Medicaid Managed Care Rates and Flexibilities: State Options to Respond to COVID-19 Pandemic
The Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Paycheck Protection Program and Health Care Enhancement Act provide $175 billion in provider relief funds to reimburse eligible health care providers for health care related expenses or lost revenues that are attributable to coronavirus. HHS has allocated $15 billion to Medicaid providers however, there have been some delays and challenges in applying for these funds and the allocation may not be sufficient to remedy the fiscal issues faced by some providers.
Abelson, Reed. “Major U.S. Health Insurers Report Big Profits, Benefiting from the Pandemic.” The New York Times. Aug. 5, 2020. https://www.nytimes.com/2020/08/05/health/covid-insurance-profits.html (accessed Aug. 12, 2020).
These requirements apply to comprehensive risk-based plans as well as limited-benefit plans (e.g., those providing only dental or behavioral health services).
MACPAC, Setting Per Capita Caps: Significant differences between current methods and those anticipated under financing reforms, March 2017, https://www.macpac.gov/wp-content/uploads/2017/03/Setting-Per-Capita-Caps.pdf.
MACPAC, Payment Policy in Medicaid Managed Care, June 2011, https://www.macpac.gov/wp-content/uploads/2011/06/Payment-Policy-in-Medicaid-Managed-Care.pdf.
Centers for Medicare & Medicaid Services (CMS), “2020-2021 Medicaid Managed Care Rate Development Guide For Rating Periods Starting between July 1, 2020 and June 30, 20211,” July 2020, https://www.medicaid.gov/medicaid/managed-care/downloads/2020-2021-medicaid-rate-guide.pdf.
Kathleen Gifford, et al., A View from the States: Key Medicaid Policy Changes: Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2019 and 2020 (Washington, DC, Kaiser Family Foundation (KFF), Oct. 2019), https://www.kff.org/medicaid/report/a-view-from-the-states-key-medicaid-policy-changes-results-from-a-50-state-medicaid-budget-survey-for-state-fiscal-years-2019-and-2020/.
CMS Coronavirus COVID-19 Stakeholder Calls. Friday, April 10, 2020 CMS Medicaid and CHIP All State Call, https://www.cms.gov/Outreach-and-Education/Outreach/OpenDoorForums/PodcastAndTranscripts.
Although the proposed rule at CMS would prohibit states from implementing retroactive risk mitigation strategies, given the unique and unanticipated circumstances presented by the COVID-19 pandemic CMS will consider state requests to retroactively amend or implement risk mitigation strategies (e.g., risk corridors) only for the purpose of responding to the COVID-19 pandemic
CMS, COVID-19 Frequently Asked Questions (FAQs) for State Medicaid and Children’s Health Insurance Program (CHIP) Agencies (last updated June 30, 2020), https://www.medicaid.gov/state-resource-center/downloads/covid-19-faqs.pdf (pgs. 83-84 V.C.6).
CMS Coronavirus COVID-19 Stakeholder Calls. Friday, March 27, 2020, CMS Medicaid & CHIP All State Call, https://www.cms.gov/Outreach-and-Education/Outreach/OpenDoorForums/PodcastAndTranscripts.
Some plans may include certain services in their contract with the state (e.g., pharmacy, NEMT, dental) but may subcontract these services to other entities.
The proposed MCO rule pending at CMS would make some changes to minimum fee schedule arrangements for directed payments.
CMCS Informational Bulletin, May 14, 2020, “Medicaid Managed Care Options in Responding to COVID-19,” https://www.medicaid.gov/sites/default/files/Federal-Policy-Guidance/Downloads/cib051420.pdf.
CMS will require the implementation of a two-sided risk corridor when states implement state-directed payments intended to mitigate impact of the public health emergency.