November 16, 2018
2 min read

CMS Proposes Revisions to Improve Medicaid, CHIP Managed Care

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CMS recently proposed a new rule to relieve regulatory burdens, strengthen accountability, enhance program integrity and promote transparency, innovation and flexibility in the Medicaid and CHIP managed care regulatory framework, according to a press release.

“Today’s action fulfills one of my earliest commitments to reset and restore the federal-state relationship, while at the same time modernizing the program to deliver better outcomes for the people we serve,” Seema Verma, administrator of CMS, said in the release.

Many states and stakeholders argued that the 2016 managed care final rule included many unnecessary provisions that added costs and administrative burdens without improving health outcomes, according to the release. In response, CMS created a group with the National Association of Medicaid Directors and state Medicaid Directors to review areas of concern.

The proposed changes to the 2016 final rule include:

  • allowing a 3-year period for states to transition new services and populations into managed care and comply with requirements related to pass-through payments;
  • giving more flexibility to states to create meaningful network adequacy standards;
  • eliminating requirements that regulate how plans communicate with beneficiaries;
  • holding CMS accountable to offer guidance to states in moving through the federal rate review process efficiently;
  • requiring states to create a unique Quality Rating System for their program to help facilitate beneficiary choice and promote transparency;
  • maintaining essential elements of the regulatory framework for program and fiscal integrity, such as the security of rate setting, provider screening and enrollment standards and medical loss ratio standards; and
  • strengthening protections for federal taxpayers regarding cost shifting by banning states from modifying risk-sharing mechanisms.

CMS noted that states also expressed concerns with the 15-day limitation on the length of stay in an institution for managed care beneficiaries for mental disease, but stated that it is not proposing changes to the requirement now and is soliciting data from states to support revisions of the policy.

Disclosure: Verma is the administrator of CMS.