HHS Issues New Medicaid Rules

On April 25, 2016, the Department of Health and Human Services (HHS) issued a final rule on managed care in Medicaid and the Children’s Health Insurance Program (CHIP). The rule, which is the first overhaul of Medicaid and CHIP managed care regulations in more than a decade, advances the Administration’s efforts to modernize the health care system to deliver better care, smarter spending, and healthier people.

The final rule has four key goals:

(1) Supporting states’ efforts to advance delivery system reform and improvements in quality of care for Medicaid and CHIP beneficiaries

The rules clarify states’ authority to enter into contracts that pay plans for quality or encourage participation in alternative payment models and other delivery system reform efforts.

(2) More consumer-friendly Medicaid health plan information

The rules require states to provide information such as the Medicaid handbook, plan provider directories, and other important enrollment information on one central website. It also supports providing enrollment assistance and counseling.

(3) New quality rating system

The rules would implement a quality star rating system for Medicaid Managed Care plans similar to the system currently used for Marketplace health insurance plans. This system will enable consumers to make choices based on plan quality. States and plans have 3 years to implement this provision.

(4) Steps to improving adequate health plan provider networks

States will be required to set time and distance standards for key provider types. Currently, whether to set such standards is completely up to the states. Requires plans to regularly update directories of doctors and hospitals. A 2014 investigation by the Department of Health and Human Services’ inspector general found that half the doctors listed in official insurer directories weren’t taking new Medicaid patients.

The provisions of the rule will be implemented in phases over the next three years, starting on July 1, 2017.