CMS Final Rule: Medicaid Managed Care The Medicaid Mega-Reg

CMS Final Rule: Medicaid Managed Care The Medicaid Mega-Reg FaegreBD Consulting For Delta Dental Plans Association and National Association of Dental Plans October 2016

1 st Major Medicaid Managed Care Reg in over 10 Years April 21, 2016: CMS issued final regulations to modernize and strengthen existing Medicaid managed care rules. Why now? Medicaid managed care enrollment increased from 29 million in 2007 to 55 million in 2014 Previous regulatory revision: 2002 Increasing numbers of chronic and complex conditions require increasing use of managed care Supports administration focus on delivery system reform Supports agency goal of harmonizing rules across Medicaid, Medicare and Marketplaces Any unauthorized review, use, disclosure or distribution is prohibited. 2

Medicaid Managed Care Enrollment Any unauthorized review, use, disclosure or distribution is prohibited. 3

Major Goals of CMS Medicaid Managed Care Revision: Align Medicaid and CHIP managed care requirements with other major health coverage programs, such as Medicare Advantage and Qualified Health Plans Enhance beneficiary experience Ensure appropriate beneficiary protections Promote quality of care Strengthen actuarial soundness and payment provisions to promote financial accountability and product stability Enhance policies related to program integrity Mega-Reg fun facts: The regulation is 1,425 pages and 421,374 words. It received 882 public comments. Any unauthorized review, use, disclosure or distribution is prohibited. 4

Who is impacted and when? MCO: managed care organization All provisions within the rule apply to MCOs PIHP: prepaid inpatient health plan Most provisions within the rule apply to PIHPs 1 PAHP: prepaid ambulatory health plan Most provisions within the rule apply to PAHPs 1 PCCM: primary care case management Only certain provisions apply to PCCMs The final rule will be implemented in phases over the next three years Some sections are already in effect For both MCOs with dental subcontractors and PAHP dental plans 1 Most provisions within the rule apply to MCOs, PIHPs, and PAHPs; however, provisions related to comprehensive risk contracts only apply to MCOs. Any unauthorized review, use, disclosure or distribution is prohibited. 5

Table of Contents Important s Beneficiary Protections slides 7-9 Appeals and Grievances slides 10-11 Access slides 12-13 Quality slides 14-16 Finance slides 17-19 Actuarial Soundness slide 20 Compliance and Oversight slide 21 Record Keeping and Reporting slide 22 Any unauthorized review, use, disclosure or distribution is prohibited. 6

Important s Beneficiary Protections 433.138 Identifying Liable Third Parties (pp 1) 438.10 Information Requirements (pp 13) 438.12 Provider Discrimination Prohibited (pp 14) 438.52 Choice of MCOs, PIHPs, PAHPs, PCCMS, and PCCM Entities (pp 15) State must identify paid claims that contain diagnosis codes indicative of trauma, or injury, poisoning, and other consequences of external causes, in order to determine the legal liability of third parties. State and Medicaid contractors must make various information publicly available on the plan s website, including the enrollee handbook, summary of benefits, and provider directories. In addition to race, color, and national origin, plans cannot discriminate on the bases of sex, sexual orientation, gender identity or disability. States that require Medicaid beneficiaries to enroll in an MCO, PIHP, PAHP, or PCCM must give those beneficiaries a choice of at least two plans. Any unauthorized review, use, disclosure or distribution is prohibited. 7

Important s Beneficiary Protections 438.56 Disenrollment Requirements and Limitations (except for 438.56(d)(2)(iv)) (pp 17) 438.58 Conflict of Interest Safeguards (pp 17) 438.62 Continued Services to Enrollees (pp 18) 438.71 Beneficiary Support System (pp 21) Defines when a beneficiary or plan may initiate a disenrollment, including for cause and without cause circumstances. States and plans are responsible for considering timeframes and appeals processes in disenrollment requests. State must have safeguards against conflict of interest on the part of State and local officers and employees and agents of the state who have responsibilities relating to the MCO, PIHP, or PAHP contracts or the enrollment process. State must have a continuity of care policy to ensure continued access to services during beneficiary transitions from FFS to a managed care plan, or from one managed care plan to another. States are expected to implement beneficiary support systems that are able to educate potential enrollees and enrollees on their enrollment opportunities and limitations. 438.100 Enrollee Rights (pp 21) States must ensure that plans have written policies regarding enrollee rights. Any unauthorized review, use, disclosure or distribution is prohibited. 8

