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CMS's Final Rule on Medicaid Managed Care: A Summary of Major Provisions

Issue Brief
  1. 81 Fed. Reg. 27498-27901 (May 6, 2016), available at https://www.federalregister.gov/articles/2016/05/06/2016-09581/medicaid-and-childrens-health-insurance-program-chip-programs-medicaid-managed-care-chip-delivered. The proposed rule was published at 80 Fed. Reg. 31098-31297 (June 1, 2015), available at https://www.federalregister.gov/articles/2015/06/01/2015-12965/medicaid-and-childrens-health-insurance-program-chip-programs-medicaid-managed-care-chip-delivered.

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  2. Medicaid Managed Care Enrollment and Program Characteristics, 2014, Centers for Medicare and Medicaid Services (CMS), https://www.medicaid.gov/medicaid-chip-program-information/by-topics/data-and-systems/medicaid-managed-care/downloads/2014-medicaid-managed-care-enrollment-report.pdf

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  3. Share of Medicaid Population Covered under Different Delivery Systems, State Health Facts, Kaiser Family Foundation, https://www.kff.org/medicaid/state-indicator/share-of-medicaid-population-covered-under-different-delivery-systems/

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  4. 81 Fed. Reg. 27501 (May 6, 2016), available at https://www.federalregister.gov/articles/2016/05/06/2016-09581/medicaid-and-childrens-health-insurance-program-chip-programs-medicaid-managed-care-chip-delivered.

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  5. CMS lacks statutory authority to apply Medicaid rate-setting standards and certification requirements to CHIP.

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  6. Under current law, managed care plans already are prohibited from discriminating on the basis of disability under the Americans with Disabilities Act and Section 504 of the Rehabilitation Act.

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  7. CMS recently finalized Section 1557 regulations.  81 Fed. Reg. 31376-31473 (May 18, 2016), https://www.federalregister.gov/articles/2016/05/18/2016-11458/nondiscrimination-in-health-programs-and-activities?utm_campaign=subscription+mailing+list&utm_medium=email&utm_source=federalregister.gov.

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  8. Beneficiary support system services are eligible for FFP at the 50% administrative match rate. Entities providing choice counseling are subject to existing HHS independence and conflict-of-interest requirements.

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  9. Choice counseling includes answering beneficiary questions and identifying factors to consider when choosing among plans and providers. It does not include making recommendations for or against enrollment in a specific plan.

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  10. Assistance with navigating the appeals process does not include representation of beneficiaries in appeals.

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  11. The required terms to be defined include appeal, co-payment, durable medical equipment, emergency medical condition, emergency medical transportation, emergency room care, emergency services, excluded services, grievance, habilitation services and devices, health insurance, home health care, hospice services, hospitalization, hospital outpatient care, medically necessary, network, non-participating provider, physician services, plan, preauthorization, participating provider, premium, prescription drug coverage, prescription drugs, primary care physician, primary care provider, provider, rehabilitation services and devices, skilled nursing care, specialist, and urgent care.

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  12. These are languages spoken by a significant number or percentage of potential enrollees and enrollees who have limited English proficiency throughout the state and in each plan’s service area and identified according to a methodology established by the state. CMS does not set a particular threshold to identify prevalent non-English languages.

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  13. Large print is at least 18-point font.

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  14.  CMS notes that all states presently do have websites.

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  15. CMS had proposed but did not finalize a provision that would have required states to provide a minimum 14 calendar day “choice period” during which beneficiaries could obtain services on a FFS basis while they evaluated their managed care plan options and mad a choice. CMS concluded that the 14-day FFS period would delay access to care coordination and was incompatible with state efforts to effectuate plan enrollment at the point of Medicaid eligibility determination or soon thereafter.

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  16. CMS indicates that it will engage in public notice and comment if it decides to specify additional provider types.

