CMS finalizes sweeping Medicaid managed care rules
By Nona Tepper / April 22, 2024
Regulators enacted a pair of wide-reaching rules on Monday intended to increase transparency and improve the patient experience for the more than 80 million enrollees in Medicaid managed care plans.
The Centers for Medicare and Medicaid Services will require states and Medicaid insurers to annually report how carriers spend state-directed payments to providers, how their rates compare to Medicare, and survey managed care enrollees about their experience with insurance companies. CMS also mandated states create “one-stop-shop” websites that allow enrollees to compare the quality ratings of Medicaid managed care plans.
The new rules, the majority of which take effect in six months, come as states continue to adjust their Medicaid rolls after Congress lifted the continuous coverage provision that was part of the COVID-19 public health emergency.
Regulators also finalized proposals capping how much home care agencies can profit from state Medicaid payments. CMS will require at least 80% of state Medicaid payments to personal care, home health aide and other home- and community-based service organizations be spent on direct payments to workers, rather than kept by agencies as administrative overhead or profits. States must also publish the average hourly rate paid to those workers.
The agency also completed rules establishing national wait time standards for routine primary care appointments, such as obstetric services or outpatient mental health treatment, and will require states to conduct “secret shopper” surveys of insurers’ provider networks. State Medicaid directors in comments to regulators wrote that establishing national wait times failed to account for local provider shortages in certain areas.
In addition, CMS capped insurers' state-directed payments for inpatient and outpatient hospital, nursing facility and professional services at academic medical centers to the average commercial rate. Previously, there was no maximum for state-directed payments. The agency will require states to disclose how much Medicaid insurers spend on patients' medical costs, quality and administrative expenses and how much is kept as profit. This metric is known as the medical loss ratio. President Joe Biden's draft budget for fiscal 2025 likewise called on states to set Medicaid MLRs.
Regulators also codified guidance on how Medicaid agencies can pay for nonclinical care.
The Biden administration has pledged to increase oversight of Medicaid insurers as more states have privatized coverage. Forty-one states contract with insurance companies to manage care for their Medicaid enrollees. The CMS fact sheet for the final rule noted that oversight of carriers “has been limited by outdated regulations that need to be more comprehensive and consistent across delivery systems and coverage authorities.”