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Reimbursement and Practice Management

Navigating Narrow Networks

Narrow provider networks limit the providers patients have access to in their networks. These may be getting narrower in your market.


After reading this article you will know how to:

  • Identify the possible impact of narrow networks on physicians and patients
  • Describe action steps when excluded from a network
  • Identify and list valuable medical practice performance data supporting inclusion in a network

View related pearls


Does the term "narrow networks" dredge up images of a computer system, social networking, or perhaps small number of referral sources? For medical practices, narrow networks are none of the above. Yet, this benign-sounding network is something you must know more about because they can make a profoundly negative impact on your business. And the damage can happen literally overnight.

Before we learn about the impact on your practice, let's understand how a narrow network is defined. A narrow network is a group of physicians formed by an insurance company to offer to employers and other purchasers of its health plan products. Historically, networks have largely been a free-for-all. If a physician wants to be enrolled with the insurer, then he or she is accepted as a participating provider and loaded onto the rosters of health plans from which patients could choose. It may take a month - or even a few - but network enrollment was rarely denied.

In a narrow network, however, the insurance company is actually taking a cohort of the physicians, and excluding them from the network. The communication is typically done by letter, and non-negotiable. Once the physician no longer enrolled, the physician is no longer on the health plan's roster.

Unfortunately dis-enrolled physicians' names occasionally remain on the network's public roster list for months - even years. Sometimes patients do not learn that the physician is no longer in network - until after they receive their services. At that point, the physician is left with few choices: try to collect from the patient directly or access the patient's out-of-network benefits - or just write off the amount that the insurance would have paid.

From the insurance company's perspective, the cohort of physicians who are excluded are seen as outliers, perhaps exhibiting higher-cost services or excessive referrals. Alternatively, the physicians may just happen to be practicing in the wrong location. That is, supply is higher than demand, and the insurer wants to decrease some of that excess capacity.

Sometimes, a narrow network crops up when an insurer formulates a new health plan. Sometimes, the health plan offers its new narrow network just to employers. Increasingly, the plan is marketed directly to consumers, particularly those taking part in the insurance exchanges made available by the Affordable Care Act (ACA). Price-sensitive patients are flocking to these products, particularly if they have no affiliations or relationships with physicians who are left out of the network.

This description may give you pause, as you consider the similarity with health maintenance organizations (HMOs). In the 1980s and 1990s, HMOs were formed by insurers. Often, a gatekeeper primary care physician was in charge, and patients were referred only to in-house specialists and facilities. Advocates of the narrow network model claim that the old HMOs were cost-driven while narrow networks are, in contrast, value-driven. Indeed, some promoters now refer to narrow networks as "high-performance networks."

Steve Wojcik, vice president of public policy at the National Business Group on Health, a non-profit agency devoted to representing large employers' perspective on national health policy issues, espoused the networks recently, saying: "We are able to select winners and losers… We are looking for the best we can get in terms of price and quality."

Regardless of the term, many physicians will find themselves being left off of a roster. If you are a recipient of a "you're out of our network" letter, it's unlikely that you'll be given a reason that you were excluded. In fact, the rationale or mission of a narrow network is rarely disclosed.

Perhaps being removed from the network is good news - or will have little-to-no impact on your practice. If that is the case, confirm that the insurer has communicated to your patients that you are no longer in the network. Just to be safe, post a notice to that effect in your reception area and on your practice's website so that patients will understand that the decision was the insurer's, not yours.

If you want - or need - that insurer's business, take the following actions:

Document the timing. Review the "you're out of our network" letter to determine the date that your network participation ceases.

Contact the insurer by telephone to discuss the details of their decision.

Send a follow-up letter. Incorporate relevant data about the quality and cost-effectiveness of the care you provide. Consider this an opportunity to prove that you deserve to be a participant in the network. Follow up with a phone call or (ideally) meeting with the insurer's medical director, to discuss your situation directly with him or her.

Communicate with your local and state medical societies as soon as possible. Determine whether these letters were sent to other physicians and what recourse the society's leadership team suggests. You may find that the society's legal counsel can help navigate the situation yourself without the need to engage the services of an attorney.

Engage patients and employers. Contact your patients who are in the narrow network (of which you are no longer a member, and therefore cannot serve them as an in-network provider). Advise them of the insurer's decision and your concerns about the continuity of their care. Encourage patients to communicate with their employers' management and human resources teams to express displeasure with the insurer's decision.

