NETWORK ADEQUACY CREDITS: An Evolving Trend in Network Adequacy

MEET NETWORK ADEQUACY STANDARDS AND PROVIDE CARE TO UNDERSERVED AREAS

Abstract

For health plan coverage to have value, consumers must have access to providers in a provider network that can meet their health care needs. Health plan regulators and policymakers generally place network adequacy standards on health plans to ensure this access. Telehealth is one available tool that could help insurers meet network adequacy standards and help providers deliver care to underserved areas more efficiently. In the present landscape, telehealth remains prevalent. Yet, questions remain about its continued use, benefits, and sustainability. To encourage the continued use of telehealth, several health plan regulators have implemented or plan to implement telehealth network adequacy credits (TNACs). A TNAC is defined as a policy where a quantitative credit is offered to health plans toward meeting quantitative network adequacy requirements. These TNACs represent an evolving and emerging trend in network adequacy. However, there is little explicitly written on these credits.

Therefore, the purpose of this white paper is as follows:

1. Provide a historical context for TNACs;
2. Provide data-informed recommendations for best practices on creating parameters for regulators and payers wanting to engage with TNACs;
3. Outline examples of what TNACs look like in practice;

Present a working analytical recommendations for best

Present a working analytical model that regulators can use to develop their own data-informed TNAC policy.

INTRODUCTION

For health plan coverage to deliver value to members, consumers must have access to providers in a provider network that can meet their health care needs. To ensure this access, in general, health plan regulators and policymakers develop network adequacy standards to which health plan networks must comply as a condition of offering coverage in a specific product and geography. These standards are based on the outcomes prioritized by regulators that are believed to be leading indicators of increased health status for consumers. Examples may include access to primary care, parity between access to physical and mental health care, and providing an adequate number of specialists to meet the health needs of health plan members.

Network Adequacy

Network adequacy refers to a health plan’s ability to deliver the benefits promised by providing consumers with reasonable access to a sufficient number of in-network primary care and specialty physicians, and health care services included under the terms of their contract with the consumer. One available tool that could help insurers meet network adequacy standards—and help providers deliver care to underserved areas more efficiently—is telehealth. However, today, most network adequacy standards are based on time and distance calculation between physical access points and the membership being served.

Before the COVID-19 pandemic, telehealth policies provided a platform to combat the shortcomings of cost, quality, and access in health care. A focused effort was made between 2018 and 2019 to encourage providers and hospitals to adopt telehealth with some success; however, most providers were reluctant to utilize this approach.

However, the COVID-19 pandemic in 2020 resulted in the rapid and widespread use of telehealth interventions to maintain patients’ access to services while keeping patients and health professionals safe. Early studies have shown that telehealth played a positive and significant role during the COVID-19 pandemic response, as it provided direct access to health care services during the lockdowns. This access was particularly important for people in remote or rural settings.

In the present landscape, telehealth remains prevalent. Yet, questions remain about its continued use, benefits, and sustainability. Regulators have the opportunity to encourage the use of telehealth, and to provide essential guidance about how telehealth will be considered in network adequacy by developing Telehealth Network Adequacy Credits (TNACs). A TNAC is a policy where a quantitative credit is offered to health plans toward meeting quantitative network adequacy requirements. These TNACs represent an evolving and emerging trend in network adequacy. However, there is little written specifically on these credits, and the industry currently lacks a consistent framework to apply telehealth credits based on the efficacy of telehealth in different specialties. The purpose of this paper, therefore, is to provide a historical context for TNACs, outline examples of what TNACs look like in practice, and to provide data-informed recommendations for best practices on creating parameters for regulators wanting to engage with TNACs.

EVOLVING THE STANDARDS FOR NETWORK ADEQUACY

Network adequacy standards are constantly evolving. Even before the COVID-19 pandemic, telehealth had been identified as a potential means to fill network gaps or to meet states’ time and distance or provider-to-enrollee ratio requirements to satisfy network adequacy requirements. The Department of Health Resources and Services Administration (HRSA) defines telehealth as the utilization of electronic and telecommunication technologies that support long-distance care, education, public health and administration. Due to the shortage of primary care and specialty care physicians in some rural areas and some underserved urban communities, telehealth has long been championed as a means to effectively deliver health care services remotely while also helping insurers meet network adequacy standards. Research shows that in 2018, 76% of US hospital systems utilized some form of telehealth. Although patients that accessed telehealth before March 2020 reported positive impressions and relatively high satisfaction with their experiences, clinicians’ attitudes were more varied, citing concerns about telehealth’s ability to provide patients with a high level of care, as well as broadband access and patient literacy.

