By Rachel Morgan
The Center for Medicare and Medicaid Services (CMS) released the final rule to govern the operation of Medicaid and Children’s Health Insurance (CHIP) Programs that offer benefits and services through a managed care delivery system.
Over the years, states have increasingly utilized managed care arrangements to provide Medicaid coverage to beneficiaries.
In 1992, only 8 percent of all Medicaid beneficiaries accessed part or all of their Medicaid benefits through capitated health plans. By 2013, 45.9 million or 73.5 percent of all Medicaid and 81 percent of all separate CHIP beneficiaries accessed all or part of their benefits through a managed care organization. Currently, 39 states and the District of Columbia contract with private managed care plans to furnish services to Medicaid beneficiaries, and almost two thirds of the 72 million Medicaid beneficiaries are enrolled in managed care.
The final rule is designed to:
- Support states’ efforts to advance delivery system reform and improvements in quality of care for Medicaid and CHIP beneficiaries.
- Strengthen the consumer experience of care and key consumer projections.
- Strengthen program integrity by improving accountability and transparency.
- Align rules across health insurance coverage programs to improve efficiency and help consumers who are transitioning between sources of coverage.
- Ensure appropriate beneficiary protections.
- Enhance policies related to program integrity.
Key Features of the Final Rule
- Establishes Medicaid’s first Quality Rating System and clarifies states’ authorities to enter into contracts that pay plans for quality or encourage participation in alternative payment models and other delivery system reform efforts.
- Revises state and managed care plan standards in the areas of enrollment, communications, care coordination, and the availability and accessibility of covered services.
- Establishes mechanisms for providing support, education, and a central contact for complaints or concerns, including assistance with enrollment, disenrollment, and the appeals process for consumers requiring long term services and supports.
- Offers flexibility for plans to cover inpatient short-term mental health services, which are an important tool in addressing behavioral health issues.
- Establishes network adequacy standards in Medicaid and CHIP managed care for key types of providers, while leaving states flexibility to set the actual standards.
- Requires additional transparency on how Medicaid rates are set to ensure the fiscal integrity of Medicaid managed care programs, including with respect to data relating to utilization and quality of services.
- Improves alignment of the reporting of medical loss ratios with the Medicare Advantage program and the Marketplace, Medicaid plans’ appeals processes with those of other programs, and Medicaid’s requirements for disseminating consumer information with private market best practices to improve the consumer experience for those who transition between coverage programs and ease administrative burden on issuers participating in multiple programs.
The provisions of the rule will be implemented in phases over the next three years, starting on July 1, 2017. The final rule is scheduled to be published in the Federal Register May 6, 2016, but may be viewed on display here (1425 page PDF file).
Additional Resources
CMS has prepared several documents summarizing key provisions of the final rule as follows:
NCSL staff is preparing a summary and materials on the final rule to assist states in determining their needs to comport their laws and programs to the new requirements.
NCSL State-Federal Relations Staff Contacts: Joy Johnson Wilson, federal affairs counsel, Health and Human Services policy director or Rachel B. Morgan RN, BSN, senior committee director, Health Human Services Committee.
Rachel Morgan is the senior committee director for the NCSL Standing Committee on Health and Human Services.
Email Rachel