In my last blog post, I explored whether Medicare Advantage (MA) networks vary by plan-type within contract. Although networks are regulated at the contract level, differences in plans’ characteristics and cost-sharing may create some variations in plan networks under the same parent contract (e.g. if one contract has both an HMO plan and HMO-POS plan). Given the potential variations in plans’ networks, it is important to think about why networks matter in the first place.
Network breadth is just one of many factors that MA beneficiaries might consider when choosing a plan that is right for them. Generally, networks allow insurers to govern which providers beneficiaries can see and at what cost. This influences beneficiaries’ choice of and timely access to primary care and specialty providers.
Typically, broader networks with larger selections of physicians and specialists that patients can see without prior authorization have higher monthly premiums. Conversely, plans with narrow networks—which Kaiser Family Foundation (KFF) defines as having fewer than 30% of physicians in network—have significantly less expensive premiums, on average ($54 vs. $4 per month for HMOs & $100 vs. $28 per month for PPOs).
While it’s clear that beneficiaries face a tradeoff between network breadth and their costs, what are they getting in terms of quality of care when they buy into a broader or narrower network plan? Current literature indicates that there is an association between network narrowness and quality, but maybe not in the way one would expect. Several studies using 2019 Vericred Provider Directory Data (now Ideon) presented evidence that narrow MA networks had better performance on plan quality metrics compared to non-narrow network plans, as measured by Center for Medicare and Medicaid Services’ (CMS) Star Ratings. For MA plans, star ratings are scored on up to 38 measures, capturing information on plan’s care coordination, access-related measures, chronic disease management, screenings and other preventive care metrics, etc.
Sen and colleagues found that approximately 30% of MA beneficiaries were enrolled in narrow network plans in 2019. Among those narrow network plans, over 50% of plans had star ratings of 4.5 or higher out of a total of 5 stars; whereas only 9.2% of non-narrow plans exhibited star ratings of 4.5 or higher. The work of Meyers et al. also found similar results demonstrating that the highest rated MA contracts were associated with having the narrowest primary care networks. In both studies, the authors used a more restrictive definition of “narrow network” than KFF, with narrowness defined as having less than 25% of available providers in a geographic service area, in-network.
Collectively, these findings may suggest that narrowing networks have the potential to act as a policy lever in lowering health care costs without compromising the quality of care. One explanation would be that plans with narrow networks are incentivized to selectively contract with high-performing, quality physicians and provider groups under the Star Rating program, given the bonuses associated with high star-ratings. Additionally, Urban Institute’s interviews with MA plans in 2018 found plans expressing that narrow networks allowed them to more actively control spending and cost-savings through coverage restrictions that lower utilization, deterring unnecessary low-value, high-cost services.
However, this does not mean we should entirely rule out concerns over narrowness. We need to consider the impact that narrowness may have on beneficiaries’ access to care, racial and ethnic disparities, and beneficiaries in need of mental and behavioral health providers (which we know are sparse and frequently excluded from MA networks).
Moreover, as CMS works towards developing a centralized, nationwide provider directory, it will be important for them to provide beneficiaries with accurate and transparent information on plans’ networks and the quality of physicians included. While we should continue studying network narrowness and its effects, we must also recognize that for most consumers, knowing the extent of a plan’s network may not be that informative. As the studies above show, beneficiaries in narrow network plans seem quite satisfied with the quality of care received.
As CMS calls for public input on creating this centralized directory, it may not be necessary to request explicit information on how broad or narrow a provider’s network may be. Instead, provider metrics of timely access, quality, and cost might the most relevant pieces of information to assist beneficiaries when selecting a plan. To fully help beneficiaries realize access, however, more work will be needed from CMS. Even with a centralized directory, issues concerning “ghost providers” remain an issue, as observed in the Medicaid Managed Care program, and regulatory audits and enforcement of network adequacy standards will be needed to ensure that providers listed “in-network” are accepting of MA patients and not just those who are commercially insured.
Research for this piece was supported by Arnold Ventures.
