Traditional Medicare has no network. A beneficiary in traditional Medicare can see any physician, visit any hospital, consult any specialist who accepts Medicare — and virtually every licensed physician and accredited hospital in the country does. The coverage decision is straightforward: is the provider Medicare-participating? If yes, the beneficiary is covered.
Medicare Advantage has a network. The plan contracts with a defined set of providers. Those providers are in-network; every other licensed physician and accredited hospital in the country is out-of-network. Seeing an out-of-network provider may cost substantially more, may require plan approval, or may not be covered at all, depending on the plan type. The beneficiary’s access to care is bounded not by the national Medicare program but by the contracting decisions of a private insurer whose financial interest is in keeping that network — and the cost of care delivered through it — as small as the regulatory floor allows.
The regulatory floor is the critical question. And the record on what that floor requires, how it is measured, and how reliably it is enforced reveals a gap between what “network adequacy” means in CMS regulations and what it means for a 74-year-old who needs an oncologist.
How Networks Are Built
Medicare Advantage plans construct their provider networks through contracting — negotiating with hospitals, physician groups, and specialty practices to become in-network providers. The plan sets the reimbursement rates it will pay those providers; providers that accept the rates sign on, providers that decline do not.
The financial logic of network construction is straightforward. Providers who command higher reimbursement rates — high-volume academic medical centers, nationally recognized cancer centers, subspecialty practices with limited competition in their market — cost more for the plan to include. Including them makes the plan’s network more comprehensive and attractive to beneficiaries who need those providers. Excluding them reduces the plan’s cost structure and increases margin on each enrollee who uses the network.
The plan’s financial interest is not to build the most comprehensive network possible. It is to build a network that is sufficient to attract enrollment — primarily healthy enrollment, as documented in Article 03 — while keeping network costs as low as the market will bear. The beneficiary who is 65, healthy, and enrolling in Medicare Advantage because of the dental coverage does not evaluate the network for oncology subspecialty access. She evaluates it for cost and for whether her current primary care physician is included. The plan that excludes the regional cancer center may be less attractive to a beneficiary currently managing cancer. It is not less attractive to the healthy 65-year-old the marketing machinery is designed to reach.
This is the connection between network construction and favorable risk selection documented in Article 03. The network is not an incidental product of contracting negotiations. It is a tool of risk management — designed to attract the enrollees whose care needs do not require the providers the network excludes.
What the OIG Found: The Directory Problem
Before a Medicare beneficiary can evaluate whether their current providers are in-network, they need an accurate provider directory. CMS requires Medicare Advantage plans to maintain provider directories — searchable lists of in-network physicians, hospitals, and facilities — and to keep them current.
In 2017, OIG conducted a systematic review of Medicare Advantage provider directory accuracy across a national sample of MA plans. The finding: more than 52 percent of the provider directory listings examined contained at least one inaccuracy. The inaccuracies included providers listed as accepting new patients who were not, providers listed at incorrect locations, providers who had left the network but remained listed, and providers with incorrect contact information.
A directory inaccuracy rate exceeding 52 percent means that a beneficiary relying on the plan’s directory to verify whether a specific provider is in-network — the standard step a beneficiary takes before scheduling care — faces better than even odds that the directory information is wrong for at least some listed providers.
The consequences of directory inaccuracy for the Medicare-eligible population are not theoretical. A beneficiary who checks the directory, confirms their cardiologist is in-network, schedules a procedure, and then receives an out-of-network bill — because the directory was wrong and the cardiologist had left the network — is not in a position to recover that cost easily. The plan’s recourse is to appeal; the practical barriers to appeals documented in Article 08 apply equally to coverage disputes arising from directory errors.
CMS has issued guidance and rulemaking addressing provider directory accuracy. The April 2023 final rule (effective for contract year 2024) required MA plans to implement regular directory update processes and respond to reported inaccuracies within specified timeframes. Compliance with these requirements and the enforcement record against plans that fail to maintain accurate directories is an area where CMS’s oversight capacity — auditing the directories of hundreds of plans covering 33 million beneficiaries — remains a practical constraint on how completely the regulatory requirement translates to directory accuracy on the ground.
