CMS proposes changes to managed Medicaid, CHIP: 7 things to know

CMS issued a proposed rule Nov. 8 aimed at overhauling its 2016 managed care regulations for Medicaid and the Children's Health Insurance Program.

Here are seven things to know:

1. Under managed care systems, states contract with private health insurers to administer Medicaid and CHIP plans. In 2016, more than two-thirds of Medicaid beneficiaries were in a managed care plan, and states are continuing to expand their use of managed care contracts.

2. CMS said it worked with the National Association of Medicaid Directors and state Medicaid directors to review and analyze current regulations. Their proposed changes aim to create more flexibility and target provisions that states and stakeholders said are costly and burdensome.

3. Among the proposals, CMS said it will let states develop and certify a rate range, as long as it meets specific conditions. It will also provide states a three-year transitional period to comply with pass-through payment requirements. Pass-through payments are what the government pays Medicaid managed care plans in addition to their base capitation rate, and the plans must pass payments to contracted providers.

4. The rule proposes giving states more flexibility to set network adequacy standards that can include telehealth services.

5. CMS also said it will try to move states through their federal rate review process quicker by allowing states to submit less documentation in some circumstances. It will also let states tailor an alternative Quality Rating System, while requiring states to meet a minimum set of mandatory measures.

6. CMS proposed prohibiting states from retroactively adding or modifying risk-sharing mechanisms.

7. While CMS is not proposing any changes to its limitation of 15 days on lengths of stay for managed care beneficiaries in an institution for mental disease, it acknowledged states' concern that this rule poses administrative burdens.

For the full proposal, click here.

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