Adequacy is Not Adequate

For hundreds of millions of Americans, access to healthcare is safeguarded by a little known  regulation called Network Adequacy. At J2, we help insurance companies meet these regulations every day and we know these requirements are overdue for a rethink; a rethink that would meaningfully advance the quality and accessibility of US healthcare.

As background, network adequacy requirements ensure that health insurers “Maintain and monitor a network of appropriate providers that... is sufficient to provide adequate access to covered services”¹

This is an important goal and baseline protection for consumers, but it falls short in practice. The issue is that networks are measured largely against simple geographic tests (e.g., is there a doctor physically located near patients in a county). However, a network that passes this test can be functionally inaccessible for patients if provider information is inaccurate, doctors don’t have timely appointments, or the available care does not meet a minimum of quality.

Policy makers and regulators know these real-life barriers to care exist but have struggled to drive change. To meet consumer needs, J2 believes network adequacy should evolve and account for:

• Valid, Accurate Provider Data
  Inaccurate provider data is pervasive, and current adequacy measurements do little to prevent it. In 2023, the Centers for Medicare & Medicaid Services (CMS) found that nearly 50% of provider directory listings reviewed in a Medicare Advantage audit contained inaccuracies—including incorrect addresses, wrong specialties, or providers who were not accepting new patients.² In behavioral health, the issue is even more acute.³ If insurers submit networks where half the data is wrong, we believe regulators should account for this in certify their networks are adequate.
  
  
• Comprehensive Service Offerings
  Time and distance standards do not assess whether providers offer the full range of services that consumers need. Studies have highlighted the gaps in sub-specialty care and behavioral health that are not reflected in network adequacy standards.⁴
  
  
• Appointment Availability
  How can a network be sufficient if patients can’t get appointments? A recent survey found that in major US metros, patients had to wait on average 4 weeks to get an appointment.⁵ To ensure access to care, adequacy should incorporate not just geographic proximity, but availability and appointment wait times, as well.
  
  
• Minimum Cost & Quality Standards
  Directory inclusion or provider credentialing does little to advance quality or cost of care. Without these thresholds, networks can be technically adequate while steering consumers to lower-performing providers. Incorporating basic measures would be a clear way to raise the bar and align healthcare to higher quality outcomes.
  
  

Despite persistent gaps in how network adequacy is measured, the regulatory framework has remained largely unchanged for over a decade—still relying on outdated tools and metrics. Meanwhile, healthcare delivery and technology have advanced rapidly, widening the disconnect between policy and practice. We encourage and help our health plan clients to think beyond the current network adequacy standards to ensure the best care for their members. The new administration has an opportunity to modernize their standards as well, bringing them in line with today’s care models and improving both access and outcomes. 

 ¹ Centers for Medicare & Medicaid Services (CMS). Medicare Advantage Network Adequacy Standards, 42 C.F.R. § 422.116
² CMS, Online Provider Directory Review Report, 2018
³ GAO, Mental Health Care: Access Challenges for Privately Insured Patients, 2022
⁴ HHS ASPE, Behavioral Health Provider Network Adequacy in Medicaid Managed Care, 2021;HHS ASPE, Wait Time Standards for Behavioral Health Services in Medicaid Managed Care, 2024
⁵ AMN Healthcare, “Physician Appointment Wait Times Getting Longer,” 2024

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