Insights into the Medicaid and CHIP Managed Care Access, Finance and Quality Rule

Insights into the Medicaid and CHIP Managed Care Access, Finance and Quality Rule

Insights into the Medicaid and CHIP Managed Care Access, Finance and Quality Rule 

The long awaited Medicaid and Children’s Health Insurance Program (CHIP) Managed Care Access, Finance, and Quality Final Rule (Final Rule) was released in April and includes provisions that seek to ensure access to care, address financing provisions including in lieu of services and state-directed payment arrangements, and enhance monitoring of standards for Managed Care Organizations (MCO), Prepaid Inpatient Health Plans (PIHP), and Prepaid Ambulatory Health Plans (PAHP). Key topics addressed by the rule include: 

• • • Enhancing access to care standards for Medicaid and CHIP managed care entities, including through new standards for appointment wait times and provider directories, and helping states improve their monitoring of access to care by requiring and annual enrollee experience surveys.  
    • Setting state website requirements for content and ease of use to improve transparency and provide valuable information to enrollees, providers, and the Centers for Medicare and Medicaid Services (CMS). 
    • Reducing the burden for states that choose to establish State Directed Payment arrangements with MCOs, PIHPs, or PAHPs; enhancing quality, fiscal and program integrity of State Directed Payments; and addressing impermissible redistribution arrangements related to State Directed Payments. 
    • Creating new standards that will apply when states use in lieu of services (ILOS) and settings to promote effective utilization and which specify the scope and nature of these services and settings. 
    • Requiring States to submit a Medicaid managed care plan analysis of plan payments to providers for specific services to monitor network adequacy more closely.
    • Adding clarity to the requirements related to medical loss ratio calculations.
    • Increasing transparency and meaningfulness of quality reporting that drives quality improvement, reducing burden of certain quality reporting requirements, and establishing requirements for implementing a Medicaid and CHIP quality rating system to empower beneficiary choice in managed care. 

This article examines the first three topics: access to care standards and monitoring, state website requirements, and changes to State Directed Payments, including what they mean for states and important timelines. 

Access to Care and Monitoring Standards

With the rule, CMS continues to focus on ensuring beneficiaries receive high-quality care through access standards and the monitoring of managed care programs using surveys that provide data on areas of improvement in Medicaid and CHIP programs. These updated rules provide additional criteria to assist states in several different areas:

Appointment Wait Time Standards

 The final rule defines maximum appointment wait times for specified providers: 

• • • • Outpatient mental health and substance use disorder (adult and pediatric) – within state-established timeframes but no longer than 10 business days from the date of request  
      • Primary care (adult and pediatric) – within state-established timeframes but no longer than 15 business days from the date of request 
      • Obstetrics and gynecological – within state-established timeframes but no longer than 15 business days from the date of request.  
      • Another state-selected service chosen in an evidence-based manner – within State-established timeframes 

These requirements apply in each MCO, PIHP, and PAHP for providers covered under their contract. 

States are required to comply with these appointment wait time standards no later than the first managed care rating period beginning on or after July 9, 2027. 

Provider Directory Standards 

CMS is updating requirements for provider directories maintained by MCOs, PIHPs, and PAHPs. Directories must now comply with the following requirements: 

• • • Electronic directories must be searchable 
    • Directories must include whether the provider offers covered services via telehealth 
    • Behavioral health providers are renamed to mental health and substance use disorder providers 

States are required to comply with these provider directory standards no later than July 1, 2025. 

Secret Shopper Surveys 

Maintaining the promotion of surveys as a data collection tool, CMS will require states to conduct annual secret shopper surveys to confirm managed care plan compliance with the appointment wait time standards and provider directory information required in the final rule. 

Secret shopper surveys must be performed through an independent entity not affiliated with the State Medicaid Agency or any of its contracted MCOs, PIHPs, or PAHPs. Survey methods must use a random sample, include all areas of the state covered by the MCO’s, PIHP’s, or PAHP’s contract, and – for secret shopper surveys assessing appointment wait time standards – be completed for a statistically-valid sample of providers. 

