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Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. ebglaw.com
Medicaid Managed Care Final Rule
Modernizes and More Closely Aligns Medicaid
Managed Care with Medicare Advantage and
Exchange Requirements
May 19, 2016
Lynn Shapiro Snyder
Helaine I. Fingold
Š 2015 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
Presented by
Helaine Fingold
Senior Counsel
hfingold@ebglaw.com
Phone: 443.663.1354
Lynn Shapiro Snyder
Senior Member of the Firm
lsnyder@ebglaw.com
Phone: 202.861.1806
Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
Agenda
3
I. Background on Medicaid Managed Care
II. Major Provisions of the Proposed Rule
a. Introduction
b. Network Adequacy
c. Medical Loss Ratio
d. Actuarially Sound Capitation Rates
e. Quality of Care Standards
f. Appeals and Grievances
g. State Monitoring Standards
h. Information Standards
i. Managed Long-Term Services and Supports
j. Beneficiary Enrollment Protections
III. Key Takeaways
Š 2015 Epstein Becker & Green, P.C. | All Rights Reserved. ebglaw.com
I. Background on Medicaid
Managed Care
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 Medicaid is largest U.S. payer (by headcount)
• Covers 72 million Americans
• $492 billion
• Core financing source for safety-net hospitals and health centers that serve low-
income communities, plus long-term care facilities
 39 states contract with comprehensive Managed Care Organizations (MCOs)
for Medicaid
• More than 70 percent (46 million) of all Medicaid beneficiaries get at least some
care through these entities
 CMS last issued comprehensive Medicaid managed care regulations in 2002
Rule also governs managed care under Children’s Health Insurance Program (CHIP)
SOURCES: The Henry J. Kaiser Family Foundation, Medicaid Moving Forward (Mar. 9, 2015), available at http://kff.org/health-reform/issue-
brief/medicaid-moving-forward/. See also The Henry J. Kaiser Family Foundation, State Health Facts, Total Monthly Medicaid and CHIP Enrollment
(Feb. 2016), available at http://kff.org/health-reform/state-indicator/total-monthly-medicaid-and-chip-enrollment/; The Henry J. Kaiser Family
Foundation, Key Findings on Medicaid Managed Care: Highlights from the Medicaid Managed Care Market Tracker, (Dec. 2, 2014)
http://kff.org/medicaid/report/key-findings-on-medicaid-managed-care-highlights-from-the-medicaid-managed-care-market-tracker/
I. Background on Medicaid Managed Care
OVERVIEW
5
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I. Background on Medicaid Managed Care
MEDICAID ENROLLMENT TRENDS
1975 1985 1995 2005 2010 2014 2015
Total
Enrollment
22 22 33 45 55 66 72
Medicaid
Managed
Care
No data 1 10 29 40 44 46
Traditional
Medicaid
22 22 24 17 16 No data No data
Medicaid
Expansion
None None 1 0* 1 5 7
1975 1985 1995 20102005 2014 2015
Health Insurance
Exchanges and
insurance subsidies
available
Affordable
Care Act
enacted
In Millions
Source: Centers for Medicare & Medicaid 2013 Statistical Supplement, Table 13.4; AIS Medicare and Medicaid Market Data, 2015; Kaiser Family Foundation, Total Monthly Medicaid and CHIP Enrollment for May 2014
and May 2015; CMS, Medicaid Managed Care Penetration Rates as of December 31, 2010; CMS National Summary Of Medicaid Managed Care Programs And Enrollment as of July 1, 2010; CMS, Total Medicaid
Enrollees - VIII Group Break Out Report, March 2015, Reported on the CMS-64. Coverage Gains Under Recent Section 1115 Waivers: A Data Update, S. Artiga and C. Mann, Kaiser Family Foundation, August 2005.
*Enrollment was above zero but under 500,000, thus was rounded down.
Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com 7
I. Background on Medicaid Managed Care
DEVELOPMENT TIMELINE
1973 19761962 19811965 1982 1994 1997 2010 20162002
Section 1115 added to Social
Security Act to allow for
waiver of program
requirements for pilot or
experimental projects
Medicaid Program
enacted
HMO Amendments adds 50/50
rule for Medicaid risk plans
OBRA added 1915(b) freedom
of choice waivers and replaced
50/50 with 75/25 rule
Arizona granted the first
statewide Medicaid
managed care waiver
under Section 1115
Oregon statewide Medicaid
managed care waiver approved,
allowed for service prioritization
Balanced Budget Act allows for
mandatory managed care without
waiver and eliminates 75/25 rule
CMS releases first
comprehensive
changes to
the Medicaid managed care
rules in 14 years
ACA extends Medicaid drug
rebate program to managed
care, allows for expansion up
to 138% of Poverty
CMS releases changes to the
Medicaid managed care rules
Health Maintenance
Organization Act
Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com
I. Background on Medicaid Managed Care
MOST STATES USE MEDICAID MANAGED CARE PLANS
8
• WY
• WI
•WV
•WA
•VA
•VT
• UT
• TX
• TN
• SD
• SC
•RI
• PA
•
OR
• OK
• OH
• ND
•NC
• NY
• NM
•NJ
•
NH
•NV
• NE
•MT
•MO
• MS
•
MN
• MI
•MA
•MD
•
ME
• LA
• KY• KS
• IA
• IN• IL
•ID
•HI
• GA
• FL
• DC
•DE
• CT
•
CO•
CA
• AR•
AZ
•
AK
• AL
•PCCM only (may include ACO)
•MCO only
•No Comprehensive MMC
•MCO and Primary Care Case Management
Source: Adapted from data from the Kaiser Family Foundation, Medicaid Reforms to Expand Coverage, Control Costs
and Improve Care: Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2015 and 2016, October 15, 2015.
Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved.