The Specialist Access Gap
The network adequacy standards CMS applies to Medicare Advantage plans are built around time and distance: a beneficiary must have access to each required provider type within a specified number of miles and minutes of travel from their home county. CMS requires plans to contract with a minimum number of providers in 12 specialty categories — cardiology, oncology, and orthopedics among them — sufficient to serve the plan’s enrolled population within the defined time and distance parameters.
What the time and distance standards do not require is that the network include any specific provider within those parameters. A plan that contracts with one cardiologist within the required distance in a given county meets the standard — even if every other cardiologist in that county, including the high-volume heart failure specialist at the regional academic medical center, is out-of-network.
The exclusion of academic medical centers and nationally recognized specialty facilities from MA networks is a documented pattern, not an isolated exception. These facilities — major cancer centers, complex cardiac surgery programs, transplant centers — represent the highest-cost inpatient care in the country. They are also the facilities whose exclusion matters most when a beneficiary develops cancer, requires cardiac surgery, or needs a transplant evaluation. Plans that exclude them meet CMS’s time and distance standards while substantially restricting the beneficiary’s access to the most sophisticated care in their region.
Research has consistently documented that MA networks exclude high-volume academic and specialty facilities at higher rates than traditional Medicare would imply. A beneficiary in traditional Medicare with a cancer diagnosis can be referred to the nearest National Cancer Institute-designated comprehensive cancer center with full Medicare coverage. A beneficiary in a Medicare Advantage plan whose network does not include that facility faces either out-of-pocket costs or care at an in-network facility that may not offer the same subspecialty expertise.
The beneficiary discovers this not at enrollment — the plan’s marketing materials do not advertise which cancer centers the network excludes — but at diagnosis, when the clinical stakes are highest and the practical capacity to switch coverage is most constrained.
Geographic Variation: Where the Gap Is Widest
Medicare Advantage network adequacy varies substantially by geography. In large urban markets with multiple competing hospital systems and large physician groups, MA plans typically have broader networks with more specialty options — the density of available providers makes meeting adequacy standards easier, and competition for enrollment creates some pressure toward more comprehensive networks.
In rural markets, the network adequacy problem is compounded by an underlying provider scarcity that exists independent of MA network construction. Rural communities that have lost hospitals to consolidation-driven closure — documented in the Hospital Consolidation hub — may have only one or two hospitals within a reasonable distance. If neither contracts with a given MA plan, there may be no in-network inpatient option within the plan’s coverage area. The time and distance standard that requires a provider within a specified distance is moot if no provider within that distance has contracted with the plan.
GAO documented that from 2013 through 2015, CMS applied its network adequacy criteria to less than 1 percent of all existing MA networks annually — reviewing primarily networks in counties where plans were newly entering or expanding, not the full existing network stock (GAO-15-710). This means the vast majority of operating MA networks were not routinely evaluated against CMS’s own standards in any given year. The network adequacy requirement that was never evaluated is a requirement that exists on paper.
CMS has tightened its network adequacy review process in subsequent years, codifying standards in regulation and expanding the review scope. The adequacy of those reforms relative to the documented gap between standards on paper and networks in practice remains an ongoing question in Medicare Advantage oversight.
Out-of-Network Costs and the Discovery Problem
When a Medicare Advantage beneficiary receives care from an out-of-network provider — whether by choice, by directory error, or by emergency — the cost-sharing consequences can be substantial. HMO-type MA plans, which represent a large share of enrollment, typically do not cover out-of-network care at all except in emergencies — and more than half of all MA enrollees are in HMO plans. PPO-type MA plans cover out-of-network care at higher cost-sharing — but that cost-sharing can reach the plan’s out-of-pocket maximum, which CMS caps at $9,350 in-network for 2025 and $9,250 for 2026. The average out-of-pocket limit actually faced by enrollees in 2026 is $5,421 for in-network services and $9,825 for combined in-network and out-of-network exposure — figures that represent real financial exposure for beneficiaries on fixed incomes whose care requires out-of-network providers (KFF, 2026).
