Leased Networks: A Flexible Option for Self-Funded Health Plans

For a multiemployer health plan or Taft-Hartley Fund, building a proprietary provider network is rarely a realistic option. Direct contracting requires significant administrative infrastructure, dedicated contracting expertise, and the kind of covered-lives volume that most funds simply cannot bring to the table on their own.

That’s where a leased network comes in. Rather than building provider relationships from scratch, a fund accesses an established network through a third-party arrangement, gaining access to pre-negotiated rates, a credentialed provider roster, and geographic coverage that would otherwise take years to build.

This article explains how a leased network works, how it compares to other network access models, and what Fund administrators and trustees should evaluate when considering a network rental arrangement.

What Is a Leased Network?

A leased network, sometimes called a rented network or network rental, is an arrangement in which a health plan gains access to a network of contracted providers without holding those provider contracts itself. The network owner, typically a third-party administrator (TPA), carrier, or specialty network organization, has already negotiated rates, credentialed providers, and built the administrative infrastructure. The plan effectively licenses access to that infrastructure for a fee.

Members covered under the plan can use participating providers and receive the benefit of pre-negotiated discounts. Claims are repriced according to the contracted rates and processed through the fund’s TPA. From the member’s perspective, the experience is largely indistinguishable from a plan that owns its own contracts.

The term “leased network” is sometimes used interchangeably with “network rental” or “network access arrangement.” The mechanics are the same regardless of terminology: the plan is accessing contracted provider relationships it does not own.

Why Leased Networks Matter for Multiemployer Plans

The multiemployer plan context presents specific challenges that make leased network access particularly practical.

Most Taft-Hartley Funds cover members across a region, often in a single metropolitan area or across a handful of states, with a covered population that may range from a few hundred to several thousand members. That population size is rarely sufficient to negotiate competitive rates directly with major health systems or specialty providers. A leased network gives the Fund access to rates that were negotiated on the basis of much larger volume, without the Fund needing to provide that volume itself.

There is also the question of administrative capacity. Building and maintaining a proprietary network requires dedicated staff for credentialing, contracting, provider relations, and ongoing compliance. Most fund offices are not staffed for that work. Leasing access through a network partner transfers that operational burden to an organization built to handle it.

For funds whose members work across multiple trades or geographic areas, a leased network also provides the breadth of coverage that would be difficult to replicate through direct contracting alone.

How a Leased Network Arrangement Works

The basic structure of a network rental arrangement involves three parties: the network owner, the Fund or plan, and the members.

The network owner, which may be a TPA that owns its own network, a regional PPO, or a national network organization, maintains contracts with hospitals, physicians, and other providers. Those contracts specify reimbursement rates, billing requirements, and other terms.

The Fund enters into an agreement with the network owner to access those contracts. The agreement typically specifies the geographic scope of access, the fee structure, and the terms under which claims will be repriced. Fees are often structured on a per-member-per-month basis or as a percentage of savings, though arrangements vary.

When a member receives care from a participating provider, the claim is submitted to the Fund’s TPA, repriced according to the contracted rates, and paid accordingly. The Fund benefits from the discount without having to negotiate it directly.

Leased Network vs. Other Network Access Models

It helps to understand how leased network access compares to the other options available to multiemployer plans.

Direct Contracting

The Fund negotiates and holds its own provider agreements. This model offers the most control over pricing and network composition but requires significant administrative capacity and a covered population large enough to bring to the negotiating table. It is generally realistic only for the largest funds or those with strong regional concentration.

Leased Network Access

The Fund accesses contracts owned by a network partner. Lower administrative burden, faster setup, and access to rates negotiated on larger volume. Less direct control over network composition and provider relationships. This is the most common model for small to mid-sized multiemployer plans.

Wrap Networks

Some funds use a hybrid approach: a primary leased network for core coverage, supplemented by a wrap arrangement to fill geographic or specialty gaps. This can be useful for funds with members concentrated in a specific region who also need some national reach.