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II.a. Major Provisions of the
Final Rule –
Introduction
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 Modernize managed care in Medicaid and CHIP to
• Reflect changes in managed care delivery systems
• Facilitate and support delivery system reform initiatives to improve outcomes and
manage costs
• Strengthen the quality of care provided to Medicaid beneficiaries and
• Promote more effective use of data in overseeing managed care programs
 Revise MMC and CHIP rules to better align with Medicare Advantage (“MA”)
and qualified health plans (“QHPs”) sold through ACA marketplaces
 Improve experience for persons who move between coverage options due to
changes in circumstances
 Reduce administrative burden on regulators and issuers operating in multiple
markets
 Encourages issuers in MA and ACA marketplaces to enter the Medicaid
market this rule modernizes the Medicaid managed care regulatory
II.a. Major Provisions of the Final Rule – Introduction
AIM OF FINAL RULE
10
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 Applies to all Medicaid Managed Care (“MMC”) entities, including
• Managed Care Organizations (“MCOs”)
• Prepaid Inpatient Health Plans (“PIHPs”)
• Prepaid Ambulatory Health Plans (“PAHPs”)
• Managed Long-Term Services and Supports (“MLTSS”) programs
 New types of entity -- “PCCM [Primary Care Case Management] Entities”
• Reflects entities conducting “enhanced” PCCM services, paid more robust capitation
• CMS would hold PCCM Entities to the same standards as other MMC entities
 Does not apply to ACOs or Primary Care Medical Homes
II.a. Major Provisions of the Final Rule – Introduction
WHAT KINDS OF ENTITIES ARE AFFECTED?
11
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II.b. Major Provisions of the
Final Rule – Network
Adequacy
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 States must set time and distance standards for providers of:
Exceptions allowed if monitored by the state
 Other factors states must consider
 Expected Medicaid enrollment and utilization of services
 Characteristics and health needs of the covered population
 Number and types of health care professionals required to provide covered services
 Number of network providers that are not accepting new Medicaid patients
 Geographic location and accessibility of both providers and enrollees
 Ability of providers to ensure accessibility and required equipment for the disabled
 Reasonable accommodations
 Providers’ ability to communicate in a “culturally competent” manner
 Availability of technological solutions
 States may apply additional factors which need not be the same or applied uniformly across a
state or across provider types
II.b. Major Provisions of the Final Rule
NETWORK ADEQUACY
13
• Pharmacy
• Primary care (adult and pediatric)
• OB/GYN
• Mental health/Substance use disorder
(adult and pediatric)
• Pediatric dental
• Specialists (adult and pediatric) (can be further
defined by states)
• Hospital
• Other providers if applying such standards
“promotes the objectives of the Medicaid
program”
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 States are also advised to look to
• The state’s network adequacy standards for commercial insurance
• MA plan network adequacy standards
• Historical patterns of Medicaid utilization
 Timeliness would be assessed as routine, urgent, or emergency care
 Publish network adequacy standards for transparency
 MMC entity required to document network adequacy for state review at least yearly
… and when a significant change to operations would affect capacity and services
 External Quality Review Organization must validate plans’ network adequacy for the
previous 12 months
 MLTSS must have distinct network adequacy standards
• Based on the same factors as for medical services
• May vary, based on whether the enrollee or provider must travel to provide services
• Should consider strategies “to ensure the health and welfare of enrollees using LTSS and to
support community integration of individuals receiving LTSS”
II.b. Major Provisions of the Final Rule
NETWORK ADEQUACY
14
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II.c. Major Provisions of
the Final Rule –
Medical Loss Ratio
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 States must develop capitation rates so that managed care plans can be
expected to reasonably achieve at least an 85 percent MLR
• States may choose higher minimum
 Standards for calculating the MLR are consistent with those for MA and the
private market with some variation due to unique characteristics of the
Medicaid and CHIP
 Calculates the MLR over a 12-month period
 States may collect remittances if MMC entity has MLR <85 percent (with
FMAP percentage returned to the federal government)
 CMS acknowledges its lack of enforcement authority over Medicaid MLR
• However, CMS will use its authority over approval of capitation rates to ensure
that rates are adequate to enable plans to show an expected MLR of 85 percent or
higher
II.c. Major Provisions of the Final Rule
MEDICAL LOSS RATIO
16
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 Incurred claims consist of all claims costs for covered state plan services,
including, for example
• Incentive and bonus payments paid and expected to be paid to providers
• Anticipated coordination of benefits recoveries
 Amounts which must be deducted from incurred claims include, for example
• Prescription drug rebates
• Overpayment recoveries
• Amounts paid, including to a provider, for professional or administrative services
that do not represent compensation or reimbursement for State plan services
II.c. Major Provisions of the Final Rule
MEDICAL LOSS RATIO
17
Medicaid MLR
Incurred claims + Quality Improvement
Expenditures
Premium Revenue - Federal & State
Taxes, Licensing & Regulatory Fees
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 Quality improvement activities include those related to service coordination,
case management and activities supporting state goals for community
integration
 Detail not stated in regulation leaving it to individual states to determine
which activities qualify as quality improvement
 Pass-through payments as directed by the state that are not tied to
utilization or quality are not included in either the numerator or the
denominator, for example
• Graduate medical education payments or supplemental payments for
uncompensated care
II.c. Major Provisions of the Final Rule
MEDICAL LOSS RATIO
18
Medicaid MLR
Incurred claims + Quality Improvement
Expenditures
Premium Revenue - Federal & State
Taxes, Licensing & Regulatory Fees
Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved.
