CMS Will Only Adjust Medicaid Rules – Not Drastically Change Them

Posted in RCM Solutions, Revenue Cycle Solutions

After much ballyhoo and for years of promising a major overhaul to the cost-prohibitive Obama-era managed care rules, the CMS has issued a proposed regulation that makes smaller changes – not the drastic “gutting” that had been promised — to the standards states meet when running their Medicaid plans.

The proposed rule issued Thursday would give states some new flexibility in setting rates for their managed care plans and ensuring insurance companies have adequate provider networks. There still no oversight on how private insurance companies managing these state plans use the money for patient care and the profits they can reap.

The agency estimates that the changes it’s proposing would cut states’ administrative costs by $27 million, or 120,000 hours less in clerical tasks.

The new proposed rule doesn’t affect the key linchpin of the Obama-era rulemaking, which set a federal medical-loss ratio (MLR) of 85%. That means all insurers must spend at least 85% of their Medicaid revenue on medical care and other activities that improve quality.

The Trump-era CMS has said it supports the 85% MLR provision because it believes it will help control spending in the program.

The new rule focuses on states’ secondary concerns. For instance, the Obama rulemaking required states to develop and enforce minimum travel time and distance standards for providers. Medicaid directors have complained this policy wouldn’t improve network adequacy, noting that there’s no guarantee a provider or specialist practices within certain distance of a patient.

The proposed rule would allow states to use quantitative standards to judge plans’ networks. That could include data such as how long it takes for a patient to get an appointment or provider-to-patient ratios.

CMS has said they believe that this change would enable states to choose from a variety of quantitative network adequacy standards that meet the needs of their respective Medicaid programs in more meaningful and effective ways.

It seems to me the more things change the more they stay the same.

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