Image: Steve DiMatteo
In my last two posts, I explained why provider networks exist (and that they’re not new), and what problems they solve. Those benefits are real, substantial, and often underappreciated — particularly in today’s contentious landscape.
At the same time, provider networks also have very real problems that are inherent to their design. It’s not because the concept itself is inappropriate, but because any system that mediates access, pricing, and payment between patients, providers, and payors must introduce friction somewhere. That friction can’t be avoided — and, just like the benefits, the problems affect more than one set of stakeholders.
Provider networks don’t always prevent surprise bills.
Provider networks promise predictability and, by implication, coordinated care. But that promise is not absolute. In fact, benefits specialists have a specific term for the claims that most often fall outside those expectations: RAPL, which refers to radiology, anesthesiology, pathology, and laboratory services. Ambulance claims also frequently behave like RAPLs.
These are often described as “hidden providers.” They play essential roles in in-network hospital care, but they typically work behind the scenes. Treating providers generally do not interpret imaging studies, analyze test results, administer anesthesia, or collect specimens themselves; those functions are performed by specialized clinicians who report their findings back to the treating provider.
Because consumers do not interact directly with these specialists, they are often unaware of how many providers are involved in their care. More importantly, consumers usually cannot choose which specialists perform these services — and treating providers themselves often do not know which of those specialists participate in the patient’s network. In the case of ambulance services, the provider is selected by the dispatcher, who likewise has no access to network information.
The net result is that a patient can receive care from a non-network provider without realizing it, having any practical ability to prevent it, or even knowing it occurred until a bill arrives.
The No Surprises Act, which took effect in January 2022, was intended to address this problem, and it has led to meaningful improvements. But it has not eliminated surprise billing entirely. Ground ambulance services — which are far more common than air ambulance transports — remain outside the law’s scope. In addition, ongoing litigation over the independent dispute resolution process has created new uncertainty, following earlier provider objections to how the process was implemented.
It will likely take years for the remaining questions around the No Surprises Act to be fully litigated and resolved. In the meantime, surprise bills still occur. They are less frequent than they once were, but when a single bill can reach tens or even hundreds of thousands of dollars, even one is enough to cause serious and lasting financial harm.
Provider networks aren’t always as robust (or accurate) as they should be.
Another structural drawback of provider networks is that access to care and adequacy of care are not always the same thing.
This is particularly prevalent — although by no means unique to — rural areas, where the ratio of medical providers to consumers tends to be high. In these settings, the introduction of a provider network can, and often does, require members to travel long distances to access specialty care, or in some cases any care at all. While most health coverage plans include provisions to waive network requirements when travel distances become unreasonable, obtaining such waivers can be tedious, time-consuming, and frustrating.
The issue is further complicated by the fact that some health coverage plans intentionally use narrow (“skinny”) networks as a cost-control strategy. In addition, so-called “ghost networks” remain a persistent problem: providers may technically be in-network but not accepting new patients, unaware of their network status, or no longer practicing at all. Making matters worse, provider directories are not always kept fully up to date. Providers who are no longer in-network may still appear in network guides, while participating providers may be missing entirely.
There is legislation currently under debate aimed at addressing ghost networks, which are especially prevalent among mental health practitioners. Additional proposals would impose guardrails around the accuracy and maintenance of provider directories. However, as of this writing, few of these measures have been enacted. The practical result is that consumers cannot always rely on provider directories, making it difficult to identify in-network care — particularly in situations where provider choice is already limited.
This reality is why benefit specialists routinely advise consumers to confirm a provider’s network status before every visit. It’s also why we continue to push for better systems and clearer accountability. Networks remain necessary — but they are not as reliable as they need to be.
Provider networks can disrupt continuity of care.
Because health coverage is governed by insurance contracts, there is no guarantee that a provider’s network status will remain stable over the life of a policy. In fact, it is far more common for provider contracts and insurance policy documents to operate on different timelines. This disconnect is one of the reasons I launched the Network Contract Watch — to give consumers visibility into negotiations that could result in significant network changes.
When a provider leaves a network entirely or terminates participation in a specific plan, the consequences can be severe. This is especially true for patients in the middle of an ongoing course of treatment. Compounding the problem is the fact that provider–payor negotiations are typically treated as proprietary. They can — and often do — take place with little or no public disclosure, and there is no guarantee that anyone outside the negotiating room will have advance notice of a termination.
All fifty states have continuity-of-care laws intended to mitigate this disruption. However, these protections have meaningful limitations. Most notably, self-funded health plans may or may not be subject to state continuity-of-care mandates, depending on how the statutes are written. (As part of their due diligence processes, brokers and employers frequently review self-funded contracts to confirm whether continuity provisions are included.)
Even when continuity-of-care protections do apply, they are usually narrow. Eligibility typically requires prior approval and extensive documentation, is subject to strict time limits, and is often applied per condition rather than per patient. A member might qualify for continuity of care for cancer treatment, for example, but not for ongoing management of hypertension — even if both are treated by the same provider.
What many consumers do not realize is that this instability is not accidental. Like any negotiation, provider–payor contract discussions rely on leverage, and the possibility of termination is a powerful one on both sides. That leverage helps restrain costs and produce savings — but it also introduces uncertainty, anxiety, and the risk of care disruption at the same time.
In Conclusion
Provider networks carry real benefits. That much is indisputable. Equally indisputable, however, is that provider networks also create problems — and those problems are not minor. Stronger structures for administrative and financial management come with tradeoffs, and those tradeoffs often surface at the worst possible moments.
Members can still experience surprise bills, access delays, network inadequacies, and disruptions to ongoing care. Employers absorb confusion, dissatisfaction, and ultimately reduced productivity. Providers trade autonomy and stability for volume and predictability — along with administrative complexity and occasional inaccuracies. Payors, meanwhile, face a constant tension between cost control and access.
The fact that things are better than they once were does not mean they are as good as they can be. Nor is it evidence that provider networks are failing or have failed. Instead, these drawbacks are evidence that provider networks are a foundational component of health care delivery in the United States. And like any foundational system, they carry both benefits and costs — neither of which can be wished away.