What Significant Changes Will CMS Medicaid Managed Care Rule Bring?

May 1, 2024
Gary Jessee, senior vice president, national consulting at Sellers Dorsey, says a number of components in the rule are a big lift for states and managed care organizations

The Centers for Medicare & Medicaid Services recently published a final rule that has big implications about quality measurement and transparency in Medicaid managed care. Gary Jessee, senior vice president, national consulting at Sellers Dorsey, shared some thoughts with Healthcare Innovation about the potential impact. 

Healthcare Innovation: Before we dive into a discussion of this new rule, could you talk about your background and your role at consulting firm Sellers Dorsey?

Jessee: I run our national consulting practice and our consulting with state Medicaid programs, managed care organizations, long-term care providers, and solution partners. I'm a former Medicaid director and former commissioner in Texas. I led health and human service programs and worked in state government for about 23 years. 

HCI: CMS just came out with this final rule on Medicaid managed care and CHIP that addresses access, finance and quality issues. Does this represent a big change in terms of the amount of regulation of access and quality of Medicaid managed care happening at the federal level versus at the state level? 

Jessee: If you look at the data, between 72 percent and 75 percent of Medicaid lives are supported within a managed care structure. While states have been maturing their managed care service delivery systems for decades, what we're seeing is our federal partners really providing additional clarity and expectations around how those systems should be operated. I would say state regulatory systems have always focused on access. The only way you achieve health outcomes for members is by having qualified providers and ensuring they get the right care at the right time. So I think what you're seeing is some codification and a hope to have a consistent approach around how people's experience should be supported across the country.

HCI: Let’s dive into a few specifics. For one thing, the rule establishes maximum appointment wait time standards, right?

Jessee: Appointment wait times have long been a principle of managed care. You want people to access care exactly when they need it. But we know with some specialty care providers, there's a limitation in terms of how many there are and how long it might take to get into one. Adopting these requirements around wait times is really a nod by our federal partners that they recognize that this has been a problem and that they recognize that there should be a limit to how long somebody should have to wait to get to see a provider.

HCI: I saw a statement from the Association for Community Health Plans that said they applauded a lot of the things that were in the rule but expressed concern that plans operating in certain areas with provider shortages are still going to struggle to comply with this aspect. 

Jessee: I agree. We don't decide where people live, and we can't create physicians. So if you're in a rural area, and there is not a psychiatrist within 60 miles that is seeing Medicaid patients, it's not like a plan can ship a psychiatrist to a street near us. But network adequacy is something that is taken very, very serious by states and by plans.

HCI: Does the rule also establish a new framework for a Medicaid managed care quality rating system that includes some mandatory measures, and is that and kind of a big deal?

Jessee: I would say that in general we applaud CMS for really taking a position on lots of these key areas. I'm not trying to be negative in any way, but there are a number of components in this rule that are a big lift for states and they're a big lift for managed care organizations. As it relates to quality, when you talk about 16 measures that are now mandatory reporting, it can be an additional challenge for providers. CMS is adopting some measures that they want to be able to compare across the country and even by plan. It's a great thing. One of the goals around these rules is focused on transparency — transparency for members, and for regulatory bodies, like states and federal partners. I do think that having consistency in measures is a big deal. Lots of states have quality measures tied to contracts, and it doesn't mean that states won't have other measures that are important to them. But I do think that consistency and comparability are really important. 

HCI: Are there also changes as far as member engagement, involving Medicaid advisory committees? 

Jessee: Medicaid programs have long been engaged in seeking feedback from stakeholders and providers, so this notion of Medicaid advisory committees is not new. The voice of the consumer is perhaps the most important aspect of how to ensure your programs are meeting their needs. I would say a lot of this is not new. It's business as usual, but I think our federal partners mandating expectations around it just ensures that it perhaps gets a little more robust or just codifies what that expectation is.

HCI: Were there some changes in this rule about payment for home and community-based services?

Jessee: We're seeing what everybody's referring to as the 80/20 rule. And that says that in providing these types of supports, 80 percent of the money should go to direct care, to worker pay. Many states have already been strategizing around this to address the workforce shortage. The other thing that you see in this rule is additional transparency for states to be able to publicly report what those rates look like across those services. Although today the rates aren't hidden. If you want to know what states are paying, you can find it very easily. But the goal is for that information to be readily available, and for you to be able to compare what those rates look like. 

When this rule was proposed, there was a lot of pushback in the comments from providers in this space. If they were on the call with us, they would probably say that they want direct workforce people to get more money. But managing all of these components, we've not had any increase in our administrative rates and forcing us to pass through 80 percent of the reimbursement might create a hardship. CMS acknowledged that and they created a hardship provision in this rule. 

HCI: Anything else in the rule you would want to highlight?

Jessee: I think “in lieu of services” innovation is one of the most exciting parts. CMS said we're seeing innovation in service delivery systems. We know everybody does not access care the same way and it gave states an opportunity to allow MCOs to provide other services. 

We've seen an explosion in nutrition support to address food insecurities; we’ve seen an explosion in the need to provide supportive housing, because we know that lots of individuals who are homeless or have severe persistent mental illness, their biggest risk is housing. You cannot provide adequate care for somebody if they can't even keep up with whose couch they're sleeping on. So while all states aren't doing this, it provides a pathway for states to have that flexibility and what it does is codified in lieu of service requirements, and then provides specific direction around how those services and costs get reflected in the managed care reporting. It's like we have a whole mature grown-up process now around “in lieu of.” When I talk to Medicaid directors across the country, they are really excited about the opportunity to not create a one-size-fits-all-model of care.



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