CMS Unveils Massive Overhaul to Medicaid Managed Care

Consumer protections and rules to promote the march to value-based care are highlights of the massive proposal.

Rating systems for Medicaid managed care plans and protections that make it easier for consumers to move between Medicaid and qualified health plans as their circumstances change are just 2 elements of the massive proposal unveiled today by the Centers for Medicare & Medicaid Services (CMS), which seeks to update rules for the first time since 2002.

Andy Slavitt, acting administrator for CMS, said the proposal’s 3 main aims are to improve transparency and consumer protections, provide better care coordination, and allow states to pursue delivery system reforms that are well under way in Medicare Advantage and in commercial insurance. "A lot has changed in terms of best practices and the delivery of important health services in the managed care field over the last decade," he said.

Overall, the proposed rule seeks to bring Medicaid managed care in line with the goals for value-based reimbursement outlined earlier this year by US Secretary Sylvia Mathews Burwell, who has stated that 50% of Medicare reimbursements will be value-based by 2018.

But Slavitt emphasized that the proposal gives states the flexibility to tailor Medicaid managed care based on local conditions, and that he was “excited to allow states to have continued room for innovation.”

Vikki Wachino, CMS Deputy Administrator/Director of the Center for Medicaid and CHIP Services, filled in details during the briefing with reporters today. Among the highlights:

  • Rules will allow managed care contractors to communicate more effectively with clients whose incomes are declining and will be transitioning to Medicaid.
  • A rating system will be developed to evaluate the quality of plans, but CMS will take input on whether it should resemble the “Star” ratings in Medicare Advantage or some other system.
  • A number of proposals seek to update the advance of technology since 2002.

CMS reports that more than half of all beneficiaries receive some or all of their care through managed care organizations, or MCOs. A year-end review in 2014 by the Kaiser Family Foundation found that some form of Medicaid managed care existed in 39 states, with varying levels of penetration.

Since the last update, the Internet has become a cornerstone of communication for almost everything, and even the very poor are likely to have smartphones, which many have in lieu of land lines. Consumer advocates have decried the lack of requirements for doctors’ directories and other essential pieces of information to be updated continuously online. Consumers and doctors themselves routinely complain about out-of-date lists that limit the ability of Medicaid clients to find a primary care physician, much less specialists.

In a statement, the National Association of Medicaid Directors pledged to work with CMS to ensure ongoing flexibility and innovation. "In many states, Medicaid managed care has become an important tool in transforming a fragmented health care system that pays based on volume into a patient-centered, coordinated model of care that pays based on value. While some states now have decades of experience in Medicaid managed care arrangements, the industry is still evolving in many ways. Therefore, oversight at both the state and federal levels is vitally important to ensuring these goals," the statement said.