Network adequacy refers to the standards that health plans must meet to ensure they provide access to health care providers and services.
Within Medicaid, network adequacy rules help ensure that people enrolled in Medicaid managed care plans actually have access to the services covered by their plan. Most Medicaid managed care plans are capitated, meaning they receive a set payment per enrollee per month in exchange for providing services. The plans accept the risk of losing money if they spend more on services than they receive through the capitated payments. Conversely, they make a profit if providing services costs less than the payments. These arrangements can give plans an incentive to limit coverage of services for their enrollees in order to maximize profits, and may deter use of services by making it harder to find a provider.
Capitated plans are allowed to limit the network of providers that enrollees may see, so long as that network is big enough to allow enrollees “adequate” access. The Delivery Systems team advocates for strong network adequacy protections including rules about the distance a Medicaid managed care plan can require someone to travel to seek care, the maximum waiting time for getting an appointment, and rules about when a person can seek care from a provider who is not in their plan’s network, among others. In addition to setting clear rules to protect access, the Delivery Systems team works with state Medicaid agencies to put into place robust policies and procedures for monitoring and enforcing those rules to ensure that Medicaid managed care enrollees have actual access to the services covered by their plan.