Policy Implications Beneficiary Protections, cont d 438.102 Provider-Enrollee Communications (pp 22) Plans may not prohibit or restrict a provider from advising patients on his or her health status and treatment options or limit the enrollee s right to participate in decisions regarding his or her health care. 438.104 Marketing Activities (pp 22) Private plans must obtain state approval prior to distributing marketing materials. States are responsible for reviewing submitted marketing materials. 438.210 Coverage and Authorization of Services (pp 26) State must ensure that services supporting individuals who have ongoing or chronic conditions are authorized in a manner that reflects their ongoing needs for such services. 438.224 Confidentiality (pp 27) State must ensure that each MCO, PIHP, and PAHP uses and discloses medical records and any other identifying health and enrollment information in accordance with this rule. 438.404 Timely and Adequate Notice of Adverse benefit Determination (pp 34) The MCO, PIHP, or PAHP must give enrollees sufficient and timely notice of adverse benefit determination in writing that explains: 1.) the determination, 2.) the reasoning behind it, and 3.) the enrollee s right to file an appeal and how to file one. Any unauthorized review, use, disclosure or distribution is prohibited. 9

Important s Appeals and Grievances 438.228 Grievance and Appeal Systems (pp 27) 438.406 Handling of Grievances and Appeals (pp 34) 438.408 Resolution and Notifications: Grievances and Appeals (pp 35) 438.410 Expedited Resolution of Appeals (pp 35) 438.414 Information about Grievance System to Providers and Subcontractors (pp 35) State must ensure that each MCO, PIHP, and PAHP has a grievance system in effect that meets regulatory requirements. When handling grievances and appeals, each MCO, PIHP, and PAHP must give enrollees reasonable assistance in completing forms and taking other procedural steps. Each plan must dispose of each grievance and resolve each appeal as quickly as the enrollee s health condition requires. Each MCO, PIHP, and PAHP must establish and maintain an expedited review process for appeals. The MCO, PIHP and PAHP must give providers and subcontractors a description of the grievance, appeal and fair hearing procedures at the time they enter into a contract with the plan. Any unauthorized review, use, disclosure or distribution is prohibited. 10

Important s Appeals and Grievances, cont d 438.420 Continuation of Benefits while the MCO, PIHP, or PAHP, Appeal and the State Fair Hearing are Pending (pp 36) 438.424 Effectuation of Reversed Appeal Resolutions (pp 36) Managed care enrollees may continue to have services ordered by an authorized provider during appeals of denials. Plans must authorize or provide disputed services no later than 72 hours from a notice reversing a determination. States must pay providers for services provided while an appeal is pending if the final decision favors the plan s initial denial. Any unauthorized review, use, disclosure or distribution is prohibited. 11

Important s Access 438.3(l) Choice of Network Provider (pp 3) 438.14 Requirements that Apply to Managed Care Contracts Involving Indians, IHCPs, and IMCEs (pp 15) 438.68 Network Adequacy Standards (pp 20) 438.114 Emergency and Post- Stabilization Services (pp 23) All contracts must allow each enrollee to choose one s own provider to the extent appropriate (i.e., the provider network). State contracts with MCOs, PIHPs, PAHPs, and PCCM entities that enroll Indians must have sufficient Indian health care providers (IHCPs) in their network. States must create quantitative network adequacy standards for MCO provider networks, including time and distance maximums to ensure providers are not too far from members. MCOs and certain PAHPs are responsible for emergency and post-stabilization services when an enrollee is referred to seek emergency services. 438.206 Availability of Services (pp 24) Plans must maintain sufficient provider networks that provide adequate access to all enrollees. Any unauthorized review, use, disclosure or distribution is prohibited. 12