In direct response to the COVID-19 pandemic in 2020, the use of telehealth soared. A large national study showed that telehealth encounters increased by 766% in the first three months of the pandemic, compared with 0.3% of all interactions in March to June of 2019. In response to this surge of telehealth, state and federal policymakers and regulators implemented wide-ranging flexibilities and waivers related to telehealth modalities. CMS announced initial telehealth flexibilities on March 17, 2020, which were enhanced through the passage of the CARES Act and other legislation. Among other things, this legislation allowed telehealth to be delivered at the same payment level as in-person visits for the duration of the pandemic. CMS explained that this would allow wider use of telehealth during the public health emergency to ensure plan beneficiaries had continued access to care. As a result of these flexibilities, CMS reported that the share of Medicare visits conducted through telehealth increased 63-fold from 2019 to 2020.

STAKEHOLDER OPINIONS ON ENGAGING IN TELEHEALTH

As telehealth will likely remain a fixture in the current health care landscape, stakeholders continue to debate the merits and shortcomings of this modality, especially as it relates to network adequacy. As TNACs have been introduced as a means to support and widen access to networks, stakeholder voices remain split on their opinions and willingness to engage with these credits.

REGULATORS AND POLICY-MAKERS

In general, regulators and policymakers have expressed enthusiasm and support for telehealth and TNACs as a means to strengthen provider network adequacy. The prevailing view is that TNACs provide plans with the opportunity to increase plan choices and accessibility to promote health equity, especially for beneficiaries in rural or underserved areas. Among this group of regulators and policymakers, many view the TNACs as an extra incentive to contract with providers that have adopted telehealth technology, therefore widening networks and network offerings. Although, some from this stakeholder group call for future study of how exactly these credits can support network adequacy long-term. Additionally, despite general support for telehealth and TNACs, these stakeholders emphasize that plans should not replace their in-person networks with telehealth providers, but utilize telehealth as a means to supplement care.

HEALTH PLANS

In general, health plans have also expressed their support for and willingness to engage with TNACs. These stakeholders argue that the additional flexibilities provided through telehealth contribute to and enhance network adequacy by potentially lowering costs to the consumer and making access to health care easier, specifically regarding specialists (e.g., behavioral health). In addition to their support of TNACs, AHIP has called upon CMS to expand specialty types eligible for the credit and to also conduct a wider-ranging reassessment of time and distance standards to examine the potential implications of TNACs on cost and access.

PROVIDERS

Provider voices are split in their opinions on telehealth and TNACs. Some providers note specific concern over the potential for TNACs to weaken network adequacy standards by incentivizing plans to exclusively contract for telehealth services in certain areas when in-person services might be available. Providers have also voiced concern over the potential for TNACs to inadvertently encourage plans to utilize telehealth services as a replacement for office services. Thereby, this would leave enrollees who prefer in-person encounters or who may not have the necessary technologies for telehealth without access. However, most providers are in favor of telehealth and TNACs. Given the current and projected national shortage of PCPs and specialists, most physicians realize that in many instances, patients’ only choices are a telehealth visit or no visit at all. Physicians have also specifically cited specific support for the continued use of the following: telehealth for nursing home visits; telehealth for specialist visits to reduce wait time; audio-only visits to count as a telehealth visit; and continued reimbursement for telehealth visits.

ADVOCATES

Advocacy groups have also voiced varying opinions on TNACs. Whereas the majority of advocates have identified telehealth and waivers as a critical tool in health care delivery to satisfy network adequacy standards, some have noted their opposition. These stakeholders have identified concerns with access issues, as well as a possible enrollee discomfort for using telehealth. As with several other stakeholder groups above, advocates have also emphasized that telehealth should not be intended to serve as a replacement for network participation. Further, some advocates have explicitly stated that regulators and policymakers should ensure that network adequacy is not based on the preference of the consumer alone, but also weighing all available variables, including telehealth options, in-person opportunities, facilities, and providers.

CURRENT TELEHEALTH CREDITS

One method of incorporating telehealth into existing network adequacy standards is the use of a telehealth network adequacy credit. At present, four health plan regulators have enacted or plan to enact telehealth network adequacy credits: Medicare Advantage (CMS), Medicaid, California Medicaid, and the Maryland Department of Insurance. The details of these credits are outlined below.

