Network Exceptions: Why Coordination Between Provider Network Operations & Compliance is Key

As we approach the holiday weekend, health plan Network and Product teams alike are breathing a sigh of relief after the fireworks that came along with this year’s network exception process, application, and bid filing deadlines.

A lesson learned by many is there can never be too much oversight in managing provider network data. The Centers for Medicare & Medicaid Services (CMS) threw a zinger with the new network exception form both in process and in timing. If there had been a poll taken when the new exception form was released, most plans likely would have agreed the form seemed simplified and the process a bit more relaxed than in previous years. If you had asked the same audience last week, the response likely would not have been as positive.


Whether in required reporting or in provider directories, CMS and beneficiaries are unrelenting in their demands that plans provide the most accurate footprint of their provider network. So now what? There are new regulatory compliance requirements, and health plan Compliance and Network departments must be diligent, work together, and ensure the plan stays in compliance.

Compared to other departments, Provider Network Management (PNM) has had it relatively easy when it comes to compliance reporting to date. PNM is also unique in that it can have multiple functions reporting to more than one vertical within the organization and not mirror the same design in every plan. For example, the team that prepares the Health Service Delivery (HSD) tables may be on an Analytics team; Network Contracting may report to Finance, and the directory information may be managed by Provider Relations and Credentialing but produced by Marketing. As new network and directory requirements have been introduced in the past few years, we have seen a challenge in the coordination across Compliance teams and PNM. As we enter this brave new era, communication is key. As Gorman Health Group (GHG) offers in few exception examples below, it is when issues are identified that communication can then be improved.


Exception Example: A plan did not file for a Service Area Expansion (SAE), however, in preparing their HSD tables to submit with the bid, they uncovered a gap in the network. The Analytic area was not aware the deadline for exceptions was March 7, 2017. If submitted on time, the plan would have had a valid exception.

In this case, the Network team felt it was not aware of the updated timeline for non-expansion exceptions. Collectively, the teams worked together to prepare a solid case for CMS, and it was accepted. As updates are announced, plans should ensure an internal distribution process is established. GHG recommends plans run a network adequacy report on a monthly basis, completed after the Credentialing Committee meeting, to include all changes for the month. Doing so allows management to account for unexpected deficiencies or significant network changes that need to be reported to the CMS Regional Office.


Exception Example: A plan did not file for an SAE, however, they built into place a routine network oversight process as described above. In addition, the plan had been working diligently on a monitoring and oversight process for their provider directory. During the directory auditing process, a provider included in their network files did not have an office at a secondary address. This finding resulted in the plan correcting the provider directory and running an updated network adequacy report. The report showed a network deficiency. An issue arose because the plan had been prepared to submit HSD tables during the bid process, and the network deficiency was identified after the March 7, 2017, exception deadline. In this case, the plan was able to successfully contract with an additional provider and mitigate the network deficiency.


Exception Example: A plan filed for an SAE application in multiple states/counties. As most network industry experts anticipated the exception process to be a bit looser, having options such as being able to file an exception if the only available provider was exclusive to one health plan, the exceptions were completed and filed on time. A large number of the exceptions were denied.

During an in-depth review, it was found not all of the available providers from the Provider Supply file and other sources had been researched and documented on the form as to why they were not valid providers with which to be contracted. In addition, the Section IV Narrative (Optional) was not used the majority of the time. Section IV is a plan’s one chance to tell a story to CMS beyond the checkboxes. It allows organizations to describe who the next closest contracted provider or non-contracted provider is or detail patterns of care to support the exception.


While GHG can partner with you on cases like these, continued evaluation and evolution of your own network processes will allow plans to grow and develop best practices customized to its unique offerings. In each all-too-common case, however, the way in which the plan communicated the individual situation with CMS directly impacted the outcome. As the network regulatory requirements continue to evolve, collaboration between PNM and Compliance teams will be key to the success of any oversight and monitoring.




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Elena Martin
Elena Martin

Elena Martin is Senior Director of Provider Strategies at Gorman Health Group (GHG). In this role, she has acted as Project Manager for numerous network expansion projects on a national level and has been a key consultant in Accountable Care Organization (ACO) and End-Stage Renal Disease Seamless Care Organizations (ESCO) application and development.

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