told GAO that they are comparing issuer data in their provider networks to CMS’ network adequacy standards.
  • The DOL does not have authority or standards to enforce network adequacy for private employer-sponsored group health plans generally, but the DOL does conduct reviews of compliance with the mental health and substance use disorder equity requirements. DOL enforces these requirements by conducting reviews to ensure that limits on mental health and substance use disorder benefits are not more restrictive than limits on medical/surgical benefits.

Although there is no comprehensive information on the overall adequacy of provider networks, states and CMS have identified issuers that are not in compliance with network adequacy standards. The information also pointed to other potential limitations in access to certain provider specialties such as mental health and pediatrics. States and stakeholders also reported interrelated factors that may contribute to inadequate networks—provider shortages, provider contracting challenges, and geography. These interrelated factors are consistent with the literature. For example, a shortage of providers can contribute to inadequate networks. This can be particularly challenging in rural areas, as such shortages limit the number of available suppliers that an issuer can contract with.

Why did the GAO do this study?

The vast majority of Americans—or about two-thirds of people in the United States—get their health coverage through private health plans. Health plans create networks of providers—physicians, other providers, and facilities with which the plan contracts—to deliver medical care to its members. A provider network may be inadequate if the network has an insufficient number of providers or facilities to provide care to health plan enrollees. Inadequate networks can affect enrollees’ ability to access care in a reasonably timely manner.

The 2021 Consolidated Appropriations Act includes a provision for GAO to review the adequacy of provider networks in individual and group health plans. This report describes (1) state, CMS, and DOL oversight of the adequacy of provider networks; and (2) what is known about the adequacy of individual and group health plan provider networks.

For this report, GAO (1) reviewed CMS and DOL guidance and reports; (2) conducted a survey and received responses from 49 states and the District of Columbia regarding oversight practices and any issues the states were experiencing with network adequacy; (3) interviewed officials from CMS, DOL, selected states, and stakeholders, such as the American Medical Association; and (4) a review of the available literature that assesses provider network adequacy.

GAO provided a draft of this report to the Department of Health and Human Services and the DOL. Both agencies provided technical comments that were incorporated as appropriate.

For more information, contact John E. Dicken at (202) 512-7114 or [email protected]

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