Medicaid and CHIP Managed Care Programs Strengthened by New Final Rule

On April 22, 2024, the Centers for Medicare & Medicaid Services (CMS) implemented a new regulation known as the Medicaid and Children’s Health Insurance Program (CHIP). The primary objective of this rule is to improve beneficiaries’ access to care, enhance the quality of care provided, and promote transparency throughout the process, making it a significant revision to the existing guidelines that govern Medicaid and CHIP managed care programs.

Key Provisions for Healthcare Providers:

Enhanced Access to Quality healthcare

  • Waiting Time: The implementation of this rule introduces fresh guidelines for appointment wait times. It is now mandatory for managed care plans to guarantee that patients can book appointments for routine primary care (adult and pediatric) as well as obstetrics/gynecology services within a maximum of 15 business days. Similarly, outpatient mental health and substance use disorder services must be scheduled within 10 business days for both adults and children. Furthermore, each state is required to establish an appointment wait time for an additional service category [1].
  • Shopper Surveys: In order to ensure compliance with wait time regulations and evaluate the accuracy of provider directories, states will need to conduct secret shopper surveys on an annual basis, employing independent entities for this purpose [1].
  • Enrollee Experience Survey: To ensure the accuracy of provider directories and assess compliance with wait times, states will now be mandated to employ independent entities for conducting annual secret shopper surveys. Additionally, in order to gather valuable feedback on access to care, states are required to conduct annual enrollee experience surveys for each managed care plan.

State Directed Payments (SDPs)

  • Increased Flexibility: The rule offers states more flexibility in using SDPs to implement value-based purchasing arrangements and include non-network providers [1].
  • Prior Approval Removed: Prior approval is no longer required for SDPs established as minimum fee schedules set at the Medicare payment rate [1].
  • Payment Limits: SDPs for specific services cannot exceed the average commercial rate. These services include inpatient and outpatient hospital services, nursing facility services, and professional services at an academic medical center [1].
  • Reporting Requirements: Stronger reporting requirements are implemented for SDPs, including provider-level reporting on actual expenditures and evaluation plans with triennial reports to CMS if costs exceed 1.5% of total capitation payments [1].

Medical Loss Ratio (MLR)

  • SDP Reporting: Managed care plans must now include actual expenditures and revenues for SDPs in their MLR reports submitted to states [1].
  • Technical Revisions: Technical revisions have been made to align MLR reporting with recent Marketplace plan regulations .
  • Overpayment Reporting: Managed care plans are required to report any identified or recovered overpayments to states within 30 days [1] .

In Lieu of Services and Settings (ILOSs)

  • Expanded Use: The rule expands the permissible use of ILOSs as substitutes for covered services or settings under the state plan, with a focus on addressing health-related social needs (HRSNs) like housing and nutritional supports [1].

Quality Rating System (QRS)

The establishment of a Quality Rating System (QRS) for Medicaid and CHIP managed care plans is outlined in the final rule. This system will implement mandatory performance measures that will be incorporated into public rating systems, providing beneficiaries with the necessary information to make well-informed decisions when selecting a plan [1].

Overall Impact

The anticipated outcome of these modifications is a boost in the availability of healthcare for Medicaid and CHIP recipients through the reduction of wait times and the maintenance of up-to-date provider directories. Furthermore, the heightened emphasis on value-based purchasing and quality measures strives to elevate the overall standard of care administered within managed care programs.

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