- The Centers for Medicare and Medicaid Services on Tuesday revealed a long-awaited Medicaid managed care "uber rule" that has already drawn criticism from private Medicaid plans for a provision that sets the medical loss ratio at 85%.
- The proposed rule would also tighten regulations on provider networks, extending minimum time and distance standards to behavioral health providers, OB-GYNs and dentists. Currently, similar rules are in place only for primary care physicians.
- States would also have to provide greater transparency in rate determination under the draft rule, a significant change for the 26 states and D.C. that currently provide only ranges to CMS.
The word "sweeping" might be over-used with regards to new draft rules from this agency, but in this case it's accurate: The 700-page document is not only exhaustive, but it's the first guidance issued for Medicaid managed-care plans in over 10 years. CMS says in the rule that it is intended to "ease the administrative burden on issuers and regulators" and provide "an appropriate level of protection for enrollees."
The MLR provision of the rule is a suggestion, not an enforced requirement, but if states follow through, it could "destabilize the programs that are developed on a state level," said Jeff Myers, the president and CEO of Medicaid Health Plans. By and large, the status quo does not meet the federal suggestion: In a CMS review of 167 managed-care plans in 35 states, the agency found that one in 10 had an MLR below 79%. One in four had one below 83%.
Myers told The Hill that he has strongly encouraged CMS not to follow through with the MLR hike, comparing the rule to a Swiss watch: "There are a lot of moving parts, but you know deep down, it's going to be very expensive," Myers said.
Interim AHIP CEO Dan Durham has also fired back at the provision: "An arbitrary cap on health plans' administrative costs could undermine many of the critical services—beyond medical care—that make a difference in improving health outcomes for beneficiaries, such as transportation to and from appointments, social services, and more," Durham said in a statement.
Currently, 30 million people are enrolled through managed care, accounting for about two-thirds of Medicaid beneficiaries. In 1991, only 2.7 million people were enrolled through managed care.