Reference-Based Pricing

Rather than accessing a contracted network, the plan reimburses providers at a defined percentage of Medicare rates, regardless of whether they are contracted. This eliminates the need for a leased network but introduces balance billing risk and requires member support infrastructure to manage provider disputes.

For most multiemployer plans, leased network access represents the best balance of cost savings, administrative simplicity, and member experience.

What to Evaluate in a Leased Network Arrangement

Not all leased network arrangements deliver the same value. Fund administrators and trustees evaluating a network rental option should examine several key factors before entering an agreement.

Network Adequacy for Your Member Population

The first question is whether the network actually covers where your members live and work. A network with broad national reach may still have gaps in the specific markets your members depend on. Before entering any arrangement, confirm that participating providers in the right specialties and service areas are available in sufficient numbers.

For Taft-Hartley Funds, it is worth mapping your member population against the network’s provider data to identify any gaps before they become member complaints.

Who Owns the Network?

There is a meaningful difference between accessing a network owned by the organization you are working with and accessing a sub-leased network, where the organization you contract with is itself accessing another party’s contracts. Sub-leasing arrangements can introduce additional layers of fees, less transparency into provider terms, and limited ability to resolve issues at the contract level.

A network owner, by contrast, controls the provider relationships directly, which means faster resolution of credentialing questions, more transparent pricing, and greater flexibility for plan-specific arrangements.

Fee Structure and Savings Transparency

Understand exactly how the arrangement is priced. Per-member-per-month fees provide predictability. Percentage-of-savings models can be cost-effective when volumes are lower but require clarity on how savings are calculated. Ask for sample repricing data that shows the effective discount achieved on actual claims, not just the maximum discount available.

Provider Stability and Retention

A network is only as valuable as the providers who participate in it. Ask about the network’s provider retention rates and the process for handling contract terminations. Gaps created by provider departures can disrupt member care and create out-of-network exposure.

Credentialing Standards

Confirm that the network has rigorous credentialing practices and that providers are re-credentialed on a regular basis. Funds have a fiduciary obligation to their members, and the quality of the provider network is part of that obligation.

Integration with Your TPA

Leased network access is only as functional as the integration between the network and your TPA’s claims processing system. Confirm that the repricing process is automated and reliable, and that there is a clear escalation path for claims disputes or repricing discrepancies.

Frequently Asked Questions

How long does it take to set up a leased network arrangement?

Setup timelines vary depending on the network partner and the complexity of the fund’s existing plan structure, but most arrangements can be operational within 60 to 90 days. The primary steps involve executing the access agreement, confirming TPA integration, and communicating network information to members. Funds transitioning from another network arrangement may need additional time to manage the changeover and update member-facing materials.

Can a fund negotiate custom terms within a leased network arrangement?

It depends on the network partner. Some arrangements are essentially take-it-or-leave-it, with standardized rates and terms across all accessing plans. Others, particularly with network owners that have direct provider relationships, allow for plan-specific configurations, geographic carve-outs, or tiered access structures. Funds with specific needs around network composition or pricing should ask about customization options before entering an agreement.

Can a fund use a leased network alongside its existing TPA?

In most cases, yes. The leased network arrangement typically integrates with the Fund’s existing TPA for claims repricing and payment. Confirm compatibility between the network and your TPA’s systems before entering an agreement.

How are provider disputes handled under a leased network arrangement?

The process varies by network. With a network owner, disputes are typically resolved at the provider relations level by the organization that holds the contract. Sub-leased arrangements may involve additional steps. Clarify the escalation process before signing any agreement.

What happens if a provider leaves the network?

Provider terminations are a normal part of network management. Ask your network partner about their provider retention rates, how terminations are communicated, and what continuity-of-care protections are in place for members who are mid-treatment when a provider exits the network.

Explore MagnaCare’s Network Rental Options

MagnaCare owns its provider network, which means the organization you contract with is the same one managing provider relationships directly. That translates to greater transparency, more consistent pricing, and a faster path to resolving issues when they arise.

If your fund is evaluating network access options, contact us to discuss your coverage needs and see how network rental can work for your plan.