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Proposed Rule Deregulates Medicaid Managed Care, Fee-for-Service

CMS proposed new state flexibilities that would deregulate Medicaid managed care and Medicaid fee-for-service programs.

CMS proposed new state flexiblities for Medicaid managed care and fee-for-service programs.

Source: Thinkstock

By Thomas Beaton

- CMS has proposed a new rule that deregulates certain aspects of Medicaid managed care and Medicaid fee-for-service (FFS) programs in order to reduce regulatory burdens at the state level.

The rule would exempt managed care programs from certain reporting requirements and beneficiary access monitoring regulations if a state delivers 85 percent of its Medicaid coverage through managed care. CMS would assist states by providing beneficiary access guidelines for managed care programs.

Medicaid FFS programs that reduce payments up to a maximum of 4 percent, as well as a maximum of 6 percent over two consecutive years, would also be exempt from beneficiary access analyses. CMS would provide states with information about the relationship between payment rates and beneficiary access. This process would replace state efforts to predict that information internally.

“Today’s proposed rule builds on our commitment to strengthening the Medicaid program and assist those it serves through state partnerships that improve quality, enhance accessibility and achieve outcomes in the most cost-effective manner,” CMS Administrator Seema Verma said.

CMS said that the rule was a response to state concerns about administrative burdens associated with a final rule published in 2015.

States argued that reporting requirements set by the “Medicaid Program: Methods for Assuring Access to Covered Medicaid Services” final rule are not a proactive use of state resources when Medicaid FFS enrollment is limited.

“States with few Medicaid members enrolled in their fee-for-service program or when members are only temporarily enrolled, and states making small reductions to fee-for-service payment rates, have urged CMS to consider whether analyzing data and monitoring access in that program is a beneficial use of state resources,” CMS said in a press release.

The agency said the rule supports federal efforts to explore state Medicaid flexibilities. CMS and HHS penned a letter last year encouraging states to develop flexible solutions for Medicaid administration.

CMS estimates the proposed rule could reduce total state administrative burdens by 561 hours and save a total of $1.6 million.

“These new policies do not mean that we aren’t interested in beneficiary access but are intended to relieve unnecessary regulatory burden on states, avoid increasing administrative costs for taxpayers, and refocus time and resources on improving the health outcomes of Medicaid beneficiaries,” Verma said.


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