Proposed Rule2023-08961
Medicaid Program; Medicaid and Children's Health Insurance Program (CHIP) Managed Care Access, Finance, and Quality
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Published
May 3, 2023
Issuing agencies
Health and Human Services DepartmentCenters for Medicare & Medicaid Services
Abstract
This proposed rule would advance CMS' efforts to improve access to care, quality and health outcomes, and better address health equity issues for Medicaid and Children's Health Insurance Program (CHIP) managed care enrollees. The proposed rule would specifically address standards for timely access to care and States' monitoring and enforcement efforts, reduce burden for some State directed payments and certain quality reporting requirements, add new standards that would apply when States use in lieu of services and settings (ILOSs) to promote effective utilization and specify the scope and nature of ILOS, specify medical loss ratio (MLR) requirements, and establish a quality rating system for Medicaid and CHIP managed care plans.
Full Text
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<title>Federal Register, Volume 88 Issue 85 (Wednesday, May 3, 2023)</title>
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[Federal Register Volume 88, Number 85 (Wednesday, May 3, 2023)]
[Proposed Rules]
[Pages 28092-28252]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-08961]
[[Page 28091]]
Vol. 88
Wednesday,
No. 85
May 3, 2023
Part III
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Parts 430, 438, and 457
Medicaid Program; Medicaid and Children's Health Insurance Program
(CHIP) Managed Care Access, Finance, and Quality; Proposed Rule
Federal Register / Vol. 88, No. 85 / Wednesday, May 3, 2023 /
Proposed Rules
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Parts 430, 438, and 457
[CMS-2439-P]
RIN 0938-AU99
Medicaid Program; Medicaid and Children's Health Insurance
Program (CHIP) Managed Care Access, Finance, and Quality
AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of
Health and Human Services (HHS).
ACTION: Proposed rule.
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SUMMARY: This proposed rule would advance CMS' efforts to improve
access to care, quality and health outcomes, and better address health
equity issues for Medicaid and Children's Health Insurance Program
(CHIP) managed care enrollees. The proposed rule would specifically
address standards for timely access to care and States' monitoring and
enforcement efforts, reduce burden for some State directed payments and
certain quality reporting requirements, add new standards that would
apply when States use in lieu of services and settings (ILOSs) to
promote effective utilization and specify the scope and nature of ILOS,
specify medical loss ratio (MLR) requirements, and establish a quality
rating system for Medicaid and CHIP managed care plans.
DATES: To be assured consideration, comments must be received at one of
the addresses provided below, by July 3, 2023.
ADDRESSES: In commenting, please refer to file code CMS-2439-P.
Comments, including mass comment submissions, must be submitted in
one of the following three ways (please choose only one of the ways
listed):
1. Electronically. You may submit electronic comments on this
regulation to <a href="http://www.regulations.gov">http://www.regulations.gov</a>. Follow the ``Submit a
comment'' instructions.
2. By regular mail. You may mail written comments to the following
address ONLY: Centers for Medicare & Medicaid Services, Department of
Health and Human Services, Attention: CMS-2439-P, P.O. Box 8016,
Baltimore, MD 21244-8016.
Please allow sufficient time for mailed comments to be received
before the close of the comment period.
3. By express or overnight mail. You may send written comments to
the following address ONLY: Centers for Medicare & Medicaid Services,
Department of Health and Human Services, Attention: CMS-2439-P, Mail
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
For information on viewing public comments, see the beginning of
the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
John Giles, (410) 786-5545, Medicaid Managed Care.
Laura Snyder, (410) 786-3198, Medicaid Managed Care State Directed
Payments.
Tara Caulder, (410) 786-8252, Medicaid Managed Care State Directed
Payments Value-Based Initiatives and Evaluation.
Alex Loizias, (410) 786-2435, Medicaid Managed Care State Directed
Payments Contract Requirements.
Andrew Wilson, (410) 786-8515, Medicaid Managed Care State Directed
Payments Medicare Fee Schedules and Appeals Process.
Carlye Burd, (720) 853-2780, Medicaid Managed Care Quality.
Amanda Paige Burns, (410) 786-8030, Medicaid Quality Rating System.
Joshua Bougie, (410) 786-8117, CHIP.
SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments
received before the close of the comment period are available for
viewing by the public, including any personally identifiable or
confidential business information that is included in a comment. We
post all comments received before the close of the comment period on
the following website as soon as possible after they have been
received: <a href="http://www.regulations.gov">http://www.regulations.gov</a>. Follow the search instructions on
that website to view public comments. CMS will not post on
<a href="http://Regulations.gov">Regulations.gov</a> public comments that make threats to individuals or
institutions or suggest that the individual will take actions to harm
the individual. CMS continues to encourage individuals not to submit
duplicative comments. We will post acceptable comments from multiple
unique commenters even if the content is identical or nearly identical
to other comments.
