The Centers for Medicare and Medicaid Services (CMS) released a pair of proposed rules on April 27, 2023 that make substantial changes to the structure of Medicaid and the Children’s Health Insurance Program (CHIP), both in the traditional fee-for-service setting and for services provided through managed care organizations (MCOs), and incorporate feedback from stakeholders in a request for information process. Of note, these changes follow closely on the end of the COVID-19 suspension of enrollment processes for Medicaid, which resulted in continuous enrollment for beneficiaries without a need to demonstrate continued qualification for coverage. The rules are not yet published officially, but that publication is expected by next week.
According to CMS, the changes proposed in these new rules are meant to work in conjunction with an earlier proposed rule that streamlined eligibility and enrollment procedures in order to improve access to services and supports through the Medicaid and CHIP program. They do so by creating new standards of timely access and specifying medical loss ratio (MLR) requirements, as well as adding additional avenues for beneficiary feedback and advisory committees to inform state Medicaid directors of best practices.
Below is a high-level summary of some of the more material changes that are proposed in these rules. We will address the rules in more details in later alerts and blog posts.
Medical Loss Ratios and Access to Managed Care
The first of the two proposed rules from CMS addresses access in the managed care context. The rule, Medicaid and Children’s Health Insurance Program (CHIP) Managed Care Access, Finance, and Quality (CMS-2439-P) is scheduled for publication in the Federal Register on May 3, 2023 and has a 60-day comment period, with comments due by July 3, 2023.
Of particular note are the changes that the rule makes to the MLR regulations applicable to Medicaid MCOs. The rule attempts to realign the Medicaid and CHIP MLR regulations with those in existence for Qualified Health Plans and Medicare Advantage organizations. The rule accomplishes this by making changes to (1) the provider incentive arrangement standards, (2) the quality improvement activity reporting, and (3) the expense allocation methodology reporting.
Additionally, the rule attempts to increase access to services within the managed care model by, among other items, establishing maximum wait time standards for routine primary care, establishing a process whereby states use a “secret shopper” method to validate MCO compliance with wait time standards, and conduct annual enrollee experience surveys that are backed by a remedy plan where feedback dictates action.
The rule also makes changes to the State Directed Payment process to help states use those programs to implement value-based arrangements and include non-network providers to drive quality care to Medicaid and CHIP beneficiaries. The rule includes requirements for the use of state directed payments and increased reporting requirements for states that use such a system.
Changes to Medical Care Advisory System
The second rule, Ensuring Access to Medicaid Services (CMS-2442-P), also has a May, 3, 2023 scheduled publication date and a July 3, 2023 comment date. This rule proposes to “take a comprehensive approach to improving access to care, quality and health outcomes, and better addressing health equity issues in the Medicaid program.”
The primary vehicle that the rule uses to accomplish this goal is a drastic change to the use of advisory committees in the Medicaid care process. The rule first changes the name of the committee to the Medicaid Advisory Committee and then sets forth in detail not only the membership requirements of the committee, but also on the scope of advice that the committee can provide—including policy and effective administration of the Medicaid program.
The rule also establishes a Beneficiary Advisory Group, which it sees as a vehicle for Medicaid beneficiaries, their families and related advocacy groups to provide feedback to the state on the effectiveness and coverage provided by the Medicaid program in that state.
Finally, for the fee-for-service programs, the rule proposes an interested parties advisory group to help the state with rate setting and other issues governing Home and Community Based Services within the state.
We will provide a more detailed analysis of each of the provisions, and their implications for providers and MCOs, of these rules in the coming weeks. If you have any questions or would like to comment on the regulations, please reach out to the health care lawyers at Reed Smith.