CMS unveils new rules for Medicaid managed care

Article from the AMA Morning Rounds, 4/26/16.

The AP (4/26, Alonso-Zaldivar) reports that on Monday, the Federal government “set new standards for Medicaid private insurance plans, which in recent years have become the main source of coverage for low-income people.” These rules impact “insurers operating as Medicaid middlemen in 39 states and Washington, DC,” which currently cover some 66 percent of about 70 million Medicaid beneficiaries. The article points out that the rules, which have not been updated in more than a decade, “specify that insurance companies must guarantee access to certain types of service providers, and that at least 85 percent of what insurers get paid must be spent on medical care.”

Healthcare Finance News (4/25, Morse) says that the regulation “aligns key rules and practices with those of marketplace and Medicare Advantage, including the addition of reporting medical loss ratio to Medicaid to ensure managed care plans focus on delivering care, not profits, CMS said.” The announcement by Slavitt and Wachino also explained that the changes “modernize the way managed care health plans operate so that Medicaid and CHIP continue to provide cost-effective, high quality care to consumers.”

Modern Healthcare (4/25, Dickson, Herman, Subscription Publication) reports that the 1,425-page rule, which was proposed nearly a year ago, “requires states to more rigorously supervise the adequacy of plans’ provider networks, encourages states to establish quality rating systems for plans, allows more behavioral healthcare in institutional settings and promotes the growth of managed long-term care.” The article explains that many states have turned to managed care in order to reduce costs, yet, some critics maintain that “managed Medicaid insurers…offer inadequate provider networks and deny needed care to pad their bottom lines.”