The No Surprises Act, effective January 1, 2022, addressed surprise billing in emergency situations — requiring that emergency care be billed at in-network rates regardless of provider network status. The Act’s protections do not extend to non-emergency care at out-of-network facilities that a beneficiary chooses or that are the only option available. A beneficiary whose MA plan does not include the nearest cancer center who chooses to receive cancer treatment there anyway — because the clinical case for that center is strong — is not protected from out-of-network billing by the No Surprises Act. For the more than half of MA enrollees in HMO plans, there may be no out-of-network coverage at all for non-emergency care.
The discovery problem runs through the entire network adequacy issue: beneficiaries learn about network limitations at the point of need, not at enrollment. The healthy 65-year-old evaluating MA plans during the Annual Enrollment Period is not comparing oncology network depth. She is comparing premiums, dental benefits, and whether her primary care physician is listed in the directory. The limitations she discovers at 74 — when the directory was wrong, when the cancer center is out-of-network, when the specialist she needs is not contracted with the plan — are the limitations she was not positioned to evaluate when she enrolled.
The Tiered Network Structure
Many Medicare Advantage plans operate tiered networks — distinguishing between preferred and non-preferred in-network providers, with different cost-sharing levels for each tier. A beneficiary who sees a non-preferred in-network specialist pays more than one who sees a preferred in-network specialist, even though both are technically “in-network.”
The tiered structure creates a second layer of network limitation beyond the in-network/out-of-network divide. A plan that contracts with a major medical center but places it in the non-preferred tier has technically included it in the network while making access financially costly. The beneficiary who sees that facility faces higher cost-sharing that may function as a practical deterrent.
The existence of tiered networks is disclosed in plan documents but is not prominently featured in enrollment advertising. Plan comparison tools display plan-level cost-sharing structures but do not display tier assignments for specific providers — a beneficiary cannot easily determine, during the enrollment period, whether the specific hospital they would want to use is in the preferred or non-preferred tier.
What the Gap Means
Medicare Advantage’s network structure is not a flaw in the program’s design. It is the design. A program that routes Medicare coverage through private insurers who are paid a fixed monthly amount per enrollee and whose financial interest is in minimizing the cost of care will construct networks that minimize the cost of care. Excluding high-cost providers, maintaining directories that may be inaccurate, and building networks to the minimum required by time and distance standards rather than to the maximum the Medicare-eligible population’s clinical needs would suggest — these are rational expressions of the program’s financial architecture.
The beneficiary bears the consequence of that architecture at the moment of greatest clinical need: cancer diagnosis, cardiac event, stroke, complex surgery. That is when the network limitations become coverage failures — and when the options for switching coverage, returning to traditional Medicare, or affording out-of-network care are most constrained by the beneficiary’s health, finances, and practical capacity to navigate the system.
Traditional Medicare’s answer to the network adequacy question is to have no network. The answer has administrative advantages — any Medicare-participating provider is covered, no directory is necessary, no time and distance standard is required because no contracting structure creates a coverage boundary. The privatization decision that created Medicare Advantage replaced that answer with a network-based coverage structure whose adequacy depends on the contracting decisions of private insurers whose interests are oriented against comprehensive access.
The complete Medicare Advantage series
01 — What Medicare Advantage Actually Is — and How It Replaced Traditional Medicare
02 — The Political History: How Private Insurers Got Into Medicare
03 — The Marketing Machine: How Enrollment Works and Who It Targets
04 — Risk Adjustment: The Payment System That Rewards Diagnosis, Not Treatment
05 — The $84 Billion Overpayment: How Upcoding Works at Scale
06 — The Profit Extraction Model: What Insurers Take Before Care Is Delivered
07 — Prior Authorization in Medicare Advantage: What OIG Found
08 — The Denial and Appeals Record: What Happens When Enrollees Push Back
09 — Network Adequacy and the Coverage Gap
10 — The Extra Benefits Myth: Dental, Vision, and What the Fine Print Says
11 — When Medicare Advantage Fails: Disenrollment at the End of Life
12 — The Reform Proposals: From Audit Reform to Elimination
13 — What the Evidence Resolves — and What It Doesn’t
This article was researched and drafted with AI assistance under human review. See our full AI and editorial practices.