Important s Access, cont d 438.207 Assurance of Adequate Capacity and Services (pp 25) 440.262 Access and Cultural Consideration (pp 41) States must ensure that each plan gives assurance to the state and provides supporting evidence that the plan has the capacity to serve its expected enrollment and service area. State must consider the ability of network providers to provide culturally competent communication to limited English proficiency enrollees in their preferred language and ensure reasonable accommodations for enrollees with disabilities. Any unauthorized review, use, disclosure or distribution is prohibited. 13

Important s - Quality 438.66(a)-(d) State Monitoring Requirements; Readiness Reviews (pp 19) 438.208 Coordination and Continuity of Care (pp 25) Each state Medicaid agency must have a monitoring system for all managed care programs. Sets standards for transition plans when the beneficiary changes to a new plan. 438.214 Provider Selection (pp 26) Each state must establish a uniform credentialing policy. 438.236 Practice Guidelines (pp 28) Plans must adopt practice guidelines that are based on clinical evidence and adopted in consultation with contracting providers. 438.310 Subpart E; Basis; Scope and Applicability (pp 29) 438.330 Quality Assessment and Performance Improvement Program (pp 30) States must require plans to implement and maintain various quality measurement and improvement activities. Establishes new standards for the Quality Assessment and Performance Improvement (QAPI) program and incorporates PAHPs into the QAPI program. Any unauthorized review, use, disclosure or distribution is prohibited. 14

Important s Quality, cont d 438.332 State Review of the Accreditation Status of MCOs, PIHPs, PAHPs (pp 30) 438.334 Medicaid Quality Rating System (pp 30) 438.350 External Quality Review (pp 31) 438.354 Qualifications of External Quality Review Organizations (pp 32) 438.356 State Contract Options for External Quality Review (pp 32) State will review and approve MCO, PIHP, PAHP accreditation at least once every 3 years in accordance with standards at least as strict as those used by CMS for MA/marketplace programs. State must operate a MMC QRS and generate plan public-facing ratings annually. EQR must report on MCOs based on validated performance measurement data associated with Performance Improvement Projects (PIPs) from the preceding 12 months. Plans must meet baseline competence and independence standards to qualify as an EQRO. States that contract with MCOs, PIHPs, PAHPs, and PCCM entities must ensure that a qualified external quality review organization (EQRO) performs an annual external quality review for each plan. Any unauthorized review, use, disclosure or distribution is prohibited. 15

Important s Quality, cont d 438.358 Activities Related to External Quality Review (pp 32) 438.602(b) Screening and Enrollment and Revalidation of Providers (pp 37) 438.608(a)-(d) Program Integrity Requirements Under the Contract (pp 37) 438.362 Exemption from External Quality Review (pp 33) CMS must develop protocols for the required EQRs which specify the data to be gathered through EQR-related activities, steps and methods for data collection and analysis. States must screen, enroll, and periodically revalidate all network providers of plans. MCOs and PAHPs must establish Fraud/Waste/Abuse detection programs. States may exempt an MCO from EQR under certain conditions specified in the reg. Any unauthorized review, use, disclosure or distribution is prohibited. 16

Important s Finance 438.3(c) Payment (pp 1) 438.3(e) Services that may be covered by an MCO, PIHP, or PAHP (pp 1) 438.3(g) Provider-preventable condition requirements (pp 2) 438.3(h) Inspection and Audit of Records and Access to Facilities (pp 2) 438.3(m) Audited Financial Reports (pp 3) 438.3(t) Requirements for MCOs, PIHPs, or PAHPs responsible for coordinating benefits for dually eligible individuals (pp 4) The final capitation rates for each MCO, PIHP, or PAHP must be specifically identified in the applicable contract submitted to CMS for review and approval. Services that are in addition to those in the Medicaid-state plan may not be included in the capitation rate. All contracts with MCOs, PIHPs, and PAHPs, must comply with the requirements mandating identification of provider-preventable conditions as a condition of payment. State auditors must have access to the facilities and equipment of subcontractors of Medicaid MCOs and PAHPs. MCOs and PAHPs must submit audited financial reports to State on an annual basis. In states that enter into a Coordination of Benefits Agreement with Medicare for FFS, an MCO, PIHP, or PAHP contract that is responsible for coordinating dually eligible individuals benefits must require that plan to enter into a Coordination of Benefits Agreement with Medicare and participate in the automated claims crossover process. Any unauthorized review, use, disclosure or distribution is prohibited. 17

