CMS will gradually phase in the first quality ratings system in Medicaid and CHIP, including network adequacy standards, starting in 2017, according to a final rule out Monday that marks the agency's first major overhaul of Medicaid managed care requirements in over a decade. The rule also drew praise from state Medicaid directors for tossing out the agency's unpopular 14-day fee-for-service period before beneficiaries' are auto-enrolled in Medicaid managed care, but Medicaid managed care plans are upset the agency didn't budge from its 85 percent medical loss ratio.
The long-anticipated final rule establishes a quality rating system that mimics the one in the marketplace, but also allows states to create their own as long as the alternative provides plan performance information comparable to CMS' system. The quality ratings system will be implemented over a five-year period.
Quality provisions in the rule include: the addition of two new parts to state managed care quality strategies to help support quality goals: a plan to find and reduce health disparities, and state mechanisms to identify individuals who need long-term services and supports or who have special health care needs. Another quality provision aims to improve transparency by requiring states to post on state websites managed care plan accreditation and results of external annual quality reviews.
The National Association of Medicaid Directors urged CMS to stagger implementation of the major provisions when they were laid out in the proposed version of the regulation. But while the provisions will be phased in, Matt Salo, executive director of the NAMD, said he remains concerned about the bandwidth and resources to implement the regulation.
The final rule also creates requirements for states when setting and overseeing network adequacy standards in Medicaid and CHIP, but it offers some leeway to states to set the actual standards. States must assess and certify the adequacy of a managed care plan's provider network annually at a minimum and also when there is a big change to the program design.
Vikki Wachino, director for the Center for Medicaid and CHIP Services, said the network adequacy standards require the first-ever time and distant standards including for primary care for adults and children and behavioral health providers.
CMS also seeks to align many parts of the Medicaid and CHIP managed care appeals process to Medicare Advantage and the private market. This includes: aligning definitions and timeframes for the resolution of appeals, streamlining levels of internal appeals and requiring enrollees use the managed care plan’s internal process before proceeding to a state fair hearing.
Medicaid directors and plans were particularly pleased the 14-day fee-for-service provision was taken out.
“It would have needlessly delayed access to critical care coordination efforts for beneficiaries in heavily managed care states, and so is a victory for all involved (states, plans, beneficiaries),” Salo said.
Jeff Myers, president of Medicaid Health Plans of America, is also pleased this provision was taken out.
CMS had called this a “choice period” during which enrollees would have fee-for-service coverage before being automatically enrolled in Medicaid managed care. Myers said CMS appeared to acknowledge that this provision would have blocked enrollees' access to managed care.
But Myers is unhappy CMS decided to keep the 85 percent medical loss ratio (MLR). The rule requires Medicaid and Children's Health Insurance Program managed care plans to calculate and report an MLR that must be at least 85 percent, with MLR reports from prior years taken into account. Myers said the MLR will have unintended consequences down the road. He said requiring states to retrieve money if the 85 percent threshold is not met is “a mistake.”
Myers, however, praised CMS for sticking with its proposal on the Institutions for Mental Disease (IMD) exclusion. The final rule says states may make a capitation payment for enrollees with a short-term stay, no more than 15 days, in an Institution for Mental Disease (IMD) to address access problems for inpatient psychiatric and substance use disorder services.
Salo is also happy the IMD exclusion proposal remains in the final rule.
“We were also happy to see the IMD provisions retained, as this will give states new tools with which to address some of the increasingly untenable provisions of the underlying statute and allow states to improve the delivery of mental health services to the Medicaid population,” Salo said.
The final rule also aims to improve program integrity through a requirement that state CHIP programs screen and enroll all network providers who are not otherwise enrolled with the state to provide services to fee-for-service Medicaid beneficiaries.
CMS stresses modernized communication as well by allowing states and managed care plans to use a variety of electronic communication methods, including email and texts.
The rule also makes information about providers and prescription drugs more accessible to all consumers by requiring additional information be included in the provider directory, including information about the managed care plans' drug formulary and the provider group's affiliation.
CMS also pushes managed care plans to participate in delivery system reform, such as through patient-centered medical homes; broad-based provider health information exchange initiatives; and initiatives to improve access to providers.
Managed long-term services and supports are also addressed in the rule, including that MLTSS programs have to be implemented and run consistent with federal laws, including the Americans with Disabilities Act. -- Erin Raftery (eraftery@iwpnews.com)