Wednesday, May 27, 2015

CMS Issues Proposed Rule Addressing Managed Care Regulations

Narda Ipakchi

The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule addressing managed care regulations; this is the first update to the regulations governing Medicaid managed care organizations (MCOs) since 2002. The impact of this regulation is significant given the size and scope of Medicaid managed care programs nationwide. According to CMS, 39 states have contracts with comprehensive managed care organizations, and 20 states have implemented managed care programs that incorporate long term services and supports. 

Agency officials have indicated that the proposed rule includes additional guidelines for states on how to set rates for MCOs, strengthened network adequacy standards, and further alignment of Medicaid managed care regulations “with existing commercial, Marketplace, and Medicare Advantage regulations.” In addition, the proposed rule addresses requirements concerning delivery of Medicaid managed long term services and supports (MLTSS), which has not been included in previous version of the regulation. Highlights of the proposed rule include:

Managed Long-term Services and Supports (MLTSS) Programs
The proposed regulation would implement best practices identified in existing MLTSS programs and create requirements specifically tailored for MLTSS populations. For example, CMS proposes that states establish time and distance standards specifically for MLTSS programs as part of the Agency’s efforts to strengthen network adequacy requirements.

Beneficiary Experience
The proposed regulation includes provisions that would improve the beneficiary’s experience in enrollment, communications from the state and managed care plans, care coordination, and the availability and accessibility of covered services.

State Delivery System Reform
The proposed regulation supports states’ efforts to encourage delivery system reform initiatives within managed care programs that strive to improve health care outcomes and beneficiary experience while controlling costs.

Quality Improvement
The proposed regulation sets forth a quality framework focused on transparency, alignment with other systems of care, and consumer and stakeholder engagement. The proposed rule would require a quality strategy for a state’s entire Medicaid program and also establish a Medicaid managed care quality rating system that would include performance information on all health plans and align with the existing rating systems in Medicare Advantage and the Marketplace.

Program and Fiscal Integrity
The proposed regulation includes provisions that would strengthen the fiscal and programmatic integrity of Medicaid managed care programs and rate setting by clarifying actuarial soundness requirements.

Alignment with Medicare Advantage and Private Coverage Plans
By aligning standards, where appropriate, the proposed rule would improve operational efficiencies for states and health plans, which in turn will improve the experience of care for individuals who transition between health care coverage options.

The proposed rule would align the CHIP managed care regulations, where appropriate, with the proposed revisions to the Medicaid managed care rules in order to ensure CHIP beneficiaries the same quality and access in managed care programs. 

Next Steps
AHCA will hold a conference call for all members this Friday, May 29, at 3 PM (EDT). Details regarding this call are forthcoming in a separate e-mail which you will receive by COB tomorrow. During this call, we will provide a preliminary assessment of the proposed rule and considerations for nursing facilities.

In addition, over the course of the next week, we will review the proposed rule in its entirety and will provide a detailed summary which will address the potential areas and process for comment. AHCA will continue to monitor any developments in this area and will keep you apprised of any additional announcements. If you have questions, suggestions or concerns, please contact Narda Ipakchi at

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