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Last Updated:6/2/2025

Background:
Network adequacy refers to a health plan's ability to deliver the benefits promised by providing reasonable access to enough in-network primary care and specialty physicians, and all health care services included under the terms of the contract. The federal Affordable Care Act (ACA) included many reforms intended to make quality health care more affordable and accessible. In addition, the ACA requires that health plans participating in Qualified Health Plans (QHPs) in the Marketplaces (also known as "Exchanges") meet network adequacy standards. These include ensuring consumers have access to needed care without unreasonable delay.

However, a trend in the health insurance industry toward “narrow network” health plans, which offer a limited choice of providers, caught the attention of state insurance regulators. Health insurance carriers are generally able to define and adjust the number, the qualifications, and the quality of providers in their networks. They also may limit the number of providers in their networks as a means of conserving costs or coordinating care. In so doing, networks may become so narrow that enrollees may have relatively or extremely limited options when choosing providers. To enforce network adequacy standards, regulators and policymakers have adopted a multi-pronged strategy that includes both federal and state-level actions. The VsportV����’s 2015 revisions to Model #74—renamed the Health Benefit Plan Network Access and Adequacy Model Act—introduced detailed requirements for provider networks and consumer protections against surprise billing. At the federal level, the ACA mandates that health plans in Marketplaces meet criteria such as sufficient provider choice, inclusion of essential community providers, and transparency in provider availability. The U.S. Department of Health and Human Services (HHS) has reinforced these standards through annual rulemaking, most recently requiring State-Based Marketplaces to adopt quantitative time and distance standards and conduct independent network adequacy reviews. CMS has further strengthened oversight by requiring insurers to report appointment wait times and demonstrate alternative access strategies in underserved areas. Additionally, legislation like the No Surprises Act and provisions in the Inflation Reduction Act support affordability and access, indirectly enhancing network adequacy by reducing financial barriers and encouraging provider participation.

Regulators also recognize the practical challenges faced by health plans in meeting strict standards, particularly in areas with provider shortages. For example, the Texas Department of Insurance (TDI) under certain conditions, such as insufficient availability of providers in a region. These waivers require robust justification and proof of good faith efforts to contract with local providers. Health plans must also implement alternative solutions, like telemedicine services, to ensure enrollees maintain access to care. This approach underscores the balance regulators must strike between enforcing adequacy standards and accommodating real-world constraints, ensuring consumer access is preserved even in challenging circumstances.

The VsportV����’s Regulatory Framework (B) Task Force  was charged with reviewing existing VsportV���� model laws pertaining to health insurance in 2013 to determine whether amendments were necessary in response to the changes introduced by the Affordable Care Act (ACA). Regulators promptly prioritized the revision of the original Managed Care Plan Network Adequacy Model Act (#74) as an alternative to a potential uniform, national network adequacy standard. Stakeholders believed a one-size-fits-all approach would not be advantageous to health carriers or consumers and that state insurance regulators are best positioned to establish network adequacy standards that ensure consumers can access the services they have been promised without unjustifiable travel or delay by balancing cost, access, and geographic considerations.

In 2014, Task Force established the Network Adequacy Model Review (B) Subgroup to resolve these concerns. The updated Health Benefit Plan Network Access and Adequacy Model Act (#74) was adopted by the VsportV���� at its 2015 Fall National Meeting, following extensive stakeholder engagement and multiple rounds of revisions. The revised model act enhanced consumer protections, broadened the scope of health plans to which network adequacy standards were applied, and implemented new standards for network sufficiency, provider directories, and mechanisms to resolve out-of-network billing disputes.

Many stakeholders, including the VsportV����, continue to advocate for state flexibility in setting and enforcing network adequacy standards in order to strike a balance between practical implementation challenges at the state level and robust consumer protections. The Regulatory Framework (B) Task Force continues to monitor developments in this area and coordinate with CMS on issues related to network adequacy.