Medicaid managed care plans and the Children’s Health Insurance Program (CHIP) will be subject to new wait time standards and quality ratings requirements, the Centers for Medicare & Medicaid Services (CMS) revealed during a flurry of regulatory activity Monday.
The rule implements a maximum appointment wait time of 15 business days for primary care and 10 business days for mental health and substance use disorder services.
“That is groundbreaking,” Dan Tsai, deputy administrator and director of the Center for Medicaid and CHIP Services, said in a news briefing Tuesday. “We have never had an actual standard of access for managed care, which now is the predominant way in which individuals and rules and programs receive their care.”
States must now meet a host of new requirements, including conducting secret shopper surveys to validate compliance; submitting an annual payment analysis comparing rates as a proportion of Medicare’s payment rate and Medicaid state plan payment rates; and developing an annual enrollee experience survey, according to a CMS fact sheet.
Federal health officials said the rule would improve access and transparency for nearly three-fourths of Medicaid beneficiaries in a news briefing Tuesday.
CMS also changed medical loss ratio (MLR) requirements, calling for managed care plans to submit revenues and expenses for certain payments and mandating states to provide MLR ratios for each plan. Plans will likely need reevaluate their MLR reporting processes.
Medicaid In Lieu of Services (ILOS), an alternative service managed care organizations (MCOs) can provide, are also undergoing changes. ILOS do not need waiver approval and have traditionally been used for mobile crisis services and chiropractic treatment, but can be used for health-related social needs like housing instability and nutrition since January 2023.
“For a homeless person with severe diabetes who is sleeping on the streets, the chance to access secure housing is going to help more than prescribing insulin that they can’t store and can’t use,” Jocelyn Guyer, senior managing director with Manatt Health, said in a statement shared with Fierce Healthcare.
ILOS can now be used as a substitute for covered services or when an ILOS could be used to prevent future service.
The new rule allows ILOS to be approved through a Medicaid state plan or Medicaid section 1915(c) waivers.
Interest groups like America’s Essential Hospitals, the Federation of American Hospitals (FAH) and the American Hospital Association all said they appreciated CMS delaying enforcement of an attestation provision for provider and state directed payments until 2028, a provision they oppose.
“This additional time will allow providers to focus on caring for Medicaid enrollees 24/7 while the legal process challenging the agency’s authority to implement this provision plays out,” said Charlene MacDonald, FAH executive vice president of public affairs, in a statement. “Unfortunately, if fully implemented, this action could undermine access to critical services for our most vulnerable patients.”
Additionally, a state’s Medicaid and CHIP Quality Rating System will include information on eligibility, quality ratings and other factors to compare plans like drug formulary and provider networks.
State Medicaid agencies will face administrative, operational, and fiscal challenges in bringing their managed care contracts and agency operations into compliance with the new rule," said Leesa Allen, managing director of consulting firm Sellers Dorsey. "They may look to state legislatures for additional appropriations as necessary, and to MCOs, providers and other strategic partners to make required changes to policies, procedures and operations on the ground."
Reaction to Monday’s controversial nursing home final rule also continue to fly in, but some groups are more receptive to the changes than others.
Seniors interest group AARP supported the final rule and the staffing changes it will bring.
“It is shameful that nursing homes receiving taxpayer dollars through Medicaid and Medicare haven’t been required to provide quality care through specific minimum staffing standards until now,” said AARP Executive Vice President and Chief Advocacy and Engagement Officer Nancy LeaMond in a statement. “Far too many residents and families have experienced tragic consequences because of poorly staffed facilities.”
CMS echoed these thoughts, saying many workers are leaving the industry to find better conditions elsewhere. The agency also pushed back against the skilled nursing facility industry’s complaints.
“The current status quo is hard for us to accept,” said Jonathan Blum, principal deputy administrator and chief operating officer for CMS. “We have nursing homes that are closing due to … tremendously poor quality of care. The rules provisions are fully calibrated and carefully phased in.
“A key point we very much believe is these changes are very much affordable,” he added.
Global strategy firm Capstone said the final rule was “slightly more onerous” than the proposed rule because of CMS requiring Medicare- and Medicaid-funded facilities to have a total nurse staffing standard of 3.48 hours. However, it believes the final rule is overall better than expected for the skilled nursing facility industry.
A Medicaid fee-for-service final rule published yesterday requires at least 80% of Medicaid payments for home care services to go toward paying wages. States must also track home care services, waiting lists and create a rate-setting advisory group.
“We know that the quality of care is directly a function of being able to attract and retain a high quality workforce, and that is an incredibly important piece for both quality of care and fiscal stewardship of the program, as opposed to Medicaid dollars for rates being going to administrative overhead and profit,” said Tsai.
Because of the 80% requirement, some agencies may leave states with low Medicaid reimbursement rates, leading to consolidation but no improvement in care, according to a research note from financial services company William Blair. The firm is also predicting potential legal action that delays the rule’s implementation.
The final rule allows providers to subtract travel, training and safety costs from reimbursement, a modification from the proposed rule.
“Now that these rules are final, states will need to implement them through meaningful beneficiary engagement, data analysis and reporting, and a continuous quality improvement approach that uses those data to inform change,” said Joe Zickafoose, principal researcher for consultancy firm Mathematica, in a statement.