Exceptions to Network Adequacy Rules May Exacerbate Health Disparities in Medi-Cal Managed Care

Exceptions to Network Adequacy Rules May Exacerbate Health Disparities in Medi-Cal Managed Care

This blog post was co-authored by legal intern Mason Bettencourt.  Analysis of Medi-Cal Alternative Access Standards and maps were created by Dhara Patel, MPH, using a Welch-ANOVA with a Gamer-Howell post-hoc analysis during her internship at NHeLP in Spring 2019. You can access the maps here.


In California, the Department of Health Care Services (DHCS) establishes network adequacy standards for managed care plans in California’s Medicaid program, Medi-Cal. The purpose of these federally-required network adequacy standards is to ensure that Medi-Cal managed care enrollees can access care relatively quickly and close to where they live.

While maintaining robust network adequacy standards is critical to guaranteeing easy and timely access to essential health care services, DHCS can and does grant exceptions from its geographic access standards. These are standards that require plans to ensure that providers of certain Medi-Cal services are located within a certain number of miles or travel minutes from where their enrollees live. DHCS may allow plans to follow alternative access standards instead of the usual standards when the plan shows that it cannot reasonably meet DHCS’s requirements or when the plan proves to DHCS that it can still deliver services effectively absent the usual standards. These alternative access standards require enrollees to travel farther than the maximums set in the default standards.

DHCS approvals of alternative access standards present challenges for advocates and Medi-Cal managed care enrollees, who often face great difficulty in accessing care even under the more rigid standard network adequacy standards. With DHCS approving nearly 10,000 new alternative access standards requests from MCPs in January 2019 alone, many patients will face ever greater time delays and geographic isolation from providers when trying to access essential health care services.

A recent National Health Law Program analysis on the distribution of the alternative access standards approvals in California in January 2019 found that the average approval increased network provider distance requirements by 31.61 miles. These recent approvals disproportionately affected the required travel distances to specialty providers, with the physical medicine and rehabilitation, infectious diseases, and nephrology specialties receiving the highest

proportion of approvals. Specialists—especially ophthalmologists, hematologists, and OB/GYN primary care providers—also experienced the most significant changes in distance requirements under these approvals. Pediatric providers accounted for nearly three-quarters of the approvals.

Our analysis found that DHCS approvals affected Medi-Cal beneficiaries across the state, altering access standards across higher- and lower-income regions, rural and urban areas, and communities of color and majority-white communities. However, certain regions and demographic groups will feel the adverse impacts of loosened network adequacy standards more acutely than others. For example, there were more approvals in rural areas among high-income, majori

ty-white ZIP codes, while the bulk of approvals in lower-income ZIP codes in communities of color were in dense urban areas. But low-income areas, regardless of other area characteristics, had more approvals with higher average distance requirement changes than high-income regions.

Our analysis also found that DHCS granted approvals in lower-income ZIP codes of communities of color at a similar rate to approvals granted in higher-income ZIP codes in both communities of color and majority-white communities. Lower Medi-Cal reimbursement rates and lower numbers of Medi-Cal enrollees in wealthier areas may dissuade some providers in those areas from accepting Medi-Cal, but do not explain why approval frequency is comparable across higher- and lower-income regions, rather than much higher in the latter. Low-income, majority-white communities had higher approval rates than low-income communities of color. Although it is unclear how a region’s density affects approval frequency, the high proportion of white, low-income Californians living in rural areas may explain these heightened approval rates.

Theses approvals in California are likely to negatively impact managed care enrollees in Medi-Cal. Most approvals increased the required travel distance by more than 20 miles, with OB/GYN and pediatric services experiencing the most drastic distance requirement changes. The changes could exacerbate access issues in rural regions, lower-income areas, and communities of color, which have already historically faced a disproportionate number of barriers in accessing health care services.

Advocates and Medi-Cal enrollees should monitor DHCS’s Network Adequacy webpage for periodic updates on approved alternative access standards to ensure compliance with federal regulations and oppose any alternative access standards that place burdens on beneficiaries to travel longer distances and undermine the goals of the Medi-Cal program and the health and wellbeing of its enrollees.

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