MEDICARE ADVANTAGE (CMS)

In June 2020, CMS issued the first policy for the telehealth credit. This policy established and outlined an initial 10% telehealth credit for a collection of provider specialty types. Specifically, their guidance stated:

Organizations will receive a 10% credit towards the percentage of beneficiaries that must reside within required time and distance standards when they contract with telehealth providers in the following specialties: Dermatology, Psychiatry, Cardiology, Otolaryngology, Neurology, Ophthalmology, Allergy and Immunology, Nephrology, Primary Care, Gynecology/OB/GYN, Endocrinology, and Infectious Diseases.

In December 2022, CMS issued a proposed rule to update its telehealth credit policy by proposing to add three new provider specialty types, which are (1) clinical psychology, (2) clinical social work, and (3) one category called Prescribers of Medication for Opioid Use Disorder that includes two specialty types: providers with a waiver under the Controlled Substances Act (CSA), e.g., MOUD-Waivered providers and opioid treatment programs (OTPs).

MEDICAID

In 2020, CMS amended federal Medicaid network adequacy standards from requiring states to adopt time and distance network adequacy standards to a more generalized requirement that states adopt quantitative network adequacy standards. In making this change, CMS stated that it would defer to each state to determine the criteria to be applied to telehealth providers and how such providers would be taken into account when evaluating network adequacy of the state’s Medicaid health plans. CMS noted that its network adequacy requirements require states to consider the availability and use of telemedicine when developing their network adequacy standards. If states elect to include telehealth providers in their network adequacy analysis, CMS stated that it believes that the states will establish criteria that appropriately reflect the unique nature of telehealth, as well as the availability and practical usage of telehealth in their state.

CALIFORNIA MEDICAID

In 2022 California adopted legislation permitting the state’s Medicaid agency, Department of Health Care Services (DHCS), to develop a telehealth network adequacy policy that conforms to the federal Medicaid standards. In July 2022, DHCS stated that it will implement a 5% telehealth credit allowance to meet time or distance standards. DHCS stated that its approach is aligned significantly with the approach CMS has adopted for MA. In addition to CMS’ allowable provider types, DHCS is proposing to allow these provider types to be counted toward the telehealth allowance as well. Gastroenterology, Hematology, Oncology, Non-Specialty Mental Health Providers, and Pulmonology. DHCS would not allow these provider types to be counted towards the telehealth allowance.

MARYLAND DEPARTMENT OF INSURANCE

In July 2022, the Maryland Department of Insurance issued proposed rules that would create a telehealth credit policy. This policy would provide a travel distance credit. When calculating the enrollee travel distance for each provider type, a health plan would apply a mileage credit to increase the maximum allowable travel distance by 5 additional miles. For example, if the requirement for a primary care is a maximum of 10 miles, a network offering telehealth access for primary care services, in addition to traditional sites of care, would be deemed to meet adequacy requirements as long as the “brick and mortar” locations were 15 miles from the member (10 miles + the 5-mile telehealth mileage credit). To get approval for the credit, the health plan would demonstrate, in a report to the Department of Insurance (DOI), that it provides coverage for and access to clinically appropriate telehealth services from participating providers for the provider type and geographic area to which the credit is being applied.

RECOMMENDATIONS

Although a handful of regulators have introduced frameworks and specific parameters for TNACs, these credits have not been widely adopted among health plans and regulators. As the use of telehealth consistently continues to rise across the United States, regulators should consider how to engage with TNACs to provide the enrollees with broad, timely and equitable care. As such, Quest Analytics sponsored targeted research to investigate how to best apply TNACs to provider networks. This research yielded three considerations and recommendations for regulators wanting to engage with TNACs.

1. Consider the availability of broadband to support telehealth access and utilize data sets to flex TNACs. The use and availability of broadband and high-speed internet are essential for the use of telehealth and create an easier access point for patients to connect to providers.

2. Consider tiering providers based on their provider specialty type. Remote specialty care providers create opportunities for patients to connect with providers that otherwise would be unavailable. Historically, specialists’ care is often restricted based on physician referral and geographic location.

3. Consider flexing TNACs based on telehealth modality. The use of telehealth is not only limited to the receipt of healthcare via computer, tablet or smartphone. Telehealth can also include audio-only services (e.g., receiving services over the phone). Research indicates that older adults, Black patients, and Medicare and Medicaid recipients – the patient populations with lower levels of internet access and less comfort with technology – were less likely to complete video telehealth visits.