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.

Click here to read more.

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.

Click here to read more.