CMS Final Rule
Overview • On April 25, 2016, CMS issued a final rule on managed care for Medicaid and CHIP ( published in the Federal Register on May 6, 2016 ). • First Update to the Medicaid Managed Care regulations since 2002. • Seeks to modernize the Medicaid managed care regulations to reflect changes in managed care delivery systems. 2 OPTIONAL FOOTER TO REPEAT ON EACH PAGE: INSERT AUDIENCE | PRESENTATION TOPIC OR TITLE | DATE
Overview • Align the rules governing Medicaid managed care with other health benefits programs. • Strengthen actuarial soundness payment provisions. • Promote quality of care. –Strengthen efforts to reform delivery systems. –Ensure appropriate beneficiary protections. • Enhance policies related to program integrity. • Implement statutory provisions. 3 OPTIONAL FOOTER TO REPEAT ON EACH PAGE: INSERT AUDIENCE | PRESENTATION TOPIC OR TITLE | DATE
Goals of the Final Rule • To support State efforts to advance delivery system reform and improve the quality of care • To strengthen the beneficiary experience of care and key beneficiary protections • To strengthen program integrity by improving accountability and transparency • To align key Medicaid and CHIP managed care requirements with other health coverage programs. 4 OPTIONAL FOOTER TO REPEAT ON EACH PAGE: INSERT AUDIENCE | PRESENTATION TOPIC OR TITLE | DATE
Key Dates • Publication of Final Rule – May 6 th (81 FR 27498) • Effective date of the Final Rule is July 5, 2016 • Phased implementation of new provisions primarily over 3 years, starting with contracts on or after July 1, 2017 • Compliance with CHIP provisions beginning with the state fiscal year starting on or after July 1, 2018 5 OPTIONAL FOOTER TO REPEAT ON EACH PAGE: INSERT AUDIENCE | PRESENTATION TOPIC OR TITLE | DATE
Effective Date – July 5, 2016 There are a number of provisions that States must comply with as of the July 5 th effective date of the Final Rule. • Many of these provisions were unchanged from the 2002 rule. • New Provisions of note include: –438.3(a) and 438.7(a): CMS review and approval of contracts and rate certifications –438.3(e): In Lieu of Services –438.6(e): Capitation Payments to PIHPs for Enrollees with a Short Stay in an IMD 6 OPTIONAL FOOTER TO REPEAT ON EACH PAGE: INSERT AUDIENCE | PRESENTATION TOPIC OR TITLE | DATE
In Lieu of Services • In lieu of services are medically appropriate and cost effective alternatives to state plan services or settings. • Enrollees are not required to use the in lieu of service • Approved in lieu of services are authorized and identified in the PIHP contract. • The utilization and cost is taken into account in developing the capitation rates. 7 OPTIONAL FOOTER TO REPEAT ON EACH PAGE: INSERT AUDIENCE | PRESENTATION TOPIC OR TITLE | DATE
Institution for Mental Disease (IMD) • Permits state to make monthly capitation payment to the PIHP for an enrollee, aged 21-64, that has a short term stay in an IMD –Short term stay: no more than 15 days within the month –Establishes rate setting requirements for utilization and price of covered services rendered in alternative setting of the IMD 8 OPTIONAL FOOTER TO REPEAT ON EACH PAGE: INSERT AUDIENCE | PRESENTATION TOPIC OR TITLE | DATE
Rating Period Starting On or After July 1, 2017 –438.3(s): Covered Outpatient Drugs –438.5: Rate Development Standards –438.6(b)(s): Withhold Arrangements –438.6(c): Delivery System and Provider Payment Initiatives –438.6(d): Pass-through Payments –438.8: Calculation and Reporting of Plan Medical Loss Ratio –438.242: Health Information Systems –438.330: Quality Assessment and Performance Improvement –Subpart F: Appeals and Grievances –Subpart H: Program Integrity 9 OPTIONAL FOOTER TO REPEAT ON EACH PAGE: INSERT AUDIENCE | PRESENTATION TOPIC OR TITLE | DATE
Rating Period Starting On or After July 1, 2018 –438.4(b)(3): Actuarial Soundness – Capitation rates adequate to meet 438.206, 438.207, and 438.208 –438.4(b)(4): Actuarial certification to capitation rate per rate cell –438.7(c)(3): Ability to increase or decrease certified capitation rate per rate cell by 1.5 percent without revised rate certification –438.62: Continued Services to Enrollees (Transition of Care Policies) –438.68: Network Adequacy Standards –438.71: Beneficiary Support System –438.206: Availability of Services –438.207: Assurance of Adequate Capacity and Services –438.602(b) & 438.608(b): Screening and Enrollment of Network Providers –438.818: Enrollee Encounter Data 10 OPTIONAL FOOTER TO REPEAT ON EACH PAGE: INSERT AUDIENCE | PRESENTATION TOPIC OR TITLE | DATE
