On May 26, 2015, the Centers for Medicare & Medicaid Services (CMS) proposed a rule to modernize Medicaid and Children’s Health Insurance Program (CHIP) managed care regulations. The goal was to update the programs’ rules to strengthen the delivery of quality care for beneficiaries. This proposed rule is the first major update to Medicaid managed care organizations (MMCOs) and CHIP managed care regulations since 2003.
The proposed rule is intended to improve beneficiary communications and access, provide new program integrity tools, support state efforts to deliver higher quality care in a cost-effective way, and better align Medicaid and CHIP managed care rules and practices with other sources of health insurance coverage. Overall, this proposed rule merges the rules associated with Medicaid managed care with those from other sources of health insurance coverage, such as Qualified Health Plans and Medicare Advantage plans. CMS is proposing that Medicaid managed care groups align their standards with those in the private marketplace to create more uniform practices across states.
The health care delivery landscape has changed substantially over the last several years. The growth of managed care in the Marketplace, Medicaid and Medicare Advantage further highlights the importance of policy alignment, when appropriate, across programs in order to ease the transition for consumers whose circumstances change during the year. The regulations are yet another example of the national healthcare accountability model that we have said is slowly emerging in America as CMS takes on the lead policy-making role in all lines of business.
CMS’ proposed rule to modernize Medicaid managed care regulations include additional requirements around:
- Medical Loss Ratio (MLR), including setting a minimum MLR for MMCOs. While many states practice either a minimum MLR or shared rebate approach with MCOs, this is the explicit dictate to states to coincide with existing ones in the Exchange and related products and Medicare.
- Network adequacy and access to providers, including standards to evaluate provider access and a focus on accuracy of network information provided to beneficiaries.
- Quality measures, including greater standardization of metrics across states and plans, potentially in the form of a star ratings system similar to the one found in Medicare Advantage. As we have noted in our podcasts and blogs in the past, the MMP demonstration is already on the way toward establishing a quality bonus program which will set the stage for a full-scale adoption for Medicaid proper.
- Actuarial analysis and rate setting, including federal oversight of rate setting and a more detailed, regimented process for ensuring actuarial soundness. This is an important consideration for plans as rate-setting and what has led to rate inadequacy has stymied important reform efforts in the states in the past.
- Continuity of care, including alignment of enrollment practices between Medicaid fee-for-service, MMCOs, and exchange coverage.
- Public reporting and transparency, including stronger public reporting and transparency requirements for MMCOs and states.
The proposed rule, intended to improve the quality and efficiency of care delivered to Medicaid enrollees, also adds new complexities to the operational side of Medicaid, including more reporting, more quality measurements and greater transparency. It would also ensure appropriate beneficiary protections and enhance policies related to program integrity. Overall, the proposed rule supports CMS’ mission of better care, smarter spending and healthier beneficiaries.
This proposed rule makes a clear policy statement that CMS intends for Medicaid programs to catch up with the rest of the health care system.
Health plans, providers, service vendors, the states, and other interested parties have the opportunity to comment on CMS’ comprehensive proposal no later than 5 p.m. on July 27, 2015.