Federal officials are preparing the first major regulatory update to Medicaid managed care in a decade, promising to challenge insurers but also fix long-standing issues and offer routes to business standardization.
At a recent gathering of the Medicaid Health Plans of America trade group, leaders from the Centers for Medicare & Medicaid Services said the agency will soon be releasing new Medicaid managed care organization regulations -- for the first time since 2002.
Over the past 12 years, states' use of Medicaid managed care has ebbed, flowed and evolved, and now 36 states use some form of managed care. As enrollment in Medicaid surges to records highs, managed care organizations are covering about 75 percent of the 67 million and growing beneficiaries (not counting youth in CHIP).
Considering those trends, it seems CMS leaders have concluded that it's time to raise the bar and ensure a national baseline for state regulators, Medicaid plans, providers and beneficiaries.
By and large, the regulations will cover three main areas: Medicaid managed care alignment with Medicare Advantage and public exchange programs, payment and accountability, and network adequacy.
The regulations are sure to pose some challenges for insurers working in Medicaid managed care, but will also offer a number of benefits in helping the industry evolve, according to Aaron Eaton, strategy and development officer at the Gorman Health Group consultancy.
Aligning Medicaid managed care with other health programs could address the problem of churn in low income populations experiencing fluctuating eligibility between Medicaid and exchange subsidies, and it could also improve the transition to Medicare for soon-to-be seniors in Medicaid.
"Regardless of how you think it should be done, the rationale to better align all of these programs makes good sense for both beneficiaries and the managed care plans that serve them," argued Eaton, who worked in Medicare Part D finance and operations at CMS in the mid-2000s. "Beneficiaries can have common experiences, families with multiple program enrollments have an easier time navigating the system, and plans reduce unnecessary administrative burden to administer multiple programs."
In terms of improving payment and accountability, Eaton's sense is that CMS leaders want to use data-driven approaches to rate setting and benefits integration, as a way of keeping policy in pace with technology and modern business practices.
Network adequacy, however, could be the most contested issue in updating Medicaid managed care, given the variation among states and MCOs, the debate over patient choice and value, and the provider access concerns that have emerged over narrow and tiered network exchange plans.
"We can expect CMS to take a strong stance on access to care issues including network composition, availability of primary care and specialists, and provider directory issues," Eaton wrote in recent post. "As a major beneficiary protection issue, we also expect this area to draw a lot of comments from the beneficiary community."