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CMS proposes changes to streamline managed Medicaid

Proposed changes include rate range flexibility and adding new delivery models such as telehealth.

Susan Morse, Senior Editor

The Centers for Medicare and Medicaid Services has proposed  regulatory revisions to Medicaid managed care to streamline the program, relieve regulatory burden, support state flexibility and promote transparency, flexibility, and innovation.

The proposed changes address stakeholder concerns from a 2016 final rule. CMS is accepting comment for 60 days.

One issue the agency is not modifying in the rule is a limitation of 15 days length of stay for managed care beneficiaries in an institution for mental health treatment. States said this created administrative challenges.

Instead, the agency is asking states to submit data that could support revisions to this policy.

The key proposed revisions to the 2016 final rule include giving states: greater flexibility on a rate range; a three-year transition period to come into compliance with requirements related to pass-through payments; more flexibility to set meaningful network adequacy standards that take into account new service delivery models such as telehealth; removing outdated administrative requirements; and enabling the use of modern electronic communication.

The rule requires CMS to move more quickly through the federal rate review process and to allow for less documentation.

It maintains the requirement for states to develop a quality rating system for health plans, but gives a greater ability to tailor alternatives.

The rule ensures that differences in reimbursement rates are not linked to enhanced federal match.


Managed care, in which states contract with private health plans to administer Medicaid benefits, is replacing the traditional fee-for-service Medicaid.


In 2016, over two thirds, or 68.1 percent of all Medicaid beneficiaries were enrolled in comprehensive managed care, up from 65.5 percent in 2015. Enrollment reached 54.6 million beneficiaries in 2016.


CMS said it continues to support state flexibility, having approved a total of 15 waivers for states to treat patients with substance use disorder and to expand access to treatment.


"Today's action fulfills one of my earliest commitments to reset and restore the federal-state relationship, while at the same time modernizing the program to deliver better outcomes for the people we serve," said CMS Administrator Seema Verma.

"Targeted improvements to the managed care rule have been a top priority for Medicaid Directors," said Mohr Peterson, board president of the National Association of Medicaid Directors. "NAMD appreciates the partnership shown by CMS to explore these issues and dialogue with the states, providing an opportunity to share perspectives on how the managed care regulatory framework could be improved."

Twitter: @SusanJMorse
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