Medicaid Payment and Reimbursement

Jan. 21-25: Medicaid Policies in Focus

January 17, 2019 5:15 pm

Insurers and hospitals clashed over changes to Medicaid plans’ network adequacy requirements and quality measurement.

Jan. 17—As Congress’s primary Medicaid advisory body prepares to meet next week, hospitals and insurers are clashing over changes to the program’s managed care rules.

As providers and payers prepare for the Jan. 24-25 public meeting of the Medicaid and CHIP Payment and Access Commission (MACPAC), federal regulators are considering a series of changes to the program’s managed care rules.

In November, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule to revise the Medicaid managed care regulations. The last major revision to those regulations was finalized in 2016.

Instead of a wholesale revision of the 2016 rules, the proposed rule focused on changes to network adequacy, beneficiary protections, quality oversight, and payment rates and policies.

In commenting on the proposed rule, hospital and insurer advocates clashed on the changes affecting network adequacy and provider directories.

Specifically, CMS proposed replacing the time-and-distance standard, which was required as a means to establish minimum provider network adequacy, with less-defined, state-established “quantitative network adequacy standards.” CMS outlined several quantitative standards that states could use, such as  percentage of contracted providers accepting new patients, wait times for appointments, and provider-to-enrollee ratios.

The proposed change would give states needed flexibility, according to CMS.

But the American Hospital Association (AHA) said in comments submitted recently to CMS that the current exception process gives states any needed flexibility.

“As such, the AHA opposes CMS’s proposal to weaken the network adequacy standards by replacing the requirement that states establish time and distance standards with state-established quantitative network adequacy standards,” Ashley Thompson, senior vice president for public policy analysis and development at AHA, wrote in a letter to CMS.

In contrast, America’s Health Insurance Plans (AHIP) wrote in a recent letter to CMS that it “strongly supports this change.”

The proposed network flexibility will support innovations by states and managed care organizations (MCOs) in the use of telehealth and other emerging technological tools, the group wrote.

“We also strongly support CMS’s encouragement of stakeholder input in development of standards, possibly through use of a technical expert panel or advisory group,” AHIP wrote. “We believe that meaningful MCO involvement, combined with appropriate CMS guidance, is critical to ensure, among other things, that MCOs are able to implement those measures effectively.”

Feedback on Quality Measurement

In contrast, AHA supported CMS’s proposed changes to a planned quality rating system (QRS). The 2016 rules called for the creation of a QRS framework, which states could adopt. CMS is still working to finalize the framework, which states could forgo by establishing their own QRS with comparable information about plan performance.

The proposed rule would change the requirement that the information yielded through a QRS be substantially comparable from one state to the next, instead giving states greater flexibility to meet that standard while enabling meaningful comparison across states.

Although AHIP supported aligning a minimum set of measures while allowing states to specify additional measures to address particular areas of concern, it raised several issues with the proposal.

For instance, CMS would require states that choose their own QRS to obtain CMS approval only if requested by CMS. Instead, AHIP urged CMS to require all states to receive prior approval of proposed additional measures. 

“Advance CMS approval is necessary to ensure states are implementing useful and meaningful measures that align with CMS principles and minimize provider burden,” AHIP wrote.

Other Concerns About Provisions

Additional concerns raised by AHA included those related to Medicaid’s directed-payment policy, which is intended to allow states to improve provider payments or use performance-based payment approaches. CMS proposed several changes to streamline the approval process for directed-payment arrangements that are linked to the state’s plan-approved rates and to allow states more flexibility to experiment with new payment models.

AHA was concerned that some of the proposed changes could restrict states’ ability to use certain types of provider payments in directed-payment arrangements or could be used by states to restrict provider payment.

The hospital advocacy group was worried the change could lead to a proliferation of policies like one used in Massachusetts, where the directed-payment arrangement authority was used to tie hospital payments to a minimal percentage of the state plan fee-for-service rate.

“This state policy has resulted in restricting managed care organization (MCO) payments to hospitals, interfering with the ability of MCOs and hospitals to negotiate payment based on value and service, ultimately running counter to the original intent of directed provider payment arrangements,” Thompson wrote.

Separately, AHIP cited “serious concerns” with a proposal to partially reverse the 2016 rule’s requirement that states certify and obtain CMS approval of specific managed care rates within each rate cell, and the rule’s prohibition on the use of rate ranges. Instead, states would have the option to certify a range of capitation rates spanning up to 5 percent for each rate cell.

The proposal to return to rate ranges “harms the transparency and integrity of the rate setting process,” wrote AHIP.

Tuesday, Jan. 22

Conference call by the Centers for Medicare & Medicaid Services (CMS) titled “Clinical Diagnostic Laboratories to Collect and Report Private Payor Rates.” Learn more.

Webinar by the American Hospital Association (AHA) titled “Human Trafficking Response: Resources for Health Care Professionals.” Learn more.

Webinar by the National Association of Healthcare Revenue Integrity (NAHRI) titled “How to Enhance Your Revenue Integrity Career.”  Learn more.

Start of the submission period (through Feb. 19) for applications to participate in the redesigned Medicare Shared Savings Program (MSSP). Learn more.

Wednesday, Jan. 23

Webinar by CMS titled “HQRP: Achieving a Full Annual Payment Update.” Learn more.

Webinar by AHA titled “Helping Physicians Finish Faster—making more time for the things that matter most.” Learn more.

Meeting of the National Business Group on Health titled “Employers’ Summit on Health Care Costs & Solutions,” Washington, D.C. (through Jan. 24) Learn more.

Thursday, Jan. 24

Webinar by HFMA titled “Understanding the Medicare Shared Savings Program ‘Pathways to Success’ Final Rule.” Learn more.

Webinar by CMS titled “Comparative Billing Report (CBR) on Intensity-Modulated Radiation Therapy.” Learn more.

Webinar by AHA titled “Creating Health-Based Solutions Around Community Violence.” Learn more.

Webinar by the National Academy of Medicine titled “The Future of Health Services Research.” Learn more.

Meeting of the Bipartisan Policy Center titled “Integrating Clinical and Mental Health in the U.S.,” Washington, D.C. Learn more.

Meeting of the American Health Lawyers Association titled “Academic Medical Centers and Teaching Hospitals Institute,” Arlington, Va. (through Jan. 25). Learn more.

Friday, Jan. 25

Webinar by the National Institute for Health Care Management Foundation titled “Too Much Medicine: Addressing Inappropriate Care.” Learn more.

Comments due on a CMS proposed rule that would provide Medicare Advantage and Part D plans with more tools to negotiate lower drug prices. Learn more.


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