California Healthline Daily Edition

Summaries of health policy coverage from major news organizations

Stakeholders Note Few Changes in Medicaid Managed Care Final Rule

CMS' final rule on 2016 reimbursement rates for Medicaid managed care plans incorporated little stakeholder feedback and could leave state Medicaid agencies struggling with budget issues, Modern Healthcare reports.

According to Modern Healthcare, a comparison with the final rule and the draft rule shows only "slight modifications in wording and some added clarifying language" (Dickson, Modern Healthcare, 9/25).


The rule aims to create more standardized practices across states and align managed care standards with those of the private market. It marks the first update to Medicaid managed care rules in more than a decade.

The rule calls for specific medical-loss ratios, standards to ensure access for beneficiaries and guidance on long-term care.

The rule also seeks greater transparency in how states determine plan payment rates. States are required to give CMS enough information for the agency to understand the data and the reasoning for the rate (California Healthline, 5/28). In addition, a state must provide a letter from a certifying actuary explaining how reimbursement rates were determined and affirming that the rates are sustainable.


According to Modern Healthcare, concerns expressed in June by the National Association of Medicaid Directors were not addressed in the final rule. In a letter, the group called for CMS to set clear timelines for rate reviews and approvals to give states financial certainty and avoid delays.

Such delays "can span years and can adversely impact contract approvals and modifications, waiver extensions and performance measurement," NAMD wrote at the time, adding, "The guide fails to remedy this longstanding concern, and could ultimately further delay approvals with excessive, unnecessary levels of detail required."

"Not much in the final has changed from the draft, so our comments on that remain unchanged," NAMD Executive Director Matt Salo said.

Another point brought up in NAMD's June letter that CMS did not address in the final rule is the amount of required documentation, Modern Healthcare reports.

Meg Murray, CEO of the Association for Community Affiliated Plans, said, "We recommend CMS require states to disclose, in a timely manner, sufficient information to permit plans to replicate the rate-setting methodology and underlying assumptions, and to establish an appeals process for plans related to actuarial soundness."

Similarly, a Medicaid Health Plans of America spokesperson said, "We remain concerned that Medicaid MCOs will continue to face barriers in receiving the materials necessary to verify that rates are actuarially sound, and that the terms of the contract are sustainable, prior to contracts being signed"  (Modern Healthcare, 9/25).

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