Important s Finance, cont d 438.6(b)(1) Special Contract s Related to Payment Basic Requirements (pp 9) 438.6(b)(2) Special Contract s Related to Payment Incentive Arrangements (pp 9) 438.6(b)(3) Withhold Arrangements (pp 9) 438.7 Rate Certification Submission (pp 10) 438.8 Medical Loss Ratio Standards (pp 12) All applicable risk-sharing mechanisms between the MCO, PIHP, or PAHP and the State, such as reinsurance, risk corridors, or stop-loss limits, must be described in the contract. Contracts with incentive arrangements may not provide for payment in excess of 105 percent for the approved capitation payments attributable to the enrollees or services covered by the incentive arrangement. Payments earned by managed care plans under a withhold arrangement should be accounted for in premium revenue for purposes of the MLR calculation. Capitated rates must be specific to each rate cell and state must certify a specific rate, rather than a rate range, for each rate cell. Plans must calculate and report their MLR to the state annually. The rule establishes a minimum MLR standard of 85% for MCOs, PIHPs, and PAHPs. If the MLR does not meet the minimum standard, a MCO, PIHP, or PAHP must provide a remittance to the state for that reporting year. Any unauthorized review, use, disclosure or distribution is prohibited. 18

Important s Finance, cont d 438.60 Prohibition of Additional Payments for Services Covered under MCO, PHIP, or PAHP Contracts (pp 18) State must ensure that network providers are not paid by an entity other than the MCO, PIHP, or PAHP for services covered under the contract between the state and the plan. 438.106 Liability for Payment (pp 23) Each MCO, PIHP, and PAHP must provide that its Medicaid enrollees are not held liable in the event of a plan s insolvency. 438.108 Cost Sharing (pp 23) The plan s contract with the state must provide that all cost sharing is in accordance with the limits set forth in the federal rules. 438.230 Subcontractual Relationships and Delegation (28) 438.802 Subpart J; Basic Requirements (pp 40) The MCO, PIHP and PAHP must maintain responsibility for any functions performed by a subcontractor. All subcontracts must be in writing. All subcontractors must comply with government Medicaid laws and participate in government audits. Federal Medicaid payments are only available in expenditures for payments under an MCO contract while the Medicaid contract is in effect and the Medicaid plan meets regulatory requirements. 438.806 Prior Approval (pp 40) CMS has the right to withhold payment from MCOs and comprehensive risk contracts unless CMS has offered prior approval to these contracts. Any unauthorized review, use, disclosure or distribution is prohibited. 19

Important s Actuarial Soundness 438.4(a) Actuarial Soundness; Actuarially sound capitation rates defined 438.4(b)(1) and 438.4(b)(2) Actuarial Soundness Review 438.4(b)(5)-(7) CMS Review and Approval 438.4(b)(8) and 437.4(b)(9) Actuarial Soundness 438.5(a)-(f) Rate Development Standards 438.5(g) Rate Development Standards Risk Adjustment 438.6(c) Deliver System and Provider Payment Initiatives Under MCO, PIHP, or PAHP Contracts Actuarially sound rates are those that are projected to provide for all reasonable, appropriate, and attainable costs. State determination of actuarial soundness must be in accordance with generally accepted actuarial principles. Capitation rates may not be based on payments associated with cross-subsidizing. Payments must not cross-subsidize; state actuarial soundness review may include risk-sharing mechanisms, incentive arrangements, withhold arrangements, and delivery system and provider incentive payments. Actuarially sound capitation rates must be developed so that plans can achieve a minimum MLR of at least 85 percent. When establishing Medicaid managed care capitation rates, states must follow a six-step process outlined by CMS. Risk adjustment must be budget neutral and can include adjustment based on non-clinical socio-economic factors. Plans final capitation rates must be specifically identified in the applicable contract submitted for CMS review. Any unauthorized review, use, disclosure or distribution is prohibited. 20