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II.d. Major Provisions of
the Final Rule –
Setting Actuarially
Sound Capitation
Rates
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 Aims to ensure that MCO, PIHP, and PAHP Medicaid rates are developed in a
transparent and consistent manner across MMC programs
 Incorporates principles of actuarial soundness:
• Rates should be sufficient and appropriate for the anticipated service utilization of the
populations and services covered and compensate plans for reasonable non-benefit costs
• Capitation rates should promote program goals, such as quality of care, improved health,
community integration of enrollees, and cost containment
• Actuarial rate certification should give sufficient detail, documentation, and transparency of
rate-setting components
• Transparent and uniformly applied rate review and approval process based on actuarial
practices should ensure that both the state and CMS act effectively as fiscal stewards and in
the interests of beneficiary access to care
 Sets forth the types of data to be used for rate setting and the level of
documentation/ detail so CMS can more effectively review and approve rates
II.d. Major Provisions of the Final Rule
SETTING ACTUARIALLY SOUND CAPITATION RATES
20
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 States need to certify each individual rate per rate cell as actuarially sound
• “Rate cell” is a set of mutually exclusive categories of enrollees defined by one or more
characteristics for the purpose of determining the capitation rate,
o May include age, gender, eligibility category, and region or geographic area
• May no longer use capitation rate ranges
 States are given flexibility to increase or decrease the certified capitation rate by one
and a half percent without the need to submit a revised rate certification for CMS’
review and approval
 State may use risk sharing arrangements, incentive arrangements, and withholds
arrangements to reward MCOs, PIHPs, and PAHPs for meeting performance targets
specified in the contract
• Contracts would need to include a description of any risk sharing mechanisms and those
mechanisms must be computed on an actuarially sound basis
II.d. Major Provisions of the Final Rule
SETTING ACTUARIALLY SOUND CAPITATION RATES
21
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II.e. Major Provisions of
the Final Rule –
Quality of Care
Provisions
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 Quality provisions of Final Rule seek to enhance transparency, align quality
measurements with other systems of care where possible, and strive to improve
consumer and stakeholder engagement
 Proposed changes center on
• Quality Performance review and approval process
• Development of a quality rating system
• Expansion of the comprehensive quality strategy to encompass FFS and MMC
• Data and information disclosure to increase accountability
• Standards for performance measures and topics for performance improvement projects
• Revisions to the external quality review system
II.e. Major Provisions of the Final Rule
QUALITY OF CARE STANDARDS
23
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Quality Performance Review and Approval Process (“QPRAP”)
 States must
• Require through contract that each MCO, PIHP, PAHP, and certain PCCM entities establish
and implement an ongoing comprehensive quality assessment program for the services it
provides to enrollees
• Review at least annually the impact and effectiveness of the QPRAP of each entity
 QPRAPs must include
• Performance Improvement Projects (“PIPs”)
• Collection and submission of performance measurement data
• Mechanisms to detect both underutilization and overutilization of services
• Mechanisms to assess the quality and appropriateness of care furnished to enrollees with
special health care needs, including those in MLTSS
 Information from annual reviews must be publicly available on the state’s website
II.e. Major Provisions of the Final Rule
QUALITY OF CARE STANDARDS
24
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Quality Rating System (“QRS”)
 State may use CMS-defined QRS or develop its own subject to CMS approval
 Based on (but not identical to) summary indicators used in Exchange QRS
• Clinical quality management
• Member experience
• Plan efficiency, affordability and management
 Refined by robust public process, including notice and comment, over 3-5 years
 Methodology reassessed every 2-3 years to accommodate changes
 Did NOT finalize proposal to allow states to rely on the MA 5-star ratings for dual
eligible plans
 States must post ratings online to help beneficiaries to make informed decisions
II.e. Major Provisions of the Final Rule
QUALITY OF CARE STANDARDS
25
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External Quality Review
 The Secretary will develop protocols for External Quality Review (“EQR”)
 State must contract with EQR Organization (“EQRO”)
 EQR activities include
• Validation of network adequacy for prior 12 months, different from assessing availability of
services (required)
• Validation of compliance with MCO, PIHP and PAHP standards for previous 3-year period
(required)
• PIP validation
• Validation of encounter data (optional)
• Administration of consumer or provider surveys on quality of care (optional)
 State may rely on results of Medicare review or private accreditation survey instead
of requiring EQR performance of required EQR activities
II.e. Major Provisions of the Final Rule
QUALITY OF CARE STANDARDS
26
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II.f. Major Provisions of
the Final Rule –
Appeals and
Grievances
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 Aligns Medicaid/CHIP appeals and grievance processes with those for MA and QHPs
• Current differences hinder creation of a streamlined process across the public and private
managed care sectors, creating unnecessary administrative complexity for those participating
across product lines
 Appeals and grievances requirements are extended to PAHPs
 MMC plans must offer one level of internal appeal after which beneficiaries may
request a state fair hearing, similar to rules for individual QHP products and MA
 Plan failure to meet timeframes deems enrollee as meeting exhaustion requirements
 Providers would be allowed to appeal on behalf of beneficiaries with written consent
from enrollees (changed from proposed rule which said without consent)
 Timing for resolution of appeals would be reduced
• For standard appeal determinations to 30 days from 45
• For expedited appeal determinations to 72 hours from 3 working days
II.f. Major Provisions of the Final Rule
APPEALS & GRIEVANCES
28
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 Procedural protections for appeals are strengthened
• Clarifies information that must be considered in an appeal and that which must be made
available to beneficiaries
• Requires implementation of reversal of adverse benefit determination within 72 hours
 Timeframe for enrollees to request a state fair hearing extended from a maximum of
90 days to 120 calendar days
 Continuation of benefits while appeal is pending
• MMC plans would no longer be able to stop any services pending determination of appeals
• States may allow recoupment from enrollee if adverse determination upheld so long as the
same standard is applied to both FFS and managed Medicaid
II.f. Major Provisions of the Final Rule
APPEALS & GRIEVANCES
29
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II.g. Major Provisions of the
Final Rule – State
Monitoring Standards
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 States must
• Implement a monitoring/oversight system to address, at a minimum:
• Submit annual program assessment to CMS and post the assessment publicly
• Use data collected from its monitoring activities to improve the performance of its managed
care program
• Conduct readiness assessments of each MCO, PIHP, PAHP and PCCM entity as follows:
o Prior to start of a new managed care program, when a new contractor enters an existing
program or when the state adds new benefits, populations, or geographic areas to the
scope of its contracted managed care plans
• Readiness review would, at baseline, assess: plan operations and administration, service
delivery, financial management and systems management
II.g. Major Provisions of the Final Rule
STATE MONITORING STANDARDS
31
• Administration and management
• Appeal and grievance systems
• Claims management
• Enrollee materials and customer services
• Finance, including MLR reporting
• Information systems, including encounter data
reporting
• Marketing
• Medical management, including utilization
management
• Program integrity
• Provider network management
• Quality improvement
• Delivery of LTSS
Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved.
