It has been more than two years since the Centers for Medicare & Medicaid Services (CMS) released its Medicaid and CHIP Managed Care Final Rule in 2016. Under the Trump administration, CMS promised to review these regulations and recently issued proposed updates in November 2018. The proposed rules clarify CMS’ expectations and provide states some additional administrative flexibility to meet access, quality, and efficiency objectives.

The proposed rule will have limited overall impact on current Medicaid managed care operations for states and health plans. Many of the provisions are technical clarifications and tweaks to correct  inadvertent references in the 2016 final Medicaid managed care regulations, align requirements with other government programs, or make clear CMS’ expectations.

Top Takeaways From the Proposed Rule

1. Greater operational flexibility for requirements already in effect: While the proposed rule provides some additional administrative flexibility, states have already implemented most of the 2016 final Medicaid managed care regulations through contract amendments and/or policies. Moving forward, states may be able to take advantage of the relaxed provisions.
2. Easier for states to justify the transition of populations and services into full-risk managed care: CMS proposes an exception to its previous prohibition on new pass-through payments. The proposed rule allows states to make pass-through payments for a period of up to three years if expanding managed care programs to new populations or services, as long as certain conditions are met. This allowance may be most beneficial to states that currently make supplemental payments to provider types that serve populations or provide services that states wish to transition to managed care.
3. Alignment of quality rating system (QRS) measures to enable meaningful comparison across states: The proposed rule allows states to use an alternative state QRS and commits CMS to aligning performance measures within the QRS with other related CMS quality rating approaches. This includes the Medicare Advantage star rating system and summary indicators used by the QRS developed for qualified health plans in the federally-facilitated exchange.
4. Remaining implementation timelines for 2016 final Medicaid managed care regulations still in effect: We previously developed a cheat sheet to help states stay on track with requirements and timelines. Based on our review of the proposed rule, there are no changes to these previously set implementation timelines.

The deadline for the public to submit comments on the proposed rule is Jan. 14, 2019. Subsequently, CMS will have to respond to public comments and issue a final rule before states will have to comply.