Important s Compliance and Oversight 438.610 Prohibited Affiliations (pp 38) Medicaid plans may not knowingly have a relationship with a person banned from participating in federal programs. State must report noncompliance to DHHS Secretary and cannot renew plan s contract without Secretary approval. 438.808 Exclusion of Entities (pp 40) Medicaid-contracted entities must exclude any entities ineligible to receive federal payment, such as those convicted of crimes. 438.708 Termination of an MCO, PCCM, or PCCM Entity Contract (pp 38) 438.710 Notice of Sanction and pre- Termination Hearing (pp 38) 438.722 Disenrollment During Termination Hearing Process (pp 39) 438.730 Sanction by CMS: Special Rules for MCOs (pp 39) State has the authority to terminate contracts and enroll the entity s enrollees in other plans if the state determines that plan has failed to carry out terms of its contract. Before imposing intermediate sanctions, state must give the affected entity timely written notice that explains the basis of the sanction and the entity s appeal rights. After a state notifies an MCO, PCCM, or PCCM entity that it intends to terminate the contract, the state may give the entity s enrollees written notice of the state s intent or allow enrollees to disenroll immediately without cause. If a state determines an MCO acted in a manner that merits a sanction, the state may recommend that CMS impose a denial of payment sanction for that MCO. Any unauthorized review, use, disclosure or distribution is prohibited. 21

Important s Recordkeeping and Reporting 438.3(u) Recordkeeping Requirements (pp 4) 438.66(e) Annual Program Report (pp 20) 438.242 Health Information Systems (pp 28) 438.818 Enrollee Encounter Data (pp 41) Plans must retain at least 10 years of data, including enrollee grievance and appeals records, base data, and MLR reports. States must publish an annual report assessing each managed care program on the following areas: financial performance, encounter data, enrollment and service area, and modifications to benefits covered. States must ensure that plans maintain a health information system that collects, analyzes, and integrates reports data related to utilization, claims, grievances and appeals, and disenrollments. The state must validate and conduct quality assurance on plan encounter data submissions. States must require plans to submit encounter data that meet specified form and content standards and criteria for accuracy and completeness. Any unauthorized review, use, disclosure or distribution is prohibited. 22

Implementing the Mega-Reg: What Comes Next? s of the Mega-Reg become effective between now and 2018 Faegre hired to provide a summary table of the regulation as it impacts dental plans The Focus Shifts to the States Mega-Reg sets a federal floor ; states can be at that floor or above it Will issue conforming regulations, amend procurements and contracts Medicaid experimentation continues 1115 Waivers, CMMI Models, Value-based payment systems But don t forget about CMS Harmonization across programs Greater Medicaid-Marketplace linkages; continued focus on Duals Marketplace SADP quality measures could become Medicaid model Any unauthorized review, use, disclosure or distribution is prohibited. 23

To follow up, the Faegre team includes: Mike Adelberg, Sr. Director Amy Strati, Counsel 15 years at CMS, including senior mgt. positions in the Medicaid, Medicare and Marketplace programs; 3 years as VP at a health insurer Phone: 202-312-7464; Email: michael.adelberg@faegrebd.com Insurance Regulatory Attorney focused on Health Insurance Issuers; Former Chief Counsel and Acting Commissioner for a Dept. of Insurance Phone: 317-237-1457; Email: amy.strati@faegrebd.com Samantha Strong, Advisor Policy analyst focused on Medicaid, Medicare, and Marketplace programs Phone: 202-312-7400; Email: samantha.strong@faegrebd.com Any unauthorized review, use, disclosure or distribution is prohibited. 24