Rating Period Starting On or After July 1, 2019 –438.4(b)(3): Actuarial Soundness – Development of capitation rates so that a managed care plan can reasonably achieve an MLR of at least 85 percent 11 OPTIONAL FOOTER TO REPEAT ON EACH PAGE: INSERT AUDIENCE | PRESENTATION TOPIC OR TITLE | DATE
Approaches to Payment • Clarifies state payment-related tools for managed care plan performance –Establishes requirements for withhold arrangements –Retains requirements for incentive arrangements • Acknowledges that states may require managed care plans to engage in value-based purchasing initiatives • Permits states to set min/max network provider reimbursement levels for network providers that provide a particular services • Transition period for pass-through payments to hospitals, physicians and nursing facilities. These provisions apply to rating periods starting on or after July 1, 2017. 12 OPTIONAL FOOTER TO REPEAT ON EACH PAGE: INSERT AUDIENCE | PRESENTATION TOPIC OR TITLE | DATE
Encounter Data • Collect and submit encounter data sufficient to identify the provider rendering the service • Submit all encounter data necessary for the State to meet its reporting obligation to CMS • Submit encounter data in appropriate industry standard formats (i.e., ASC X12N 837, ASC X12N 835, NCPDP) These provisions apply to rating periods starting on or after July 1, 2017. 13 OPTIONAL FOOTER TO REPEAT ON EACH PAGE: INSERT AUDIENCE | PRESENTATION TOPIC OR TITLE | DATE
Medical Loss Ratio – Key Elements • 85% - Minimum MLR • Annual audited financial reports specific to the Medicaid contract • Managed care plans calculate and report their MLR consistent with the contract period – Calculated in accordance with 438.8 – Submit to state within 12 months of the MLR reporting year – Calculated over the entire population • Numerator = incurred claims + activities that improve health care quality + fraud reduction activities • Denominator = premium revenue MINUS taxes, fees, assessments 14 OPTIONAL FOOTER TO REPEAT ON EACH PAGE: INSERT AUDIENCE | PRESENTATION TOPIC OR TITLE | DATE
Screening of Network Providers • 438.602 438.602(b)(1): The State must scree een a and d en enrol oll , and periodically revalidate, all n ll network pr provider ers of MCOs, PIHPs, and PAHPs, in accor orda dance w with t the r requirem emen ents of p f part 455, 455, subparts B a and E o of t f this chapter . • This pr provision on d does n not ot require t e the n net etwor ork pr provider der t to ren ender der s ser ervices t s to o FFS b ben enef eficiaries. 15 OPTIONAL FOOTER TO REPEAT ON EACH PAGE: INSERT AUDIENCE | PRESENTATION TOPIC OR TITLE | DATE
Provider Integrity Requirements • Administrative and management arrangements or procedures to detect and prevent FWA: • Designation of a compliance officer who reports directly to CEO and Board of Directors • Establishment of a Regulatory Compliance Committee on Board of Directors and at the Senior Management level. • Establishment and implementation of procedures and a system with dedicated staff for routine internal monitoring and auditing of compliance risks 16 OPTIONAL FOOTER TO REPEAT ON EACH PAGE: INSERT AUDIENCE | PRESENTATION TOPIC OR TITLE | DATE
Provider Integrity Requirements • Each plan that receives annual payments under the contract of at least 5 million must have policies and procedures written for all employees and any contractor or agent, that provide detailed information about the false claims act including employees rights as whistleblowers. • Prompt reporting of all overpayments identified or recovered, specifying the overpayment due to potential fraud to the State. • Contracts must specify: –The retention of recoveries of all overpayments from the MCO to a provider. –Includes timeframes, process required for reporting the recovery of all overpayments. 17 OPTIONAL FOOTER TO REPEAT ON EACH PAGE: INSERT AUDIENCE | PRESENTATION TOPIC OR TITLE | DATE
Right to Audit • The subcontractor must agree that the state, CMS, Health and Human Services (HHS) Inspector General, and Comptroller General have the right to audit, evaluate and inspect any books, records, contracts or electronic systems of the subcontractor that pertain to any aspect of services and activities performed or determination of amounts payable. • The subcontractor will make available for an audit, evaluation or inspection its premises, equipment, books, records, contracts, computer or other electronic systems relating to its Medicaid enrollees. • The right to audit will exist through ten years from the final date of the contract period or from the date of completion of any audit, whichever is later. 18 OPTIONAL FOOTER TO REPEAT ON EACH PAGE: INSERT AUDIENCE | PRESENTATION TOPIC OR TITLE | DATE
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