Surveys must confirm compliance with the new appointment wait time standards and verify the accuracy of provider directories of these provider types if they are included in the MCO’s, PIHP’s, or PAHP’s provider directory: primary care providers, obstetric and gynecological providers, outpatient mental health and substance use disorder providers, and the provider type that provides the service type chosen by the State. 

For confirmation of provider directory information, the secret shopper survey must assess the accuracy of these elements:  

• • • Active network status with the MCO, PIHP, or PAHP 
    • Street address(es)  
    • Telephone number(s); and  
    • Whether the provider is accepting new enrollees. 

The independent entity conducting the survey must share errors in directory data identified in secret shopper surveys with the state within three business days from the day the error is identified. The state must then notify the applicable MCO, PIHP, or PAHP within three business days from receipt of the information. 

Once an analysis of the secret shopper survey data has been completed, a report of the results must be sent to CMS and posted on the state’s website within 30 days of that submission. 

States are required to comply with this these secret shopper requirements no later than the first managed care rating period beginning on or after July 10, 2028. 

 Annual Enrollee Experience Surveys 

Surveys are already a staple of managed care oversight through established surveys such as the Consumer Assessment of Healthcare Providers and Systems (CAHPS), National Core Indicators-Aging and Disabilities (NCI– AD) Adult Consumer Survey, and the National Core Indicators— Intellectual and Developmental Disabilities (NCI–I/DD). These surveys provide key data to states when monitoring the effectiveness of managed care programs’ success at meeting their enrollees’ needs.  

CMS is amending the federal requirement to collect survey data in two ways. The first is to emphasize the importance of monitoring the “enrollee experience” and adding this phrase to bring attention to that aspect of survey results. Second, requiring surveys that include enrollee experience be conducted at least yearly to ensure that states have enrollee experience data to include in monitoring activities and performance improvement plans. These surveys address access issues in addition to performance on quality measures. 

The surveys must be: 

• • • Easy to understand; 
    • Simple to complete; 
    • Readily accessible for all enrollees that receive them; and 
    • Meet the interpretation, translation, and tagline criteria in 42 CFR §438.10(d)(2).  

States are required to comply with this provision no later than the first managed care rating period beginning on or after July 9, 2027. 

Additionally, to aid in the ability of CHIP beneficiaries to engage in informed selection of plans, states will be required to post comparative summary results of CAHPS surveys by managed care plan annually on state websites as described at 42 CFR §438.10(c)(3). The posted summary results must be updated annually and allow for easy comparison between the managed care plans available to separate CHIP beneficiaries.  

States are required to comply with this provision beginning July 9, 2026. 

State Website Requirements

Quality Rating System 

To aid in the transparency of the quality of managed care plans and ease of beneficiary use of state Medicaid program options, CMS is requiring several standard resources be available on state Medicaid websites regarding the Medicaid and CHIP Quality Rating System (QRS). The websites and web links must be clear and easy to understand; reviewed for accuracy at least quarterly; available at no cost; and include information about obtaining oral interpretation in all languages and written translation in each prevalent non-English language, information about how to request auxiliary aids and services, and offer a toll-free and TTY/TDY telephone number. 

To comply with this provision, state Medicaid websites must house the following web content: 

• • • Information necessary for users to understand and navigate the contents of the QRS website display 
    • Information that allows beneficiaries to identify managed care plans available to them that align with their coverage needs and preferences 
    • Standardized information identified by CMS that allows users to compare available managed care plans and programs 
    • Information on quality ratings displayed in a manner that promotes beneficiary understanding of and trust in the ratings 
    • Information or hyperlinks directing users to resources on how and where to apply for Medicaid and enroll in a Medicaid or CHIP plan 

States are required to comply with this provision beginning July 9, 2024. States may apply for a one-year extension for select requirements in this section. 

States must also post the state calculated quality ratings of the CMS identified mandatory measures stratified by dual eligibility status, race and ethnicity, sex, age, rural/urban status, disability, language of the enrollee, or other factors specified by CMS using an interactive tool. 

States are required to comply with this provision by a date to be specified by CMS which will be no earlier than December 31, 2030. States may apply for a one-year extension of this requirement. 