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II.h. Major Provisions of
the Final Rule –
Information
Requirements
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 Changes made to strengthen MMC beneficiary information dissemination rules, more
closely align with MA and commercial, better reflect technology advances, recognize
cultural/linguistic diversity of Medicaid beneficiaries
 Apply consistently across MMC plans, including MCOs, PIHPs, PAHPs, PCCM and
PCCM entities, with respect to enrollee materials
 States and MMC entities must make materials available in prevalent languages
 To include taglines on availability of written materials in those languages and oral
interpretation in understanding the materials
 MMC entities must also make available vital documents in each prevalent non-
English language in the MMC’s service area, to include
• Provider directories
• Member handbooks
• Formulary
• Other notices critical to obtaining services
 MMC entities also must post provider directories on their websites in a CMS-
specified machine-readable file and format
II.h. Major Provisions of the Final Rule
INFORMATION REQUIREMENTS
33
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II.i. Major Provisions of
the Final Rule –
Managed Long-Term
Services & Supports
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 In 2004, eight states (AZ, FL, MA, MI, MN, NY, TX, and WI) had implemented MLTSS
programs. By January 2014, 12 additional states had implemented MLTSS programs
(CA, DE, IL, KS, NC, NM, OH, PA, RI, TN, VA, WA)
 New requirements on MLTSS when provided through MCOs, PIHPs and PAHPs
• Enrollment and benefits complaint mechanism
• Education
• Assistance with grievances, appeals, and fair hearings, and
• Review of program data to identify and resolve systemic issues
 Regulation provides new requirements on MLTSS in support of the 10 key principles
for MLTSS set out in 2013 guidance
II.i. Major Provisions of the Final Rule
MANAGED LONG-TERM SERVICES AND SUPPORTS
35
• Adequate program planning
• Stakeholder engagement
• Enhanced home and community-based services
• Payment alignment
• Beneficiary support and protections
• Person-centered process
• Comprehensive, integrated service package
• Qualified providers
• Participant protections
• Quality
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II.j. Major Provisions of
the Final Rule –
Beneficiary Enrollment
Provisions
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 States may passively enroll beneficiaries effective upon eligibility determination,
subject to the enrollees’ right to opt-out or elect a different managed care plan
 CMS declined to finalize 14-day choice period to affirmatively choose a plan or opt
for FFS
 For passive or default enrollment
• States must seek to “preserve provider-beneficiary relationships and relationships with
providers that have traditionally served Medicaid”
• If not possible, states must equitably distribute beneficiaries among available plans and may
not arbitrarily exclude any plans
• Additional assignment criteria are permitted, to reflect
o Beneficiary location and preferences
o Previous plan assignment
o Access needs for disabled beneficiaries
o Quality and procurement considerations
II.j. Major Provisions of the Final Rule – Other
BENEFICIARY ENROLLMENT PROVISIONS
37
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III. Key Takeaways
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 CMS goal: harmonization across MMC, MA, QHPs
i. Administrative simplification
ii. Continuity for beneficiaries as they move between markets
 Provider impact: Generally positive
i. Floor on MMC medical spend thanks to minimum MLR, actuarial soundness
ii. More emphasis/value on health care quality
iii.Consistency across Medicaid, Medicare, commercial managed care
 Impact on health plans: Neutral to positive
i. Actuarial soundness promotes adequate capitation rates
ii. State-to-state consistency lessens burden on multi-state issuers
 Impact on states: Variable
i. Potentially heavy transition burden on states w/ most developed MMC
III. Key Takeaways
39
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Questions?
40
Helaine Fingold
Senior Counsel, Epstein Becker & Green
hfingold@ebglaw.com
Phone: 443.663.1354
Lynn Shapiro Snyder
Senior Member of the Firm, Epstein Becker &
Green
lsnyder@ebglaw.com
Phone: 202.861.1806
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ebglaw.com
IV. Appendix
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 Section 1915(a) of the Social Security Act (the SSA)
• Allows states to implement a voluntary managed care program
 State plan amendment (SPA) under section 1932 of the SSA
• Allows states to implement mandatory managed care program
• Does not allow for inclusion of dual eligibles, American Indians/Alaska Natives, or
children with special health care needs
 Section 1915(b) of the SSA (waiver authority)
• Allows states to pursue a waiver to implement mandatory managed care,
including for those excepted under a SPA
 Section 1115(a) of the SSA (waiver authority)
• Allows states to pursue waiver to implement mandatory managed care for all
beneficiaries as part of a demonstration project
• State may request approval to provide services not typically covered by Medicaid
IV. Appendix
FEDERAL AUTHORITIES FOR MEDICAID MANAGED CARE DELIVERY
42
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 Statewideness (section 1902(a)(1) of the SSA)
• Waiver allows states to implement managed care in specific areas of the State
(generally counties/parishes) rather than the entire state
 Comparability of Services (section 1902(a)(10) of the SSA)
• Waiver allows states to provide different benefits to beneficiaries enrolled in a
managed care delivery system as compared to those in fee-for-service Medicaid
 Freedom of Choice (section 1902(a)(23)(A) of the SSA)
• Waiver allows states to require beneficiaries to receive their Medicaid services
only from a managed care plan or primary care provider
 Allows for payment of costs not otherwise eligible under section 1903 of the
SSA (Section 1115 only)
IV. Appendix
PROVISIONS ELIGIBLE FOR WAIVER UNDER SSA 1915(b) & 1115
43
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IV. Appendix
PERCENTAGE OF MEDICAID POPULATION IN MCOS
WY
WI
WV
WA
VA
VT
UT
TX
TN
SD
SC
RI
PA
OR
OK
OH
ND
NC
NY
NM
NJ
NH
NV
NE
MT
MO
MS
MN
MI
MA
MD
ME
LA
KYKS
IA
INIL
ID
HI
GA
FL
DC
DE
CT
CO
CA
AR
AZ
AK
AL
51% - 53%
78% - 100%
9% - 21%
63% - 77%
Source: Adapted from data from the Kaiser Family Foundation, Medicaid Reforms to Expand Coverage, Control Costs
and Improve Care: Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2015 and 2016, October 15, 2015.
N/A
Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com 45
IV. Appendix
PERCENTAGE OF MEDICAID POPULATION IN PCCMS
WY
WI
WV
WA
VA
VT
UT
TX
TN
SD
SC
RI
PA
OR
OK
OH
ND
NC
NY
NM
NJ
NH
NV
NE
MT
MO
MS
MN
MI
MA
MD
ME
LA
KYKS
IA
INIL
ID
HI
GA
FL
DC
DE
CT
CO
CA
AR
AZ
AK
AL
27% - 41%
65% - 86%
1% - 21%
58% - 64%
N/A
Source: Adapted from data from the Kaiser Family Foundation, Medicaid Reforms to Expand Coverage, Control Costs
and Improve Care: Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2015 and 2016, October 15, 2015.
Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com 46
IV. Appendix
PERCENTAGE OF MEDICAID POPULATION IN FFS (NO COMPREHENSIVE MMC)
WY
WI
WV
WA
VA
VT
UT
TX
TN
SD
SC
RI
PA
OR
OK
OH
ND
NC
NY
NM
NJ
NH
NV
NE
MT
MO
MS
MN
MI
MA
MD
ME
LA
KYKS
IA
INIL
ID
HI
GA
FL
DC
DE
CT
CO
CA
AR
AZ
AK
AL
25% - 42%
100%
0% - 23%
50% - 51%
N/A
Source: Adapted from data from the Kaiser Family Foundation, Medicaid Reforms to Expand Coverage, Control Costs
and Improve Care: Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2015 and 2016, October 15, 2015.

