It's not yet clear whether the CMS' sweeping proposed rule governing Medicaid managed care will resolve the coverage and access problems facing the growing number of low-income adults and children enrolled in private Medicaid plans. But it's likely that there will be political jockeying over many of its provisions.
Health plans, state Medicaid officials, consumer groups and policy experts are poring through the 653-page rule released last week, which would create the biggest changes in Medicaid managed-care regulations in more than a decade. It would cap insurer profits, require states to more rigorously supervise the adequacy of plans' provider networks, encourage states to establish quality rating systems for plans, allow more behavioral healthcare in institutional settings and encourage the growth of managed long-term care. A fight looms over the rule's limits on how much plans can allocate for administration and profits. Public comments are due by July 27.
Thirty-nine states and the District of Columbia outsource their Medicaid programs by paying fixed, monthly sums to private managed-care plans, yielding $115 billion in revenue for insurers and $2.4 billion in operating profits last year, according to data compiled by Mark Farrah Associates and analyzed by Kaiser Health News. About 46 million people, or 73% of all regular Medicaid beneficiaries, are in managed-care plans, and that figure will continue to rise through the Affordable Care Act's expansion of Medicaid to low-income adults, according to consulting firm Avalere Health. Millions of kids in the Children's Health Insurance Program also are in managed care and would be covered by the proposed rule.
States have turned to Medicaid managed-care plans hoping to reduce costs and get more budget predictability. Insurers, however, have faced criticism for offering inadequate provider networks and denying needed care to pad their bottom lines. Because of the wide variations in how states run their Medicaid managed-care programs, there have been “inconsistencies” and “less-than-optimal results,” the CMS said. Some experts have questioned whether contracting out Medicaid to private plans has really saved states money.
Last year, HHS' Office of the Inspector General reported that states were not enforcing their own rules to ensure Medicaid patients had enough providers to care for them. One managed-care enrollee reportedly had no access to an in-network urologist within 75 miles, and the health plan did not explain how the patient could receive care, the OIG found.
Rules for maintaining adequate provider networks were included in last week's proposed rule. But the CMS mostly punted the task to states, despite the states' previous lackluster enforcement. “The state has the primary responsibility for administering and monitoring the Medicaid managed-care program,” the CMS said. It's unclear how financially strapped state Medicaid programs will respond.