Medicaid managed care rule: Health plans, state directors cautiously optimistic

Medicaid directors and health plans have mixed feelings about the newly finalized federal regulations for Medicaid managed care plans.

For its part, the National Association of Medicaid Directors is encouraged by the fact that the government included some of its recommendations when crafting the final rule, NAMD Executive Director Matt Salo said in a statement from the group.

NAMD is "very pleased" that the final rule eschewed a proposal that would have required some new managed care beneficiaries to enroll in a fee-for-service system for 14 days before being transferred to a managed care plan. "Such a policy would have needlessly delayed access to service delivery and critical care coordination efforts for beneficiaries in many states," Salo says.

The directors also appreciate that the final rule sets forth a lengthy and staggered phase-in process. Yet Salo also points out that implementing the new regulations will demand significant analysis, dedicated staff time, contract amendments and other programmatic changes. Therefore, states request that the rule implementation and approval process not interfere with regular Medicaid program operations, he says.

Jeff Myers, president of Medicaid Health Plans of America, is also happy that federal health officials decided to scrap the 14-day rule, he tells Inside Health Policy. Yet he is less enthused about the inclusion of an 85 percent medical loss ratio for Medicaid and Children's Health Insurance Program managed care plans, saying that the mandate could have unintended consequences and that it's a "mistake" to require states retrieve funds from plans that don't meet the threshold.

Both Salo and Myers, though, seem generally in favor of the concept of updating Medicaid managed care regulations, which have not seen a facelift in more than a decade. Myers has previously praised some of the proposed rule's provisions, such as requiring states to monitor plans' network adequacy, and Salo notes that "there is a clear need to revise the existing regulatory framework to better reflect the dynamic nature of Medicaid managed care programs."

To learn more:
- read the NAMD statement
- here's the Inside Health Policy article (subscription required)

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