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Medicaid Managed Care Final Rule

  • 1. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. ebglaw.com Medicaid Managed Care Final Rule Modernizes and More Closely Aligns Medicaid Managed Care with Medicare Advantage and Exchange Requirements May 19, 2016 Lynn Shapiro Snyder Helaine I. Fingold
  • 2. Š 2015 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com Presented by Helaine Fingold Senior Counsel hfingold@ebglaw.com Phone: 443.663.1354 Lynn Shapiro Snyder Senior Member of the Firm lsnyder@ebglaw.com Phone: 202.861.1806
  • 3. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com Agenda 3 I. Background on Medicaid Managed Care II. Major Provisions of the Proposed Rule a. Introduction b. Network Adequacy c. Medical Loss Ratio d. Actuarially Sound Capitation Rates e. Quality of Care Standards f. Appeals and Grievances g. State Monitoring Standards h. Information Standards i. Managed Long-Term Services and Supports j. Beneficiary Enrollment Protections III. Key Takeaways
  • 4. Š 2015 Epstein Becker & Green, P.C. | All Rights Reserved. ebglaw.com I. Background on Medicaid Managed Care
  • 5. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com  Medicaid is largest U.S. payer (by headcount) • Covers 72 million Americans • $492 billion • Core financing source for safety-net hospitals and health centers that serve low- income communities, plus long-term care facilities  39 states contract with comprehensive Managed Care Organizations (MCOs) for Medicaid • More than 70 percent (46 million) of all Medicaid beneficiaries get at least some care through these entities  CMS last issued comprehensive Medicaid managed care regulations in 2002 Rule also governs managed care under Children’s Health Insurance Program (CHIP) SOURCES: The Henry J. Kaiser Family Foundation, Medicaid Moving Forward (Mar. 9, 2015), available at http://kff.org/health-reform/issue- brief/medicaid-moving-forward/. See also The Henry J. Kaiser Family Foundation, State Health Facts, Total Monthly Medicaid and CHIP Enrollment (Feb. 2016), available at http://kff.org/health-reform/state-indicator/total-monthly-medicaid-and-chip-enrollment/; The Henry J. Kaiser Family Foundation, Key Findings on Medicaid Managed Care: Highlights from the Medicaid Managed Care Market Tracker, (Dec. 2, 2014) http://kff.org/medicaid/report/key-findings-on-medicaid-managed-care-highlights-from-the-medicaid-managed-care-market-tracker/ I. Background on Medicaid Managed Care OVERVIEW 5
  • 6. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com 6 I. Background on Medicaid Managed Care MEDICAID ENROLLMENT TRENDS 1975 1985 1995 2005 2010 2014 2015 Total Enrollment 22 22 33 45 55 66 72 Medicaid Managed Care No data 1 10 29 40 44 46 Traditional Medicaid 22 22 24 17 16 No data No data Medicaid Expansion None None 1 0* 1 5 7 1975 1985 1995 20102005 2014 2015 Health Insurance Exchanges and insurance subsidies available Affordable Care Act enacted In Millions Source: Centers for Medicare & Medicaid 2013 Statistical Supplement, Table 13.4; AIS Medicare and Medicaid Market Data, 2015; Kaiser Family Foundation, Total Monthly Medicaid and CHIP Enrollment for May 2014 and May 2015; CMS, Medicaid Managed Care Penetration Rates as of December 31, 2010; CMS National Summary Of Medicaid Managed Care Programs And Enrollment as of July 1, 2010; CMS, Total Medicaid Enrollees - VIII Group Break Out Report, March 2015, Reported on the CMS-64. Coverage Gains Under Recent Section 1115 Waivers: A Data Update, S. Artiga and C. Mann, Kaiser Family Foundation, August 2005. *Enrollment was above zero but under 500,000, thus was rounded down.
  • 7. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com 7 I. Background on Medicaid Managed Care DEVELOPMENT TIMELINE 1973 19761962 19811965 1982 1994 1997 2010 20162002 Section 1115 added to Social Security Act to allow for waiver of program requirements for pilot or experimental projects Medicaid Program enacted HMO Amendments adds 50/50 rule for Medicaid risk plans OBRA added 1915(b) freedom of choice waivers and replaced 50/50 with 75/25 rule Arizona granted the first statewide Medicaid managed care waiver under Section 1115 Oregon statewide Medicaid managed care waiver approved, allowed for service prioritization Balanced Budget Act allows for mandatory managed care without waiver and eliminates 75/25 rule CMS releases first comprehensive changes to the Medicaid managed care rules in 14 years ACA extends Medicaid drug rebate program to managed care, allows for expansion up to 138% of Poverty CMS releases changes to the Medicaid managed care rules Health Maintenance Organization Act
  • 8. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com I. Background on Medicaid Managed Care MOST STATES USE MEDICAID MANAGED CARE PLANS 8 • WY • WI •WV •WA •VA •VT • UT • TX • TN • SD • SC •RI • PA • OR • OK • OH • ND •NC • NY • NM •NJ • NH •NV • NE •MT •MO • MS • MN • MI •MA •MD • ME • LA • KY• KS • IA • IN• IL •ID •HI • GA • FL • DC •DE • CT • CO• CA • AR• AZ • AK • AL •PCCM only (may include ACO) •MCO only •No Comprehensive MMC •MCO and Primary Care Case Management Source: Adapted from data from the Kaiser Family Foundation, Medicaid Reforms to Expand Coverage, Control Costs and Improve Care: Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2015 and 2016, October 15, 2015.