As an industry, we have focused on the government's incentive programs, using precious time and energy to report quality indicators and criteria to prove our "meaningful use" of automation. While you were devoting resources to fathoming and reporting for these programs, commercial insurers have slowly but surely been culling through your data. Even as you qualify for various federal and state incentives, the insurer-sponsors of narrow networks may still determine that your data reflect poor performance based on some criteria they have developed. You can't change your data overnight (nor should you), but the narrow-network trend should be a wake-up call that you're being watched - not only for what you do, but for the volume and costs of your referrals. It's crucial to develop an understanding of your data, particularly as you dip your toe into multi-provider, risk-based models of care like accountable care organizations (ACOs).

The saving grace for physicians may lie in the reality of the consequences of this new trend. Indeed, narrowing physician rosters decreases the public's access to care. In response, many states are considering regulations regarding patient access. Referred to as "network adequacy," these regulations may lead to standards that effectively limit the restrictiveness of insurer networks. These standards may include distance or time - the maximum mileage that patients must travel to reach specific specialties -maximum appointment wait times based on the nature of the patient's illness or the urgency of the care, or perhaps a basic physician-to-beneficiary ratio. In March 2014, federal officials elaborated on the gauge defined as "reasonable access" for the health plans sold on the ACA insurance exchange. At minimum, regulators are addressing physicians' concerns that rosters aren't updated by insurers - thus unfairly putting the burden of communication on the physician, and negatively impacting patient care.

Watch for narrow networks. Even if there are none in your area now, they could come, literally overnight. If a letter arrives in your mailbox about a change in your network status, read it carefully. Armed with knowledge and an action plan, you will be in position to respond effectively and quickly before it has an impact on patient access and your practice's bottom line.

Pearl: Tier Up

Some insurers stop short of narrowing physician networks; instead, they create tiers of physicians. Those deemed as high cost physicians are placed in a tier that requires higher premiums from employers or beneficiaries and, sometimes, greater financial responsibility from patients in the form of copayments, coinsurance and deductibles. Because it appears to be difficult to transfer between tiers, those enrolling as new physicians are wise to make their case for a more favorable tier upon enrollment by submitting evidence of the quality and cost-effective medical care provided to patients.

Pearl: QHP Thin Networks

The Centers for Medicaid and Medicare Services (CMS) requires that organizations seeking certification as a qualified health plan (QHP) in a federally run insurance exchange maintain a network "sufficient in number and types of providers, including providers that specialize in mental health and substance use disorder services, to assure that all services will be accessible to enrollees without unreasonable delay." Insurance issuers applying for QHP certification must attest that they meet this standard. A proposed rule to apply a "reasonable access" standard may, in the view of some physician advocacy organizations, make it easier for QHPs to narrow their networks further.

For 2015, CMS proposed to require that "at least 30 percent of available essential care providers (including hospitals and primary care physicians) in a plan's service area participate in the network." In other words, health plans could exclude up to 70 percent of local essential community providers from a network. CMS plans to share its network adequacy findings with states, incorporate state input into its network adequacy review process, and monitor complaints and other evidence of network adequacy.

Pearl: ACA Gets Narrow

The Accountable Care Act (ACA) seeks to help consumers by requiring qualified health plans (QHPs) to show their comparable costs and values (at platinum, gold, silver, and bronze levels) side by side in online insurance marketplaces. The ACA also prevents insurers from limiting benefits or cherry-picking the healthiest consumers. While this helps consumers, it leaves insurance companies with fewer tools to hold down prices in order to attract new customers. As a result, insurance companies must control the costs of the care their customers use, in part, by creating narrower networks of providers comprised of doctors and hospitals who charge lower prices or treat episodes of illness effectively and less expensively.

Pearl: Narrow Docs?

The new narrow network trend is for health systems to define themselves as the "network," and partner with an insurer to offer a health plan in its market. This puts employed physicians in the group – and independent physicians out. These relationships are popping up in urban markets (Los Angeles' Anthem Blue Vivity) as well as rural ones (Wisconsin's Arise Health Plan). Keep a pulse on your market to determine if it's best to avoid employment, or whether being a part of the health system may be a better option in order to ensure patient access.

United States