Health Reform WK-EDGE Benefits and challenges discussed
Thursday, April 18, 2019

Benefits and challenges discussed

By Harold Bishop, J.D.

Medicaid expansion and the aging U.S. population has led to the growth in, and need to understand, Medicare and Medicaid managed care organizations.

Benefits, challenges, and new developments for Medicare and Medicaid managed care organizations (MCOs) were the focus of a Health Care Compliance Association (HCCA) webinar presented by attorneys Pam Felkins Colbert and Denise M. Leard of Brown & Fortunato.

Leard explains that under managed care, health benefits and services are provided through plans offered by Medicare Advantage (MA) MCOs and MCOs offering Medicaid plans. These organizations contract with CMS to provide health care benefits and receive a set per member, per month (capitation) payment for these services from CMS. While the goal of these plans is to reduce Medicare and Medicaid costs to the government, Leard points out that these MCOs take the risk that the capitation payments may not cover their per member costs.

The importance of MCOs is growing, according to Leard, because MA plan enrollment has continued to grow from 16.8 million (31 percent of the Medicare population) in 2015 to 22.6 million (36 percent) in 2019. In addition, Leard reports that the Medicaid expansion under section 2001 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) has resulted in 39 of 50 states having a least one Medicaid MCO as of September 2017.

Benefits and challenges. The benefits of MCOs to beneficiaries, according to Leard, are coordination of care and additional benefits, such as drug coverage, telehealth, lower cost-sharing, gym memberships, and care for chronic diseases. Leard describes the challenges faced by MCOs as dealing with the complexities of federal and state oversight, contract negotiations with providers and CMS, and complaints from providers and enrollees, appeals, and litigation.

Colbert cautions that MCOs must ensure that beneficiaries have sufficient access to care, choice of providers, an adequate network, and a responsive grievance and appeals process. She also points out that MCOs must have a written compliance program; adequately monitor their internal, network, and claims processes; and meet the reporting requirements of CMS (for MA MCOs) or the state (for Medicaid MCOs). In addition, MCOs contracts must set forth requirements for reporting, its network of providers, and marketing.

New developments in Medicaid MCOs. On November 14, 2018, CMS published a Medicaid managed care proposed rule which set forth several goals (see CMS seeks to ease up on Medicaid Managed Care regs, November 14, 2018). According to Leard, the proposal is favorable to MCOs and would: (1) promote flexibility in limited, actuarially sound rate ranges; (2) set meaningful network adequacy standards and new service delivery models like telehealth: (3) encourage electronic communications with beneficiaries when appropriate; (4) strengthen CMS accountability to issue guidance to states for rate reviews, provide appropriate oversight to ensure patient protections and fiscal integrity, issue requirements for the Quality Rating System to help beneficiary choice, and promote transparency; (5) maintain and enhance program integrity; (6) set actuarially sound capitation rates and network adequacy standards; (7) facilitate processes for appeals and grievances; and (8) adopt applicable proposals for medical loss ratio standards.

Attorneys: Pam Felkins Colbert and Denise M. Leard (Brown & Fortunato).

IndustryNews: NewsStory AccessNews InsurerNews ManagedCareNews MedicaidExpansionNews MedicarePartCNews ProgramIntegrityNews QualityNews ReportingTransparencyNews

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