CMS plans to alleviate regulatory burdens in the Medicaid managed care program by promoting flexibility, strengthening accountability, and enhancing program integrity under a new set of regulatory proposals. The proposed regulatory changes are set out in an advance release of a proposed rule which is scheduled to publish in the Federal Register on November 14, 2018. CMS Administrator Seema Verma referred to the proposal as a step as a fulfillment on CMS’ commitment to "reset and restore the federal-state relationship."
The 2016 final rule. A 2016 final rule substantially rewrote the Medicaid managed care regulations (see CMS modernizes Medicaid managed care, May 6, 2016), with, for example, new requirements that managed care organizations calculate and report a medical loss ratio (MLR). The latest proposal seeks to again update the managed care program, this time by rolling back some of the 2016 changes. The proposal to alleviate some of the managed care regulations comes in response to state and stakeholder concerns that the 2016 regulations are "unnecessarily prescriptive" and add "unnecessary costs and administrative burden" to the managed care program.
Flexibility. CMS proposes to increase program flexibility by allowing states to develop their own managed care rate range, provided that the rate is actuarially sound. The proposal also seeks to allow states to develop their own meaningful network adequacy standards, which are supportive of new delivery methods like telehealth. The proposal would also eliminate antiquated beneficiary communication requirements to take better advantage of electronic communication opportunities.
Accountability. If finalized, the proposal would require CMS to issue guidance to help states navigate the federal rate review process. As part of the effort to update that review process, CMS is also proposing to lessen documentation requirements. The proposal seeks to allow states greater flexibility in designing a Quality Rating System (QRS) tailored to their unique managed care program. However, the proposal would require QRSs to include a minimum set of mandatory measures.
Program integrity. The proposal would largely leave program integrity provisions of the 2016 final rule intact, including provisions related to the actuarial soundness of rate setting, provider screening and enrollment standards, and MLR standards. The proposal also includes a provision to protect taxpayers by preventing states from retroactively adding or modifying risk-sharing mechanisms.
Comments. CMS is specifically seeking comments on the 2016 final rule’s limitation of 15 days on lengths of stay for managed care beneficiaries in an institution for mental disease (IMD). In order to be considered, comments must be received within 60 days of the rule’s publication in the Federal Register.
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