CMS Releases Proposed Rule Intended To Modernize Medicaid Managed Care

CMS has released a proposed rule that updates its Medicaid managed care organization (MCO) regulations. The last time CMS updated MCO rules was in 2002.

In the rule, CMS calls for health plans to dedicate a minimum portion of the rates they receive toward medical services – a threshold known as a medical loss ration (MLR). Plans doing business with Medicaid and the Children’s Insurance Program are the only health plans that aren’t subjected to the MLR. The Obama administration is now proposing an 85% threshold for Medicaid managed-care plans.

Experts say the MLR that CMS has proposed for Medicaid plans is a suggestion and not an enforceable mandate. However, many plans will still be affected if states follow through on the agency’s suggestion. Over the past four years, Medicaid managed-care enrollment has increased by 48% to 46 million beneficiaries.

The rule would impose new standards to ensure beneficiaries have adequate provider networks. The new rule would require plans extend time and distance standards for specialists, such as OB/GYNs, behavorial health specialist and dentists. The rule also includes a provision that would require greater transparency in how states determine whether the rates they pay are sufficient to cover the services required under the contract.

Furthermore, the rule includes a section on managed Medicaid long-term care. In the rule, CMS would allow participants enrolled in Medicaid Long-Term Services and Supports (MLTSS), to switch plans or disenroll and switch to fee-for-service if their provider is not in-network for the managed care plan.

Click here to see the proposed rule.

Click here to the CMS press release.

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GAO: Small Percentage Of Medicaid Enrollees Cost The Most

According to newly released findings from the Government Accountability Office (GAO), only 5% of Medicaid-only eligible enrollees accounted for nearly 50% of the billions of government dollars paid in Medicaid-only eligible claims between 2009 and 2011. Unlike the high-cost 5% group, the least expensive 50% of Medicaid-only enrollees accounted for less than 8% of the expenditures for those enrollees. For fiscal year 2013, Medicaid expenditures totaled about $460 billion, covering 72 million enrollees -some of whom were eligible for Medicare, too. The GAO suggests CMS improve efforts to manage expenditures and facilitate improvements to care by identifying additional information about Medicaid-only eligible enrollees responsible for a high proportion of expenditures.

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Important Medicaid Decision Issued By U.S. Supreme Court

The United States Supreme Court has decided that Medicaid providers do not have the right to sue state Medicaid programs when a state allegedly has failed to comply with federal Medicaid law regarding the setting of payment rates. In the case, Armstrong v. Exceptional Child Center, Inc., the Supreme Court “decided that there is not private right of action under the Supremacy Clause of the U.S. Constitution for a provider of services to sue a state Medicaid program to enforce the federal Medicaid law that requires rates to be set at a level sufficient to secure access to care for Medicaid beneficiaries to the same extent available to individuals with private health insurance.”

Medicaid providers have long challenged Medicaid payment rates under the Supremacy Clause of the Constitution. The constitutional provision established that federal law preempts any conflicting state law. The Court of Appeals had previously ruled that healthcare providers had a “private right of action” under the Supremacy Clause to enforce the “equal access” provision of federal Medicaid law as it related to payment rates. However, in the Exceptional Child Center case, the Supreme Court reversed the Court of Appeals, establishing that the Supremacy Clause does not grant any right of action itself. Instead, the provision just tells a federal court how it must decide when there is a conflict between a state and federal law. The Exceptional Child Center case is a home care related case as it is concerns payment rates for habilitation services for developmentally disabled children.

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Several States No Longer Plan On Expanding Medicaid

Several states are now leaning toward or have outright abandoned all plans to allow expansion of their Medicaid programs. Most recently, Wyoming rejected plans to expand its Medicaid program via provisions offered under the Affordable Care Act. Representatives for Kansas have also told reporters that the state is not planning on scheduling hearings on three different bills allowing for Medicaid expansion. So far, 29 states have formally adopted Medicaid expansion, while the rest have either rejected adoption or are still considering it. Medicaid program enrollment has been growing exponentially under the new health law. The Obama administration announced that more than 10 million Americans have joined the Medicaid program since 2013.

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Study: Medicaid Pay Bump Helps Beneficiaries Get Appointments

According to a new study published in the New England Journal of Medicine, increasing Medicaid reimbursement for primary care services to match Medicare rates have led to increases in appointments for Medicaid patients. However, care access gains may be completely “wiped out” this year because the ACA’s provision authorizing the increase in Medicaid rates has expired. Researchers noticed an increase from 58.7% to 66.4% in the availability of primary care appointments for Medicaid beneficiaries in the surveyed areas. The increases in appointment availability were similar in states that expanded Medicaid coverage and in states that did not. With this newly available data, physicians hope the Medicaid pay bump will be extended. Average national Medicaid reimbursement to primary care physicians is expected to drop between 43% and 47% as a result of the provision ending.

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Special Notice About Medicaid Applications For Long-Term Services & Supports

We have recently been notified that effective January 5, 2015, three of the four Connecticut Long-Term Services and Supports (LTSS) Application Processing Centers will receive and process all new nursing home applications and the remaining Center will receive and process all new applications for Medicaid waivers for home and community based services. 

The Hartford office is the LTSS Application Processing Center designated to process only Medicaid waiver applications for home and community based services. The Bridgeport, New Haven and Waterbury offices are the LTSS Application Processing Centers that are designated to process applications for nursing facilities within the assigned towns and cities.

Application packets with the required documentation that is available at the time of submission should be mailed directly to the appropriate LTSS Application Processing Center. 

LTSS Applications should not be directed to the DSS ConneCT Scanning Center.

If you have any questions or concerns, please contact the DSS Benefits Center staff at 1-855-626-6632.

Report: More Than 65% Of Medicaid Is Now Managed Care

According to recently released report, Medicaid managed care may have reached a “tipping point” in 2014, as the number of managed care beneficiaries increased while fee-for-service enrollment dropped. The number of people on private managed care plans has increased by 9.3 million, while the number in traditional fee-for-service or public managed care plans decreased by 300,000. The growth can be attributed to two factors. The first is that states expanding Medicaid eligibility through the ACA are opting for private managed care for new populations. The second is that states are relying more on private plans to “better control costs and deliver services.” Typically, states achieve these cost controls by providing capitated payments to the private plans. Many long-term care providers have protested that managed care organizations may prioritize efficiency over quality care. They also believe many managed care organizations do not have the expertise in working with specialized beneficiary populations-like the ones utilizing long-term services and supports.

Click here to see the report.

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