  • 9. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. ebglaw.com II.a. Major Provisions of the Final Rule – Introduction
  • 10. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com  Modernize managed care in Medicaid and CHIP to • Reflect changes in managed care delivery systems • Facilitate and support delivery system reform initiatives to improve outcomes and manage costs • Strengthen the quality of care provided to Medicaid beneficiaries and • Promote more effective use of data in overseeing managed care programs  Revise MMC and CHIP rules to better align with Medicare Advantage (“MA”) and qualified health plans (“QHPs”) sold through ACA marketplaces  Improve experience for persons who move between coverage options due to changes in circumstances  Reduce administrative burden on regulators and issuers operating in multiple markets  Encourages issuers in MA and ACA marketplaces to enter the Medicaid market this rule modernizes the Medicaid managed care regulatory II.a. Major Provisions of the Final Rule – Introduction AIM OF FINAL RULE 10
  • 11. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com  Applies to all Medicaid Managed Care (“MMC”) entities, including • Managed Care Organizations (“MCOs”) • Prepaid Inpatient Health Plans (“PIHPs”) • Prepaid Ambulatory Health Plans (“PAHPs”) • Managed Long-Term Services and Supports (“MLTSS”) programs  New types of entity -- “PCCM [Primary Care Case Management] Entities” • Reflects entities conducting “enhanced” PCCM services, paid more robust capitation • CMS would hold PCCM Entities to the same standards as other MMC entities  Does not apply to ACOs or Primary Care Medical Homes II.a. Major Provisions of the Final Rule – Introduction WHAT KINDS OF ENTITIES ARE AFFECTED? 11
  • 12. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. ebglaw.com II.b. Major Provisions of the Final Rule – Network Adequacy
  • 13. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com  States must set time and distance standards for providers of: Exceptions allowed if monitored by the state  Other factors states must consider  Expected Medicaid enrollment and utilization of services  Characteristics and health needs of the covered population  Number and types of health care professionals required to provide covered services  Number of network providers that are not accepting new Medicaid patients  Geographic location and accessibility of both providers and enrollees  Ability of providers to ensure accessibility and required equipment for the disabled  Reasonable accommodations  Providers’ ability to communicate in a “culturally competent” manner  Availability of technological solutions  States may apply additional factors which need not be the same or applied uniformly across a state or across provider types II.b. Major Provisions of the Final Rule NETWORK ADEQUACY 13 • Pharmacy • Primary care (adult and pediatric) • OB/GYN • Mental health/Substance use disorder (adult and pediatric) • Pediatric dental • Specialists (adult and pediatric) (can be further defined by states) • Hospital • Other providers if applying such standards “promotes the objectives of the Medicaid program”
  • 14. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com  States are also advised to look to • The state’s network adequacy standards for commercial insurance • MA plan network adequacy standards • Historical patterns of Medicaid utilization  Timeliness would be assessed as routine, urgent, or emergency care  Publish network adequacy standards for transparency  MMC entity required to document network adequacy for state review at least yearly … and when a significant change to operations would affect capacity and services  External Quality Review Organization must validate plans’ network adequacy for the previous 12 months  MLTSS must have distinct network adequacy standards • Based on the same factors as for medical services • May vary, based on whether the enrollee or provider must travel to provide services • Should consider strategies “to ensure the health and welfare of enrollees using LTSS and to support community integration of individuals receiving LTSS” II.b. Major Provisions of the Final Rule NETWORK ADEQUACY 14
  • 15. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. ebglaw.com II.c. Major Provisions of the Final Rule – Medical Loss Ratio
  • 16. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com  States must develop capitation rates so that managed care plans can be expected to reasonably achieve at least an 85 percent MLR • States may choose higher minimum  Standards for calculating the MLR are consistent with those for MA and the private market with some variation due to unique characteristics of the Medicaid and CHIP  Calculates the MLR over a 12-month period  States may collect remittances if MMC entity has MLR <85 percent (with FMAP percentage returned to the federal government)  CMS acknowledges its lack of enforcement authority over Medicaid MLR • However, CMS will use its authority over approval of capitation rates to ensure that rates are adequate to enable plans to show an expected MLR of 85 percent or higher II.c. Major Provisions of the Final Rule MEDICAL LOSS RATIO 16
  • 17. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com  Incurred claims consist of all claims costs for covered state plan services, including, for example • Incentive and bonus payments paid and expected to be paid to providers • Anticipated coordination of benefits recoveries  Amounts which must be deducted from incurred claims include, for example • Prescription drug rebates • Overpayment recoveries • Amounts paid, including to a provider, for professional or administrative services that do not represent compensation or reimbursement for State plan services II.c. Major Provisions of the Final Rule MEDICAL LOSS RATIO 17 Medicaid MLR Incurred claims + Quality Improvement Expenditures Premium Revenue - Federal & State Taxes, Licensing & Regulatory Fees
  • 18. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com  Quality improvement activities include those related to service coordination, case management and activities supporting state goals for community integration  Detail not stated in regulation leaving it to individual states to determine which activities qualify as quality improvement  Pass-through payments as directed by the state that are not tied to utilization or quality are not included in either the numerator or the denominator, for example • Graduate medical education payments or supplemental payments for uncompensated care II.c. Major Provisions of the Final Rule MEDICAL LOSS RATIO 18 Medicaid MLR Incurred claims + Quality Improvement Expenditures Premium Revenue - Federal & State Taxes, Licensing & Regulatory Fees
  • 19. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. ebglaw.com II.d. Major Provisions of the Final Rule – Setting Actuarially Sound Capitation Rates
  • 20. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com  Aims to ensure that MCO, PIHP, and PAHP Medicaid rates are developed in a transparent and consistent manner across MMC programs  Incorporates principles of actuarial soundness: • Rates should be sufficient and appropriate for the anticipated service utilization of the populations and services covered and compensate plans for reasonable non-benefit costs • Capitation rates should promote program goals, such as quality of care, improved health, community integration of enrollees, and cost containment • Actuarial rate certification should give sufficient detail, documentation, and transparency of rate-setting components • Transparent and uniformly applied rate review and approval process based on actuarial practices should ensure that both the state and CMS act effectively as fiscal stewards and in the interests of beneficiary access to care  Sets forth the types of data to be used for rate setting and the level of documentation/ detail so CMS can more effectively review and approve rates II.d. Major Provisions of the Final Rule SETTING ACTUARIALLY SOUND CAPITATION RATES 20
