CMS proposes changes to Medicaid and CHIP managed care regulations

The Centers for Medicare & Medicaid Services today issued a proposed rule that would streamline Medicaid and Children’s Health Insurance Program managed care regulations. 

The agency said today’s rule, which proposes changes to its 2016 final rule that was a comprehensive rewrite of Medicaid and CHIP managed care regulations, seeks to further reduce federal regulatory barriers to help ensure that state Medicaid and CHIP agencies can design, develop, and implement Medicaid and CHIP managed care programs that best meet each state’s local needs and populations. Many of the policy changes were recommendations made by a CMS working group that included the National Association of Medicaid Directors and individual state Medicaid directors.
Specifically, today’s rule proposes to:

• Grant state Medicaid programs more flexibility in determining actuarially sound capitation rates for Medicaid managed care plans.
• Permit states moving to Medicaid managed care to transition their Medicaid provider supplemental payments over a three-year period.
• Grant states greater flexibility in directed payments to providers in managed care settings.
• Replace the current provider network adequacy time and distance standard with a requirement that states establish quantitative network adequacy standards. 
• Allow states to define adult and pediatric “specialists” for purposes of provider network adequacy standards.
• Develop minimum mandatory performance measures to apply to federal Quality Rating Systems and alternative QRS standards.
• Clarify that CMS will consult with states and other stakeholders in developing the federal QRS for Medicaid.
• Apply the proposed provider network adequacy standards to CHIP.  

CMS does not propose changes to the current medical loss ratio requirements for Medicaid managed care plans or changes to the 15 day limit on lengths of stay for managed care beneficiaries in an institution for mental disease. 

CMS will accept comments on the proposed rule through Jan. 14.