CMS Release Proposed Changes to Medicaid Managed Care Rule

ANCOR will share a deeper analysis of the managed care rule in the coming weeks – note that the rule issued by the Centers for Medicare and Medicaid Services (CMS) last week seeks to pull back and make specific changes to the managed care rule that finalized by the Obama Administration in 2016. The reshaping of this rule has been a major goal of CMS under the Trump Administration. As shared by the Centers for Medicare and Medicaid Services (CMS):

“To reduce state administrative burden and enhance the ability of states to effectively manage their Medicaid and CHIP programs, these key proposed revisions to the 2016 final rule would include:

Promoting Flexibility

• Providing states with greater flexibility to develop and certify a rate range under specific conditions and limitations, including that the rate range be actuarially sound;
• Removing barriers that made it difficult to transition new services and populations into managed care because of existing fee-for-service payment arrangements by providing states with a three year transition period to come into compliance with requirements related to pass-through payments;
• Providing states more flexibility to set meaningful network adequacy standards using quantitative standards that can take into account new service delivery models like telehealth;
• Removing outdated and overly prescriptive administrative requirements that govern how plans communicate with beneficiaries to better align with standards used across federal programs and enable the use of modern means of electronic communication when appropriate.

Strengthening Accountability

• Requiring CMS to hold ourselves accountable to issue guidance to help states move more quickly through the federal rate review process and to allow for submission of less documentation in certain circumstances while providing appropriate oversight to ensure patient protections and fiscal integrity;
• Maintaining the requirement for states to develop a Quality Rating System (QRS) for health plans to facilitate beneficiary choice and promote transparency, but with greater ability for states to tailor an alternative QRS to their unique program while requiring a minimum set of mandatory measures to align with the Medicaid and CHIP Scorecard.

Maintaining and Enhancing Program Integrity

• Maintaining the current regulatory framework for program and fiscal integrity, including provisions related to the actuarial soundness of rate setting, provider screening and enrollment standards, and medical loss ratio (MLR) standards;
• Strengthening federal requirements to protect federal taxpayers from cost shifting by prohibiting states from retroactively adding or modifying risk-sharing mechanisms and ensuring that differences in reimbursement rates are not linked to enhanced federal match.”