Tuesday, May 3, 2016

3 Medicaid Mega-Reg Provisions Take Center Stage

In reporting the announcement of new rules updating managed care in Medicaid and the Children’s Health Insurance Program (CHIP), the media focused on three key provisions.

On April 25, the Centers for Medicaid and Medicare Services (CMS) finally released the rules aimed at overhauling Medicaid and Children's Health Insurance Program (CHIP) managed care plans. The new rules set the standards for modernizing the entire Medicaid managed care delivery system. This happens to be the first update to managed care regulations in more than a decade.

The lengthy ruling - more than 1,400 pages long - was broken down by the media. ManagedCareBiz, which keeps track of how the media reports on managed care issues, found that of all the provisions of the new regulation, the news media highlighted these three items:

- The new rules will establish a Medicaid managed care quality rating system to assist Medicaid recipients in picking a plan.

- The new rules will set a minimum medical loss ratio (MLR) of 85 percent for Medicaid. This means that profits of insurers will be limited as plans will spend a minimum of 85 percent of their intake on medical expenses rather than on administrative expenses.

- The new rules will require states to guarantee access to doctors and hospitals. The standards will include “time and distance” maximums to ensure physicians are not too far from the plan members.

News reports pointed out that the provision on quality ratings will have the most impact to the public as it will give consumers more information about the health plans available. It is comparable to the existing Medicare Advantage star rating system, which goes to show that the CMS is bringing Medicaid managed care in the same direction as Medicare Advantage.

Consumer advocates have been pushing the government for many years to come up with stricter standards for managed care plans. They believe that these plans have often favored profits over patients.

Other provisions of the new managed care rules for Medicaid and CHIP include:

- Requiring plans to regularly update directories of doctors and hospitals. (According to Kaiser Health News, a 2014 investigation by the Department of Health and Human Services’ inspector general found that half the doctors listed in official insurer directories weren’t taking new Medicaid patients.

- Pushing plans to better detect and prevent fraud by providers, including mandatory reporting of suspected abuse to the states.

- Making it easier for states to offer managed-care plans incentives to improve clinical outcomes, reduce costs and share patient information among hospitals and doctors.

The new regulation will be implemented in phases over the next three years, starting July 1, 2017. The CMS recognizes this as a major step forward in the administration’s efforts to strengthen Medicaid as well as CHIP which offers low-cost coverage to children in some families that don’t qualify for Medicaid.

With all of these changes happening, there is no better time to discuss and dissect Medicare managed care than today. If consumers have much of their attention on these three key takeaways, particularly the Medicaid managed care quality rating system, what are industry professionals focusing on? It will be interesting to see which provisions of the new Medicaid managed care regulation stand out for health care executives and other managed care professionals.

About the author:

Rene Macapinlac is the Director of Operations at ManagedCareBiz, an online resource for managed care professionals who need to stay up-to-date on industry news, analysis and commentary.

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