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  17. Current regulations require states to consider anticipated Medicaid enrollment and utilization, the characteristics and health needs of different populations, provider participation status, including the number not accepting new Medicaid patients; providers’ and enrollees’ geographic location (considering distance, travel time, and ordinary means of transportation); and specified other factors.

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  18. Indian health care providers (IHCP) mean programs operated by the Indian Health Service or by an Indian Tribe, Tribal Organization, or Urban Indian Organization.

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  19. This is in addition to providing the documentation at the time they first enter into a state contract, as required under current regulations.

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  20. States can, effectively, receive federal matching funds for capitation payments made for enrollees with stays up to 30 days if the stay does not exceed 15 days in a single month. CMS notes that state Medicaid programs can cover short-term residential SUD treatment in IMDs longer than 15 days under a new §1115 demonstration opportunity, provided that such coverage complements broader SUD system reforms and specific program requirements are met. See State Medicaid Director Letter #15-003, July 2, 2015, https://www.medicaid.gov/federal-policy-guidance/downloads/SMD15003.pdf.

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  21. CMS, Guidance to States using 1115 Demonstrations or 1915(b) Waivers for Managed Long Term Services and Supports Programs (May 2013), available at: http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Delivery-Systems/Downloads/1115-and-1915b-MLTSS-guidance.pdf. See also: Kaiser Commission on Medicaid and the Uninsured, Key Themes in Capitated Medicaid Managed Long-Term Services and Supports Waivers (Nov. 2014), available at https://www.kff.org/medicaid/issue-brief/key-themes-in-capitated-medicaid-managed-long-term-services-and-supports-waivers/.

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  22. Centers for Medicare and Medicaid Services, Guidance to States using 1115 Demonstrations or 1915(b) Waivers for Managed Long Term Services and Supports Programs  (May 2013), available at http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Delivery-Systems/Downloads/1115-and-1915b-MLTSS-guidance.pdf; see also Kaiser Commission on Medicaid and the Uninsured, Key Themes in Capitated Medicaid Managed Long-Term Services and Supports Waivers (Nov. 2014), available at https://www.kff.org/medicaid/issue-brief/key-themes-in-capitated-medicaid-managed-long-term-services-and-supports-waivers/.

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  23. 42 C.F.R. § 441.301(c)(4).

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  24. The final rule also provides that services supporting enrollees with ongoing or chronic conditions or who require LTSS must be authorized in a manner that reflects their ongoing need for such services and supports.

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  25. The current requirement that rates must be appropriate for the populations to be covered and the services to be furnished under the contract continues to apply.

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  26. States have flexibility to impose a higher minimum MLR standard as long as the rates are adequate for reasonable and appropriate costs.

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  27. CMS did not finalize its proposed requirement that states have a comprehensive quality strategy for services provided through all delivery systems, including FFS as well as managed care.

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  28. CMS did not finalize the proposed provision that would have required states to review and approve MCOs, PIHPs, and PAHPs based on performance standards at least as stringent as those used by an accreditation entity recognized by CMS to accredit Medicare Advantage or Marketplace plans. However, states retain their existing authority to require accreditation of plans.

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  29. CMS would do so after consulting with states and other stakeholders and following a public comment process.

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  30. An EQRO may not review any plan, or a competitor operating in the state, over which the EQRO exerts control or which exerts control over the EQRO. Nor may an EQRO review any plan for which it has conducted or is conducting an accreditation review within the previous three years.

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  31. Under current rules, states develop these protocols.

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  32. The final rule retains current requirements that the report contain the methods of data and analysis, conclusions drawn from the data, and recommendations for improving the quality of services furnished by each plan, and requires comparative information about all MCOs, PIHPs, PAHPs, and PCCM entities consistent with the EQR protocols issued by the Secretary (previously, states defined this information).

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  33. CMS determined that it lacks statutory authority to provide a 75% federal match for EQR for entities that are not MCOs.

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  34. CMS clarifies that these providers will not be required to serve as Medicaid FFS providers.

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