The Imminent Medicaid Mega-Reg is Gonna be “Epic”

May 20, 2015
|In Star Ratings, Compliance, Strategy, Health Insurance Exchanges, Brain Food, Medicaid, Risk Adjustment, Performance Optimization, Policy & Health Reform, Provider Relations, Sales & Marketing
|By GHG Advisors

For the last several weeks health policy nerds have been anxiously awaiting the release of the long-awaited Medicaid managed care proposed rule, the first from the Centers for Medicare and Medicaid Services (CMS) in 13 years. We’re coming to call it the “mega-reg” here.  Friday at the Congressional advisory MACPAC meeting, Commissioners were widely quoting  the term “epic” used by Jeff Myers, CEO of Medicaid Health Plans of America, in a recent National Journal article.

Medicaid has exploded since the last regulations in 2002, and enrollment is up 12 million just since January 2014. Current guidance doesn’t address long term care services and supports and managed long-term care, a major impetus for program reform at the state level.  The proposed rule has been in final HHS/Office of Management and Budget clearance for the last couple weeks, and its release is imminent.

MACPAC’s debates Friday focused on potential changes to Medicaid payment to managed care plans that might be included in the proposed rule, which the commission has been discussing for over a year:

  • Minimum Loss Ratio (MLR) — The MLR is a percentage which represents the revenue used for patient care compared to administrative expenses or profit. MLRs are allowed but not required in Medicaid managed care and currently 27 out of 39 states with Medicaid risk contracts use some MLR standard.   CMS could align Medicaid managed care policy with Medicare and commercial policy by requiring a specified MLR: a national standard such as the 85% used in Medicare Advantage program, or a requirement that states impose a MLR standard.  The proposed rule could also specify what costs should be included similar to the definitions adopted by NAIC and incorporated in federal rules.
  • Supplemental Payments and Actuarial Soundness — States may make supplemental payments to some providers up to the upper payment limit.  Current rules do not allow states to include these payments in MCO capitation rates or require MCOs to pass them through to providers.  The proposed rule could change actuarial soundness rules to let states preserve existing funding mechanisms which usually rely on waivers to level the playing field for managed care plans and their providers.
  • Mid-year Changes — There is no current process to allow MCOs to recertify their rates mid-year to account for federal policy changes such as high insurance fees or coverage or new expensive drugs and services.  CMS could require states to resubmit actuarial certifications to take significant mid-year changes into account, or allow states to prospectively certify a range of rates, or retrospectively reconcile payments when the actual cost impact is known.
  • Risk Mitigation — Current rules allow states to implement risk corridors, stop-loss or reinsurance.  CMS could require states to establish risk mitigation for new populations such as the childless adult expansion group, or for benefits where there is a significant risk or enhanced match.
  • Transparency — Medicaid health plans want transparency of state practices to develop capitation rates.  CMS could require states to share data and assumptions and allow plans to comment during federal review.
  • Baseline/Encounter Data — CMS could impose additional standards in addition to “appropriate data.”  CMS could impose additional requirements on the quality and timeliness of data and specify consistent definitions for encounter data to allow comparisons across states.
  • New Models of Care — CMS could encourage value based payment, payment reforms such as safety net ACOs of other shared savings models or other innovative MCO delivery and payment models.

Beyond payment issues in the mega-reg, the Commissioners discussed:

  • Long Term Care — CMS could include requirements for long term care services and supports covered by managed care plans which are not currently included in the 2002 regulations. The proposed rules could include beneficiary protections, provisions to ensure access to care and enrollee choice and control, and designation of an ombudsman to offer independent oversight.
  • Provider Networks — the mega-reg will very likely include requirements for adequate provider networks and directories similar to recent requirements for Medicare Advantage and Qualified Health plans.  Strengthened requirements for appeals and grievances may also be included.  The proposed rule may also include enhanced quality data and reporting.  It’s expected all these provisions would be designed to streamline expectations of Medicare Advantage, Medicaid, and ObamaCare.

We’ll have scads of analysis of the Medicaid proposed rule as soon as it hits the street.  It’s gonna be huge.

 

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Gorman Health Group is dedicated to assisting managed care organizations, as well as states with developing models of care, maximize member engagement. Visit out website to learn how we can help with you Medicaid needs >>

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