Centers for Medicare & Medicaid Services (CMS) releases two major proposed rules for Medicaid Managed Care and Medicaid Access, including Home- and Community-Based Services (HCBS) and Children’s Health Insurance Program (CHIP).
Mercer colleagues are working to understand the full impacts to better advise our internal teams and clients. We will continue to review and share additional information with you. Our intention is to also provide educational sessions for clients in the coming months.
An initial summary of the key proposed provisions is provided below.
On May 3, 2023, CMS published two significant notices of proposed rules (NPRMs) describing new requirements targeted to enhance access to care in Medicaid managed care as well as fee-for-service (FFS):
Both NPRMs impact managed care, but the majority of the provisions impacting managed care are in the Managed Care NPRM. These NPRMs will have a tremendous impact on State Medicaid programs, if adopted.
CMS has published other final rules since 2016 making changes and clarifications on the Medicaid managed care regulations and FFS access monitoring requirements. However, these NPRMs mark the first time since the 2016 Medicaid Managed Care Final Rule and the 2015 Medicaid Fee-For-Service Access Rule where CMS has proposed sweeping changes to State Medicaid Agency and Medicaid managed care plan operations, oversight, and compliance standards.
In response to CMS’s 2022 Request for Information on Medicaid Access, CMS has proposed a set of managed care and FFS access standards, including new standards for HCBS programs. These standards are intended to align CMS’s access strategy across delivery systems.
CMS is overhauling its requirements for access in FFS by rescinding the rules for Access Monitoring Review Plans (AMRPs) and replacing them with new standards. CMS is proposing that States must:
Regardless of delivery system or authority (except for PACE), CMS has proposed the following for HCBS services:
CMS finalized the requirement for a Quality Rating System in the 2016 Final Rule but did not establish the framework required for implementation. This NPRM picks up where the 2016 rule left off and proposes this framework.
CMS is proposing to replace the current Medical Care Advisory Committee (MCAC) requirements and replace the MCAC with a newly named Medicaid Advisory Committee (MAC) and a new Beneficiary Advisory Group (BAG). The membership of this group must crossover with the proposed MAC. The goal is that MAC, and its corresponding BAG, would advise the state not only on issues related to health and medical services, as the MCAC did, but also on matters related to policy development and to the effective administration of the Medicaid program.
In addition to the access issues addressed above, CMS proposed vast changes to Medicaid and CHIP managed care operations and quality. We will focus on the standalone CHIP provisions at a later date. Summaries of the various changes are below.
As CMS explains in the proposed rules, SDPs grew in number and cost since they were first proposed in 2016. In 2022, CMS received almost 300 SDP pre-prints to review. In these rules, CMS is proposing a host of changes to SDP requirements and processing. The NPRM would:
The rules would:
Earlier this year, CMS released State Medicaid Director Letter (SMDL) 23-001 describing new, detailed requirements for ILOS. States with existing ILOS were required to comply with the new guidance, including a 5% cap on ILOS expenditures, by the contract rating period beginning on or after January 1, 2024. States adding new ILOS were required to comply with the new guidance immediately. The NPRM proposes to codify the guidance in this letter, and Mercer does not repeat that guidance here. However, the NPRM proposes an effective date of the first rating period beginning on or after 60 days following the effective date of the final rule.
The proposed rules have a 60-day comment period, closing on July 3, 2023. It may take a year before CMS finalizes these rules, but we expect final rules to be released by mid-year 2024. While many provisions will be effective immediately, some requirements will be phased in over several years.
In addition to proposing a new optional external quality review (EQR) activity to assist in the evaluation SDPs and ILOS, CMS proposes to:
CMS is hosting a series of webinars and stakeholder meetings on the NPRMs. Our NPRM team will be attending these and will share notes and our insights with you.
Summary of CMS’s Access-Related Notices of Proposed Rulemaking:
Summary of Medicaid and CHIP Payment-Related Provisions:
Summary of Key Home and Community-Based Services (HCBS) Provisions:
Summary of the Medical Care Advisory Committee and Beneficiary Advisory Group Provisions:
For a fact sheet about the Medicaid or Children’s Health Insurance Program (CHIP) Managed Care Access, Finance, and Quality NPRM, please see:
Mercer is not engaged in the practice of law, or in providing advice on taxation matters. This report, which may include commentary on legal or taxation issues or regulations, does not constitute and is not a substitute for legal or taxation advice. Mercer recommends that readers secure the advice of competent legal and taxation counsel with respect to any legal or taxation matters related to this document or otherwise.
Please contact your Mercer consultant to discuss the impact of this change for your specific state programs. You may also email us at firstname.lastname@example.org.
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