  • 21. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com  States need to certify each individual rate per rate cell as actuarially sound • “Rate cell” is a set of mutually exclusive categories of enrollees defined by one or more characteristics for the purpose of determining the capitation rate, o May include age, gender, eligibility category, and region or geographic area • May no longer use capitation rate ranges  States are given flexibility to increase or decrease the certified capitation rate by one and a half percent without the need to submit a revised rate certification for CMS’ review and approval  State may use risk sharing arrangements, incentive arrangements, and withholds arrangements to reward MCOs, PIHPs, and PAHPs for meeting performance targets specified in the contract • Contracts would need to include a description of any risk sharing mechanisms and those mechanisms must be computed on an actuarially sound basis II.d. Major Provisions of the Final Rule SETTING ACTUARIALLY SOUND CAPITATION RATES 21
  • 22. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. ebglaw.com II.e. Major Provisions of the Final Rule – Quality of Care Provisions
  • 23. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com  Quality provisions of Final Rule seek to enhance transparency, align quality measurements with other systems of care where possible, and strive to improve consumer and stakeholder engagement  Proposed changes center on • Quality Performance review and approval process • Development of a quality rating system • Expansion of the comprehensive quality strategy to encompass FFS and MMC • Data and information disclosure to increase accountability • Standards for performance measures and topics for performance improvement projects • Revisions to the external quality review system II.e. Major Provisions of the Final Rule QUALITY OF CARE STANDARDS 23
  • 24. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com Quality Performance Review and Approval Process (“QPRAP”)  States must • Require through contract that each MCO, PIHP, PAHP, and certain PCCM entities establish and implement an ongoing comprehensive quality assessment program for the services it provides to enrollees • Review at least annually the impact and effectiveness of the QPRAP of each entity  QPRAPs must include • Performance Improvement Projects (“PIPs”) • Collection and submission of performance measurement data • Mechanisms to detect both underutilization and overutilization of services • Mechanisms to assess the quality and appropriateness of care furnished to enrollees with special health care needs, including those in MLTSS  Information from annual reviews must be publicly available on the state’s website II.e. Major Provisions of the Final Rule QUALITY OF CARE STANDARDS 24
  • 25. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com Quality Rating System (“QRS”)  State may use CMS-defined QRS or develop its own subject to CMS approval  Based on (but not identical to) summary indicators used in Exchange QRS • Clinical quality management • Member experience • Plan efficiency, affordability and management  Refined by robust public process, including notice and comment, over 3-5 years  Methodology reassessed every 2-3 years to accommodate changes  Did NOT finalize proposal to allow states to rely on the MA 5-star ratings for dual eligible plans  States must post ratings online to help beneficiaries to make informed decisions II.e. Major Provisions of the Final Rule QUALITY OF CARE STANDARDS 25
  • 26. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com External Quality Review  The Secretary will develop protocols for External Quality Review (“EQR”)  State must contract with EQR Organization (“EQRO”)  EQR activities include • Validation of network adequacy for prior 12 months, different from assessing availability of services (required) • Validation of compliance with MCO, PIHP and PAHP standards for previous 3-year period (required) • PIP validation • Validation of encounter data (optional) • Administration of consumer or provider surveys on quality of care (optional)  State may rely on results of Medicare review or private accreditation survey instead of requiring EQR performance of required EQR activities II.e. Major Provisions of the Final Rule QUALITY OF CARE STANDARDS 26
  • 27. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. ebglaw.com II.f. Major Provisions of the Final Rule – Appeals and Grievances
  • 28. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com  Aligns Medicaid/CHIP appeals and grievance processes with those for MA and QHPs • Current differences hinder creation of a streamlined process across the public and private managed care sectors, creating unnecessary administrative complexity for those participating across product lines  Appeals and grievances requirements are extended to PAHPs  MMC plans must offer one level of internal appeal after which beneficiaries may request a state fair hearing, similar to rules for individual QHP products and MA  Plan failure to meet timeframes deems enrollee as meeting exhaustion requirements  Providers would be allowed to appeal on behalf of beneficiaries with written consent from enrollees (changed from proposed rule which said without consent)  Timing for resolution of appeals would be reduced • For standard appeal determinations to 30 days from 45 • For expedited appeal determinations to 72 hours from 3 working days II.f. Major Provisions of the Final Rule APPEALS & GRIEVANCES 28
  • 29. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com  Procedural protections for appeals are strengthened • Clarifies information that must be considered in an appeal and that which must be made available to beneficiaries • Requires implementation of reversal of adverse benefit determination within 72 hours  Timeframe for enrollees to request a state fair hearing extended from a maximum of 90 days to 120 calendar days  Continuation of benefits while appeal is pending • MMC plans would no longer be able to stop any services pending determination of appeals • States may allow recoupment from enrollee if adverse determination upheld so long as the same standard is applied to both FFS and managed Medicaid II.f. Major Provisions of the Final Rule APPEALS & GRIEVANCES 29
  • 30. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. ebglaw.com II.g. Major Provisions of the Final Rule – State Monitoring Standards
  • 31. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com  States must • Implement a monitoring/oversight system to address, at a minimum: • Submit annual program assessment to CMS and post the assessment publicly • Use data collected from its monitoring activities to improve the performance of its managed care program • Conduct readiness assessments of each MCO, PIHP, PAHP and PCCM entity as follows: o Prior to start of a new managed care program, when a new contractor enters an existing program or when the state adds new benefits, populations, or geographic areas to the scope of its contracted managed care plans • Readiness review would, at baseline, assess: plan operations and administration, service delivery, financial management and systems management II.g. Major Provisions of the Final Rule STATE MONITORING STANDARDS 31 • Administration and management • Appeal and grievance systems • Claims management • Enrollee materials and customer services • Finance, including MLR reporting • Information systems, including encounter data reporting • Marketing • Medical management, including utilization management • Program integrity • Provider network management • Quality improvement • Delivery of LTSS
