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That article talks about fines for overstating their networks -- stating in marketing materials that they had more participating doctor availability in given region(s) than they actually had availability for all policies offered. False advertising, in a sense.They weren't falsely bragging about numbers in marketing materials, they were listing specific doctors at specific addresses in their tools for finding in-network doctors that were not in their network or were not at that address. Different from geographic density but related.
> That is very different from the problem statement: how do you make a network offer inducements at a loss to recruit additional providers?
It's really not complicated: by saying they can't operate in a certain area without a sufficient network. They either recruit more doctors or they pack up.
Perhaps you're missing that insurance companies in California don't usually operate statewide? I assume this is common across the country. The key is that care has to be available near your house or workplace. When applying for insurance you are specifically offered companies that have coverage in those areas (often at the county or city level of granularity).
You can't sign up for an insurance policy at the other end of the state from a company's network of doctors and expect them to sign up doctors around you, because, again, if they don't have sufficient density of doctors where you are, they don't cover people there in the first place.
> There is no element of law that says to an underwriter, "Hey, you gotta add more providers in this area and that area now, or we will punish you." The law doesn't give government that power.
Yes, it really really does.