The rule puts an end to overly prescriptive regulations that stakeholders have complained about since 2016, according to CMS Administrator Seema Verma.
The Centers for Medicare & Medicaid Services (CMS) on Monday released the 2020 Medicaid and Children's Health Insurance Program (CHIP) Managed Care final rule. The rule, which finalizes policies from the Notice of Proposed Rule Making issued in November 2018, provides states with greater flexibility to develop and implement managed care programs, including setting rates and establishing adequate provider networks.
CMS said the final rule was meant to improve federal oversight and state flexibility while maintaining beneficiary protections and providing high quality of care for the 55 million beneficiaries who are enrolled in Medicaid managed care plans. This also includes the 79 percent of CHIP children in 32 states who enrolled in CHIP managed care plans. The rule puts an end to overly prescriptive regulations that stakeholders have complained about since 2016, according to CMS Administrator Seema Verma.
“This rule represents a concerted effort to transform Medicaid to improve quality and access for its beneficiaries,” Verma said in an announcement. “This will remove the burden on states while ensuring appropriate oversight of managed care organizations. The government should identify expected outcomes, results, and standards – not micromanage processes.”
Among the key changes:
Capitation rates: Under the 2016 rule, states had to receive approval from CMS for specific rates for each covered Medicaid population. The final rule allows states to set rates for each population up to 5 percent to address minor program changes without submitting a revised rate certification. The provision takes effect July 1. The rule also specifies that differences in the assumptions, methodologies, or factors used to develop capitation rates for covered populations must be based on valid rate development standards that represent actual cost differences in providing services and not vary from the rate of federal financial participation that would increase federal costs.
Pass-through payments: Beginning July 1, states that transition Medicaid beneficiaries or services from fee-for-service to a managed care delivery system may require plans to make pass-through payments up to three years.
Risk-sharing mechanisms: The final rule prohibits states from adding or modifying risk-sharing agreements after the start of the rating period.
Network adequacy standards: CMS will no longer require states to set time and distance standards for network adequacy. States can set quantitative network adequacy standards and may define “specialists” in whatever way they deem appropriate.