Request A Personalized Demo
Let us show you how HealthWorksAI can optimize your Medicare Advantage product design efforts at every stage through actionable insights by leveraging public and private healthcare data.
Perspective · Medicare Advantage
Network adequacy is no longer a competitive position in Medicare Advantage. Here is how leading health plans are moving from compliance to sculpting ahead of 2027 bids.
Most network adequacy conversations inside Medicare Advantage health plans are still organized around a single question. Will we pass the next CMS check.
That question was sufficient five years ago. It is not sufficient now.
Adequacy was never designed to be a competitive moat. It was designed to be a minimum standard, a floor that protects beneficiaries from networks too thin or too far to use. The plans that have been clearing that floor every three years and calling it a strategy are about to find themselves competing against plans that cleared it years ago and have been sculpting ever since.
There is an old hockey idea that fits the moment. The triennial check is the puck dropping, not the game ending. And the plans that win the next two bid cycles will be the ones that internalized that distinction sometime around April 2026.
The network has gone from a back-office function to a front-of-margin lever. Most network teams know this. Most plans have not yet adjusted their operating model accordingly.
This piece is about that adjustment.
Why “Compliant” Is No Longer a Competitive Position
Each one changes the math on what a "good enough" network looks like.
The phase-out of the Health Equity Index is expected to pull Star Ratings down across the industry. Milliman has projected the majority of plans could lose roughly half a star in the 2027 cycle. That is not a Star problem alone. It is a margin problem.
Three levers exist for mature markets: reduce benefits, tighten utilization management, sculpt networks. The first two have been worked hard. The network lever, in most plans, has been worked the least.
UnitedHealthcare is visibly tightening referral gating . Devoted has been aggressive on network design. When the most sophisticated MA plans are sculpting publicly, every other plan is falling behind unless it is doing the same work quietly.
The competitive position is everything that comes after.
Anyone reading this who runs a network team is already nodding, because the pressure is showing up on three fronts at once.
Internal, talent, regulatory — landing on the same network team in the same quarter.
The actuarial side is sending PMPM carve-out targets that were unthinkable two years ago, landing on networks that were not built to absorb them. Networks built for commercial populations, a different SNP mix, when the MLR math was kinder. The same network that worked at one revenue level does not always work at another, and actuarial is unwilling to wait three years for the next triennial cycle to fix it.
The MA layoff wave through 2024 and into 2025 reshaped operating teams. Many people in network seats today are newer in role, promoted from adjacent functions, asked to optimize networks they did not design with less institutional memory than the role used to carry. Plans know they need to act but do not know where to start.
Hospital contract renegotiation cycles in June and December continue to scramble adequacy mid-year, and network disruption stories are no longer rare events. The plans managing all three well have stopped treating the network as a periodic compliance asset and started treating it as an operating system.
The operational shift is more concrete than it sounds.
The old model has been the default for most of MA’s history. Build the network to meet CMS adequacy. Go to market. Gather two or three years of claims, quality, and utilization data. Then sculpt. It is a two-step process, and the gap between step one and step two is where the margin leaks.
The new model collapses the gap. The network is designed around the target population from day one. Provider performance KPIs across cost, quality, utilization, and popularity inform the build itself. Adequacy is checked continuously as the network takes shape, not as a final gate. Sculpting is not a project the network team takes on after the fact. It is the way the network is constructed.
The questions a sculpting-first team is asking sound different.
“Which providers do I have in network that none of my key competitors carry, and is the cost differential worth the differentiation?”
“Which providers do my key competitors have that I do not, and is the absence costing me enrollment in counties where I want to grow?”
“Which hospital systems are driving disproportionate unit cost in my book, and what does the financial picture look like if I renegotiate the contract or replace the system?”
These are not adequacy questions. They are competitive intelligence questions. They require the ability to compare networks side by side at the NPI level, the group affiliation level, and the hospital system level, against one competitor or against the whole market.
A national MA plan suspected that two of its Ohio counties were carrying hospital contracts that none of its key competitors carried, driving outsized claims volume. A one-to-many provider network comparison surfaced the outliers. The plan terminated the right contracts and saved several million dollars without measurably affecting member access. That is a sculpting story, and it is the kind of analysis that did not exist as a routine workflow three years ago.
Here is the calendar question every network leader should be asking right now.
What does the network look like that gets submitted in the 2027 bid, and is the work that informs it happening in the right months.
April, May, and June are the leverage window for existing networks. Service area expansion design decisions for any 2027 expansion need to be in motion well before letters of intent go out in July. By the time most network teams are pulling Quest reports for the formal adequacy submission, the strategic decisions that should have shaped those networks are already locked in.
The mistake most plans make is treating adequacy testing as the final gate. Build the network, run it through Quest, fix what fails, resubmit. The leakage in that workflow is enormous. Decisions that should have been made on cost and quality grounds get made on adequacy grounds at the last minute. Sculpting becomes reactive, not strategic.
The better operating model is to check the basic adequacy gates of time, distance, and volume continuously as the network is designed, so the formal Quest run is a confirmation rather than a discovery. Quest remains the system of record for the official CMS-compliant filing. The build-time check is what keeps the strategic work and the regulatory work moving in the same direction.
The plans that build that loop in 2026 will enter 2027 with networks designed for the margin reality of the next cycle. The plans that do not will spend 2027 catching up.
The thesis is short. Adequacy is the floor. Sculpting is the ceiling. The plans that win the next two bid cycles are the ones doing the ceiling work right now, while their competitors are still organizing the file for the next CMS check.
If you run a network team and any of the pressures in this piece sound familiar, the right next conversation is about how the operating model needs to shift, not about which dashboard to buy. The platform decisions follow the strategy decisions, in that order.
If a structured walkthrough of where your network sits against your key competitors would be useful, our team is set up to run that exercise.
Book a complimentary Star Rating + Network Review with our team.
Trusted by 25+ Medicare Advantage payers
Request Your Review →