- CMS has issued a proposed rule the agency says will streamline the 2016 managed care regulatory framework for the Medicaid and the Children's Health Insurance Program. The new structure aims to "support state flexibility and local leadership; and promote transparency, flexibility, and innovation in care delivery," the agency said.
- The proposed rule, developed alongside a working group with state Medicaid directors, aims to create flexibility by setting "meaningful network adequacy standards" that account for new service delivery models like telehealth and removing "outdated" regulations such as requirements that govern how plans communicate with beneficiaries and barriers to transitioning new services and populations into managed care.
- One key change in the proposal would allow states some flexibility with provider network adequacy standards by allowing them to choose a quantitative access standard outside of time and distance.
States aren't the only ones to lambaste the regulatory provisions made to Medicaid managed care in 2016. This summer, a Government Accountability Office (GAO) report found six types of payment risks associated with managed care, four of which were related to payment from states to managed care organizations (MCOs) and two that were related to payments from MCOs to states.
Those payments stack up. Federal spending on services paid for under Medicaid managed care totaled $171 billion in 2017, almost half of the total federal Medicaid expenditures for that year. The GAO report called for greater oversight of the program.
CMS is hoping this proposed rule, if finalized, will help states reduce administrative burden and allow them to better manage their Medicaid and CHIP programs.
"Today's action fulfills one of my earliest commitments to reset and restore the federal-state relationship, while at the same time modernizing the program to deliver better outcomes for the people we serve," CMS Administrator Seema Verma said in a statement. "I want to thank the state workgroup and the CMS team for their diligent work in analyzing these complex regulations and coming forward with a common sense approach to right-size our regulatory oversight and let states focus more on delivering quality health care to their beneficiaries."
CMS noted that while states had previously "expressed their concerns" about the 15-day length of stay limitation for beneficiaries in an institution for mental disease, a regulation set in 2016, it is not proposing any changes to that policy at this time.
National enrollment for Medicaid slipped 1.5% to 74.2 million Americans this year, a drop of 1.1 million people. Despite the dip, Medicaid managed care has actually expanded in recent years. Over the past five years, 21 million people have been added to Medicaid managed care plans.
This year, however, is the first year since the Affordable Care Act that the Medicaid managed care market shrunk, having seen the fewest number of Medicaid managed care payers due to consolidation. Seven Medicaid plans were bought in the past year, including purchases by Centene, Magellan and McLaren.
According to Modern Healthcare, CMS is also drafting a proposed rule set for release in May of 2019 that would make it easier for states to stop paying for non-emergent medical transportation for Medicaid beneficiaries, a move that would likely anger providers and patient advocates.