Plan Network Information 

States with two or more MCOs must create a tool that can search which MCOs offer certain drugs and providers within a plan’s network when identified by the user. 

States are required to comply with this provision by a date to be specified by CMS which will be no earlier than December 31, 2030. States may apply for a one-year extension of this requirement. 

State Directed Payments

Many states leverage State Directed Payments (SDPs) to direct expenditures to providers by Medicaid managed care plans. Types of SDPs include value-based payments (VBP) tied to delivery system reform initiatives as well as fee schedule requirements, which set a minimum or maximum fee or a uniform rate increase.  

Final regulatory changes to SDPs are numerous and varied, accounting for over 100 pages of final rule. Final provisions relating to SDPs fall into three categories as outlined below; we have summarized several key initiatives within those categories. 

Administrative Ease 

CMS made several simplifications to the SDP process, to alleviate the burden on states. SDP revisions aimed at simplicity and administrative ease align closely with those proposed in April 2023 and include:  

• • • Allowing for SDPs which align reimbursement with 100% of Medicare rates without requiring CMS review and approval 
    • Streamlining VBP SDPs 
    • Allowing states to specify the frequency and amount of value-based SDPs  
    • Allowing states to recoup unspent funds  
    • Adding clarification relating to performance measurement 
    • Expanding SDPs to non-network providers 

Expansion to non-network providers and allowing Medicare-based SDPs without CMS review takes effect July 9, 2024. VBP-related changes span multiple effective dates.   

Program Integrity 

Program integrity was the largest area of SDP rulemaking. SDPs provide a tool for states to manage their Medicaid priorities and ensure access and quality of care. CMS aims to balance the flexibility enabled by SDPs with the managed care requirements for risk-based and actuarially-sound reimbursement. SDP requirements vary depending on the nature of the SDP; however, all SDPs must be tied to delivery of services under managed care arrangements and support the state’s managed care quality strategy.  

Several of the new rules related to program integrity include:  

• • • Eliminating “separate payment terms” which currently allow states to make payments to MCOs outside of capitated rates. According to the Notice of Proposed Rulemaking (NPRM), 41.5% of SDPs approved from May 2016 to March 2022 utilized separate payment terms. This rule change marks a significant shift from current SDP parameters and deviates from the NPRM which only “considered” and did not formally “propose” this change. Effective July 9, 2027 
    • Requiring attestation from providers participating in Provider Assessment (PA) programs confirming the absence of hold harmless arrangements to ensure that PA programs are redistributive and not uniformly advantageous. Effective January 1, 2028 
    • Establishing the Average Commercial Rate (ACR) as the maximum allowable payment for hospitals, nursing facilities and certain services rendered at academic medical centers. This rule codifies current practices and is not likely to alter existing Upper Payment Limit programs. Effective July 9, 2024 
    • Requiring payments to be linked to utilization during the rating period as opposed to using prior period encounters as the basis for initial payments and conducting a post-payment reconciliation. Effective July 9, 2027 
    • Requiring SDP Preprint forms to be submitted prior to the effective date of the SDP. Effective July 9, 2026 

Given the large number of program integrity initiatives, effective dates vary from July 9, 2024 to July 10, 2028 as outlined in each individual bullet above.  

Evaluation and Reporting 

Another area of focus for CMS is the evaluation and reporting tied to SDPs. This is an area where ongoing modifications have occurred with the release of a new Section 438.6(c) Preprint form in January 2021, followed more recently by the publication of approved Preprint forms on the CMS website.  

Key current SDP evaluation and reporting initiatives include:  

• • • Requiring states with SDP spending that exceeds 1.5% of managed care payments to post evaluation results publicly in addition to submitting them to CMS 
    • Requiring states to report on SDP expenditures in The Transformed Medicaid Statistical Information System (T-MSIS) one year following each rating period 

States are required to comply with evaluation results reporting July 9, 2024. T-MSIS reporting instructions dictate the timeline for SDP expenditure reporting.   

For more information about the Final Rule and implementation considerations, contact PCG’s subject matter experts at healthpolicynews@pcgus.com.  

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