No Surprises Act Means Heightened Regulatory Risk for Network Adequacy

by | Jul 7, 2021 | Healthcare

The pressure is on. Health plans are under heightened regulatory risk around network adequacy with the passing of the No Surprises Act in December 2020.

Here’s what you need to know. The act brings nearly all private group and individual plans into alignment with the Centers for Medicare and Medicaid Services (CMS). By January 2022, for commercial populations, health plans must:

  1. Offer an online provider directory on its website.
  2. Establish a continuous provider information verification process.
  3. Update provider information within two days of receiving new information.
  4. Respond to member inquiries about provider or location availability/network status within one day of inquiry. This information is binding.

What this means

What this boils down to is health plans must provide an online directory, keep it up to date, verify it’s up to date every 90 days, and ensure plan employees accurately communicate provider and site network status to members.

The importance is clear. The act requires health plans to:

  • Update directories within two days of receiving new information
  • Establish a “response protocol” system that enables plan employees to respond to member inquiries about provider or facility network status within one day of inquiry.
  • Notify members when a provider or facility leaves its network (limited to certain members with complex conditions, inpatient care, non-elective surgery, pregnancy and terminal illness).

Penalties are steep. They include financial responsibility by the health plan for costs incurred by members who receive services from providers/sites listed in the online directory or informed via inquiry, who are no longer part of the plan’s network. At a minimum, the act requires plans to cover services at in-network rates.

Current state and cost of provider directories

As health plan leaders know all too well, collecting, unifying and monitoring provider data is a complex and expensive undertaking. Despite an annual investment of $2.1 to $2.3 billion by commercial health plans to maintain provider databases, outcomes are shockingly poor.

For Medicare Advantage (MA) populations, CMS conducts regular reviews of provider directories. Year-over-year, they discover widespread discrepancies and inaccuracies, with no discernable improvement. As in 2018, the 2020 report revealed:

  • Discrepancies were found in 50 percent of provider listings and in nearly 49 percent of location listings
  • Errors still center around the most basic information including whether or not a provider works at a listed location, or if a provider is accepting new patients.
  • Average accuracy by location declined from 48.39 percent in 2018 to 44.79 percent in 2020.

Here again, penalties are steep. As it pertains to MA beneficiaries, CMS can levy fines of up to $25,000 per error per provider.


December’s passing of the No Surprises Act validates what we have always known to be true – data network adequacy is inextricably linked with provider directories. Both depend on the same complete, timely and continuously accurate data to remain true, useful and compliant.

Learn more

Eight years ago, in 2016, Gaine became part of the largest, most sophisticated healthcare data exchange project anywhere in the world. We helped solve the problem of delivering continuously accurate provider information for the state of California in a way that simplified the process and eased the burden for everyone. To date, we successfully connect 14 health plans, 15,000 provider organizations, more than 170,000 individual providers and key regulatory bodies with the Symphony Platform.

If you would also like to simplify and ease the burden around provider data while meeting the requirements of the No Surprises Act in time, please contact us.


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