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    New CMS rule could significantly impact Medicaid managed care


    What state Medicaid and CHIP programs should do

    For state Medicaid and CHIP programs, successful implementation of the new rule is dependent on their ability to collect, store, analyze, and report on operational, financial, and program data from managed care plans. 

    This makes CMS’s recent permanent extension of the 90% federal matching funds for certain state Medicaid IT development efforts particularly meaningful, as these funds can be an important resource for states seeking to acquire or improve data management tools for managed care.

    Implementing a number of the proposed rule mandates will require that states have good access to managed care plan data and the ability to analyze that data efficiently and effectively for policy creation and program oversight purposes.

    Most importantly, the proposed regulation clarifies that CMS will not pay for Medicaid managed care services unless it is provided with encounter data for those services that meet CMS standards on accuracy, completeness, and use of an industry standard format. 

    Many states have struggled to collect complete and accurate encounter data from managed care plans, and have also had difficulty managing that data in legacy systems designed for fee-for-service claims. 

    Once the final rule is issued, states will have 90 days to submit to CMS a detailed compliance plan, which will likely push them to revise managed care contracts and quickly develop or enhance data collection and management systems to meet the encounter data standards. 

    Another data-dependent provision is the requirement that states implement time and distance standards for network adequacy for key provider types (e.g. hospitals, primary care and specialty physicians, behavioral health providers) to help ensure adequate access to care for beneficiaries.

    At a basic compliance level, developing and monitoring these rules requires accurate beneficiary and provider enrollment data.  However, there are sophisticated geographic information system-based tools, which would also allow states to model overall demand for providers’ time based on local population density, population health status, and other factors, since many providers serve both Medicaid and non-Medicaid patients.

    There are also a number of quality-related requirements that depend on accurate and timely data.  States must develop quality improvement plans that apply to both fee-for-service and managed care, and report to CMS on a core set of quality measures. 

    A subset of these measures will also be used for a Medicaid quality rating program that will be aligned with quality standards for QHPs and Medicare Advantage plans, and to engage consumers and stakeholders in the development of strategies for measuring and improving quality.

    Next: Softening the blow


    Megan Renfrew
    Megan Renfrew is a director in the Cognosante Solutions Lab. An accomplished health policy expert who spent more than five years ...


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