term stay of no more than 15 days in an Institution for Mental Disease, or
IMD. Notably, States will have the option – but are not required – to provide
such coverage.
Network Adequacy
CMS finalized, largely without modification, its proposal to establish network
adequacy standards in Medicaid and CHIP managed care for key types of
providers, while leaving states flexibility to set the actual standards. Upon
implementation, states will be required to establish time and distance
standards for primary care (adult and pediatric), OB/GYN, behavioral health
(mental health and substance use disorder; adult and pediatric), specialist
(adult and pediatric), hospital, pharmacy, pediatric dental, and “additional
provider types when it promotes the objectives of the Medicaid program.”
CMS finalized the proposed minimum factors that a state must consider in
developing its network adequacy standards – including but not limited to
anticipated Medicaid enrollment, expected utilization of services, and the
number of network providers not accepting new Medicaid patients – but CMS
explicitly declined to be overly prescriptive, instead preserving state flexibility
to determine network standards.
Transparency
The Final Rule seeks to improve transparency of Medicaid managed care
quality information by requiring states to post on their websites accessible
information on managed care plan accreditation status and annual external
quality reviews. CMS also requires Medicaid managed care entities to make
their provider networks and formularies available on their websites, as well as
to provide formularies including tiering information upon request.
Medical Loss Ratio
CMS finalized its proposal to impose a national MLR of 85 percent on
managed care entities in the development of their capitation rates.
This
means that insurers must spend at least 85 percent of their Medicaid revenue
on medical care and other activities that improve overall quality, while the
remaining 15 percent of Medicaid revenue may be spent on other expenses
such as marketing, overhead/salaries, and administrative tasks. Notably, 85
percent is the industry standard MLR for the Medicare Advantage program
and for large employers in the private health insurance market. States will
use the MLR calculation in their rate-setting exercises for future years.
Quality Rating Systems
To support states’ efforts to advance delivery system reform and improve
quality, the Final Rule requires states to establish a Medicaid quality rating
system developed by CMS or adopt an alternative Medicaid managed care
quality rating system that would be subject to CMS approval.
Through a
public notice and comment process, CMS will develop performance
measures and a methodology for a Medicaid managed care quality rating
system that aligns with the quality indicators for qualified health plans on the
Exchanges. States will not be required to implement a quality rating system
until three years after CMS issues guidance regarding the measures and
methodologies for its rating system. Additionally, CMS chose not to finalize its
proposal that would have given states the option to default to the Medicare
Advantage Five-Star Rating system for plans serving only dual-eligible
beneficiaries.
1.
Medicaid and Children’s Health Insurance Program (CHIP) Programs; Medicaid Managed
Care, CHIP Delivered in Managed Care, and Revisions Related to Third Party Liability,
[CMS-2390-F] (April 25, 2016).
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