CMS Releases Medicaid Managed Care Final Rule
April 27, 2016
Earlier this week,
the Centers for Medicare & Medicaid Services (CMS) released its long-awaited Medicaid managed care final rule in an effort to modernize the regulations to reflect changes in the usage
of Medicaid managed care organizations (MCO) as well as to better align with
rules governing Medicare Advantage and private insurance.
The final
rule—which is more than 1,400 pages long and is the first major update to the
regulations in more than a decade—will:
- Address network adequacy, actuarial soundness, and consumer access
- Include certain beneficiary protections and enhance policies
related to program integrity
- Subject Medicaid MCOs to medical loss ratios of 85 percent,
requiring them to spend at least that percentage of their Medicaid revenue
on quality-improving initiatives and medical care (private plans already are
subject to medical loss ratios)
- Establish Medicaid and Children’s Health Insurance Program first
quality rating system (similar to the Medicare Advantage Program’s star
rating system)
One item of concern to the hospital community
is that through this rule, CMS eventually prohibits states from making certain
supplemental payments to hospitals and other providers that serve Medicaid managed
care enrollees. As currently written, there is a ten-year period during which
states and Medicaid plans must transition to systems where payments are
directly linked to quality.
The final rule is important to Pennsylvania
hospitals and health systems because:
- More
than 80 percent of Pennsylvania’s Medicaid beneficiaries now receive health
care through HealthChoices
- Pennsylvania
has been very successful in achieving coverage for low-income children in its
CHIP program and securing high participation by providers
- The
Pennsylvania Department of Human Services is working to implement a managed
long-term services and supports program, which could impact care delivery for
low-income elderly and persons with disabilities
HAP provided comments about the rule when it was
issued in draft form last year. The final rule tracks closely to the proposed
rule, with little modification. HAP continues to analyze the final rule and will
provide members with additional information.
For more information, contact Jolene Calla, HAP’s vice president, health
care finance & insurance, or Norris Benns,
HAP’s vice president, insurance and managed care.