  • 32. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. ebglaw.com II.h. Major Provisions of the Final Rule – Information Requirements
  • 33. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com  Changes made to strengthen MMC beneficiary information dissemination rules, more closely align with MA and commercial, better reflect technology advances, recognize cultural/linguistic diversity of Medicaid beneficiaries  Apply consistently across MMC plans, including MCOs, PIHPs, PAHPs, PCCM and PCCM entities, with respect to enrollee materials  States and MMC entities must make materials available in prevalent languages  To include taglines on availability of written materials in those languages and oral interpretation in understanding the materials  MMC entities must also make available vital documents in each prevalent non- English language in the MMC’s service area, to include • Provider directories • Member handbooks • Formulary • Other notices critical to obtaining services  MMC entities also must post provider directories on their websites in a CMS- specified machine-readable file and format II.h. Major Provisions of the Final Rule INFORMATION REQUIREMENTS 33
  • 34. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. ebglaw.com II.i. Major Provisions of the Final Rule – Managed Long-Term Services & Supports
  • 35. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com  In 2004, eight states (AZ, FL, MA, MI, MN, NY, TX, and WI) had implemented MLTSS programs. By January 2014, 12 additional states had implemented MLTSS programs (CA, DE, IL, KS, NC, NM, OH, PA, RI, TN, VA, WA)  New requirements on MLTSS when provided through MCOs, PIHPs and PAHPs • Enrollment and benefits complaint mechanism • Education • Assistance with grievances, appeals, and fair hearings, and • Review of program data to identify and resolve systemic issues  Regulation provides new requirements on MLTSS in support of the 10 key principles for MLTSS set out in 2013 guidance II.i. Major Provisions of the Final Rule MANAGED LONG-TERM SERVICES AND SUPPORTS 35 • Adequate program planning • Stakeholder engagement • Enhanced home and community-based services • Payment alignment • Beneficiary support and protections • Person-centered process • Comprehensive, integrated service package • Qualified providers • Participant protections • Quality
  • 36. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. ebglaw.com II.j. Major Provisions of the Final Rule – Beneficiary Enrollment Provisions
  • 37. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com  States may passively enroll beneficiaries effective upon eligibility determination, subject to the enrollees’ right to opt-out or elect a different managed care plan  CMS declined to finalize 14-day choice period to affirmatively choose a plan or opt for FFS  For passive or default enrollment • States must seek to “preserve provider-beneficiary relationships and relationships with providers that have traditionally served Medicaid” • If not possible, states must equitably distribute beneficiaries among available plans and may not arbitrarily exclude any plans • Additional assignment criteria are permitted, to reflect o Beneficiary location and preferences o Previous plan assignment o Access needs for disabled beneficiaries o Quality and procurement considerations II.j. Major Provisions of the Final Rule – Other BENEFICIARY ENROLLMENT PROVISIONS 37
  • 38. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. ebglaw.com III. Key Takeaways
  • 39. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com  CMS goal: harmonization across MMC, MA, QHPs i. Administrative simplification ii. Continuity for beneficiaries as they move between markets  Provider impact: Generally positive i. Floor on MMC medical spend thanks to minimum MLR, actuarial soundness ii. More emphasis/value on health care quality iii.Consistency across Medicaid, Medicare, commercial managed care  Impact on health plans: Neutral to positive i. Actuarial soundness promotes adequate capitation rates ii. State-to-state consistency lessens burden on multi-state issuers  Impact on states: Variable i. Potentially heavy transition burden on states w/ most developed MMC III. Key Takeaways 39
  • 40. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com Questions? 40 Helaine Fingold Senior Counsel, Epstein Becker & Green hfingold@ebglaw.com Phone: 443.663.1354 Lynn Shapiro Snyder Senior Member of the Firm, Epstein Becker & Green lsnyder@ebglaw.com Phone: 202.861.1806
  • 41. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. ebglaw.com IV. Appendix
  • 42. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com  Section 1915(a) of the Social Security Act (the SSA) • Allows states to implement a voluntary managed care program  State plan amendment (SPA) under section 1932 of the SSA • Allows states to implement mandatory managed care program • Does not allow for inclusion of dual eligibles, American Indians/Alaska Natives, or children with special health care needs  Section 1915(b) of the SSA (waiver authority) • Allows states to pursue a waiver to implement mandatory managed care, including for those excepted under a SPA  Section 1115(a) of the SSA (waiver authority) • Allows states to pursue waiver to implement mandatory managed care for all beneficiaries as part of a demonstration project • State may request approval to provide services not typically covered by Medicaid IV. Appendix FEDERAL AUTHORITIES FOR MEDICAID MANAGED CARE DELIVERY 42
  • 43. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com  Statewideness (section 1902(a)(1) of the SSA) • Waiver allows states to implement managed care in specific areas of the State (generally counties/parishes) rather than the entire state  Comparability of Services (section 1902(a)(10) of the SSA) • Waiver allows states to provide different benefits to beneficiaries enrolled in a managed care delivery system as compared to those in fee-for-service Medicaid  Freedom of Choice (section 1902(a)(23)(A) of the SSA) • Waiver allows states to require beneficiaries to receive their Medicaid services only from a managed care plan or primary care provider  Allows for payment of costs not otherwise eligible under section 1903 of the SSA (Section 1115 only) IV. Appendix PROVISIONS ELIGIBLE FOR WAIVER UNDER SSA 1915(b) & 1115 43
  • 44. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com 44 IV. Appendix PERCENTAGE OF MEDICAID POPULATION IN MCOS WY WI WV WA VA VT UT TX TN SD SC RI PA OR OK OH ND NC NY NM NJ NH NV NE MT MO MS MN MI MA MD ME LA KYKS IA INIL ID HI GA FL DC DE CT CO CA AR AZ AK AL 51% - 53% 78% - 100% 9% - 21% 63% - 77% Source: Adapted from data from the Kaiser Family Foundation, Medicaid Reforms to Expand Coverage, Control Costs and Improve Care: Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2015 and 2016, October 15, 2015. N/A
  • 45. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com 45 IV. Appendix PERCENTAGE OF MEDICAID POPULATION IN PCCMS WY WI WV WA VA VT UT TX TN SD SC RI PA OR OK OH ND NC NY NM NJ NH NV NE MT MO MS MN MI MA MD ME LA KYKS IA INIL ID HI GA FL DC DE CT CO CA AR AZ AK AL 27% - 41% 65% - 86% 1% - 21% 58% - 64% N/A Source: Adapted from data from the Kaiser Family Foundation, Medicaid Reforms to Expand Coverage, Control Costs and Improve Care: Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2015 and 2016, October 15, 2015.
  • 46. Š 2016 Epstein Becker & Green, P.C. | All Rights Reserved. | ebglaw.com 46 IV. Appendix PERCENTAGE OF MEDICAID POPULATION IN FFS (NO COMPREHENSIVE MMC) WY WI WV WA VA VT UT TX TN SD SC RI PA OR OK OH ND NC NY NM NJ NH NV NE MT MO MS MN MI MA MD ME LA KYKS IA INIL ID HI GA FL DC DE CT CO CA AR AZ AK AL 25% - 42% 100% 0% - 23% 50% - 51% N/A Source: Adapted from data from the Kaiser Family Foundation, Medicaid Reforms to Expand Coverage, Control Costs and Improve Care: Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2015 and 2016, October 15, 2015.