CMS Proposes New Regulations Governing Medicaid Managed Care Plans

The Centers for Medicare and Medicaid Services (CMS) proposed extensive new regulations governing the provision of Medicaid and Child Health Insurance Program (CHIP) benefits through managed care plans. The regulations are intended to modernize oversight of Medicaid managed care to promote delivery system reform, improve health outcomes and beneficiary experience, strengthen the ability of states to measure and improve the quality of care delivered through managed care and promote strategies for value-based purchasing through managed care plans. The proposed regulations also aim to promote the effective use of data in managed care oversight, and engagement in health information exchange.

The following is a high-level summary of key provisions of the proposed regulations, with a focus on those impacting plans that cover, and providers that deliver Long Term Services and Supports (LTSS).

Alignment of Medicaid Managed Care Regulations with Qualified Health Plan (QHP) and Medicare Advantage Regulations

The proposed regulations include the following provisions to align certain Medicaid managed care requirements with requirements applicable to QHPs and Medicare Advantage plans:

Permit marketing communications by QHPs to Medicaid beneficiaries in order to help beneficiaries transition between products in the event of changes in their eligibility status.
Modify processes to align appeals and grievance procedures, including timeframes, notice standards and the process for seeking a fair hearing.
Create a national Medical Loss Ratio (MLR) standard of at least 85 percent for Medicaid managed care plans, and incorporate that MLR into Medicaid managed care rate setting to ensure that rates are actuarially sound.

Modification of Standard Managed Care Contract Provisions

The proposed regulations amend various required provisions of the standard contracts between states and managed care plans, including the following:

Require LTSS that could be authorized under a waiver or a 1915i or 1915(k) state plan amendment to be delivered in accordance with the federal home and community-based setting standards.
Require managed care plans that cover dual eligibles to sign a Coordination of Benefits Agreement and participate in the automated crossover process administered by Medicare.

Managed Care Rate Setting

The proposed regulations include provisions to improve the transparency and consistency of the framework for setting managed care premiums. They require states to adhere to a new definition of "actuarially sound" capitation rates and to develop rates in accordance with various federal rate approval standards.

Subcontracts and Delegation

The proposed regulations provide that any responsibilities delegated by the managed care plan to another entity must be carried out in compliance with the plan’s contract with the state. Even if responsibilities are delegated, the proposed regulations would clarify that the plan alone is accountable for compliance with all of the requirements of its contract with the state.

Program Integrity

The proposed regulations would require all managed care network providers to be screened and enrolled by the state into the Medicaid Fee-for-Service (FFS) program. Providers would not be required to render services to FFS beneficiaries; they would merely have to be enrolled in the program. The regulations would also require states to audit the encounter and financial data submitted by managed care plans at least once every three years. In addition, the regulations strengthen compliance program requirements and apply those requirements to certain subcontractors of plans.

Beneficiary Protections

The proposed regulations would modify beneficiary protections by:

Creating federal standards for enrollment in managed care plans that support informed choices by beneficiaries, including enrollment in financial alignment models, such as FIDA. These standards include the provision of up to 14-days of FFS benefits for newly-eligible beneficiaries while they select a plan.
Limiting “without cause” disenrollment from managed care plans to one disenrollment within 90 days of initial enrollment per enrollment period.
Allowing beneficiaries receiving LTSS to change plans at any time, if their provider is terminated from the plan’s network.
Requiring states to establish a Beneficiary Support System (BSS) to assist beneficiaries before and after enrollment in a plan. The BSS would be required to provide the the following services in connection with beneficiaries who need long term services and supports:
- an access point for complaints;
- education and assistance in grievances and appeals and the state fair hearing process; and
- review and oversight of LTSS program data to identify and resolve systemic issues.
Requiring plans to authorize services in a manner that does not disadvantage beneficiaries with ongoing chronic conditions or LTSS needs.
Modifying the timeframe for expedited authorization determinations from 3 working days to 72 hours after receipt of a request.
Requiring the continuation of benefits pending the resolution of the state fair hearing process, regardless of the duration of the original authorization period.
Aligning Medicaid care coordination requirements with Medicare Advantage and Marketplace plans.
Requiring states to establish mechanisms to identify for managed care plans the beneficiaries who may need LTSS.
Establishing standards for assessments and treatment/service plans for beneficiaries who may need LTSS.
Applying a new definition of LTSS focused on supporting the ability of the beneficiary to live or work in the setting of his/her choice, which may include his/her home, a provider-owned residential setting, a nursing facility or other institutional setting.
Proposing that states establish time and distance standards for LTSS providers participating in Managed Long Term Services and Supports (MLTSS) programs.
Specifying the inclusion of MLTSS quality considerations in the states’ quality assessment and performance improvement programs;
Requiring states to establish a stakeholder group to obtain input into the MLTSS program from beneficiaries, providers and other stakeholders.
Requiring plans to maintain a member advisory committee that includes a reasonably representative sample of the covered LTSS population.

Comments on the proposed regulations are due by 5 p.m., Mon., July 27, 2015. In commenting, please refer to file code CMS-2390-P. To submit comments via email, click here.

Contact: Karen Lipson, klipson@leadingageny.org, 518-867-8383 ext. 124.