Table of Contents
I. Medicaid and CHIP Managed Care
A. Background
B. Provisions of the Proposed Regulations
1. Access
2. State Directed Payments
3. Medical Loss Ratio (MLR) Standards
4. In Lieu of Services and Settings (ILOS)
5. Quality Assessment and Performance Improvement Program, State
Quality Strategies and External Quality Review
6. Quality Improvement--Quality Rating System
II. Collection of Information Requirements
III. Regulatory Impact Analysis
IV. Response to Comments
V. Regulation Text
Applicability and Complicace Timeframes
CMS proposes that the proposed new requirements would be
applicable, and therefore, States required to comply by the effective
date of the final rule or as otherwise specified in regulatory text.
I. Medicaid and CHIP Managed Care
A. Background
As of September 2022, the Medicaid program provided essential
health care coverage to more than 83 million \1\ individuals, and, in
2020, had annual outlays of more than $671 billion. In 2021, the
Medicaid program accounted for 17 percent of national health
expenditures.\2\ The program covers a broad array of health benefits
and services critical to underserved populations, including low-income
adults, children, parents, pregnant individuals, the elderly, and
people with disabilities. For example, Medicaid pays for approximately
42 percent of all births in the U.S.\3\ and is the largest payer of
long-term services and supports (LTSS),\4\ services to treat substance
use disorder, and services to prevent and treat the Human
Immunodeficiency Virus.\5\
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\1\ September 2022 Medicaid and CHIP Enrollment Snapshot.
Accessed at <a href="https://www.medicaid.gov/medicaid/national-medicaid-chip-program-information/downloads/september-2022-medicaid-chip-enrollment-trend-snapshot.pdf">https://www.medicaid.gov/medicaid/national-medicaid-chip-program-information/downloads/september-2022-medicaid-chip-enrollment-trend-snapshot.pdf</a>.
\2\ CMS National Health Expenditure Accounts. National Health
Expenditures 2021 Highlights. Accessed at <a href="https://www.cms.gov/files/document/highlights.pdf">https://www.cms.gov/files/document/highlights.pdf</a>.
\3\ National Center for Health Statistics. Key Birth Statistics
(2020 Data. Final 2022 Data forthcoming). Accessed at <a href="https://www.cdc.gov/nchs/nvss/births.htm">https://www.cdc.gov/nchs/nvss/births.htm</a>.
\4\ Colello, Kirsten J. Who Pays for Long-Term Services and
Supports? Congressional Research Service. Updated June 15, 2022.
Accessed at <a href="https://crsreports.congress.gov/product/pdf/IF/IF10343">https://crsreports.congress.gov/product/pdf/IF/IF10343</a>.
\5\ Dawson, L. and Kates, J. Insurance Coverage and Viral
Suppression Among People with HIV, 2018. September 2020. Kaiser
Family Foundation. Accessed at <a href="https://www.kff.org/hivaids/issue-brief/insurance-coverage-and-viral-suppression-among-people-with-hiv-2018/">https://www.kff.org/hivaids/issue-brief/insurance-coverage-and-viral-suppression-among-people-with-hiv-2018/</a>.
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Ensuring beneficiaries can access covered services is a crucial
element of the Medicaid program. Depending on the State and its
Medicaid program structure, beneficiaries access their health care
services using a variety of care delivery systems; for example, fee-
for-service (FFS) and managed care, including through demonstrations
and waiver programs. In 2020, 72 percent \6\
[[Page 28093]]
of Medicaid beneficiaries were enrolled in comprehensive managed care
plans; the remaining individuals received all of their care or some
services that have been carved out of managed care through FFS.
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\6\ MACPAC 2022 Analysis of T-MSIS data February 2022. Exhibit
30. Percentage of Medicaid Enrollees in Managed Care by State and
Eligibility Group <a href="https://www.macpac.gov/wp-content/uploads/2022/12/EXHIBIT-30.-Percentage-of-Medicaid-Enrollees-in-Managed-Care-by-State-and-Eligibility-Group-FY-2020.pdf">https://www.macpac.gov/wp-content/uploads/2022/12/EXHIBIT-30.-Percentage-of-Medicaid-Enrollees-in-Managed-Care-by-State-and-Eligibility-Group-FY-2020.pdf</a>.
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With a program as large and complex as Medicaid, to promote
consistent access to health care for all beneficiaries across all types
of care delivery systems in accordance with statutory requirements,
access regulations need to be multi-factorial. Strategies to enhance
access to health care services should reflect how people move through
and interact with the health care system. We view the continuum of
health care access across three dimensions of a person-centered
framework: (1) enrollment in coverage; (2) maintenance of coverage; and
(3) access to services and supports. Within each of these dimensions,
accompanying regulatory, monitoring, and/or compliance actions may be
needed to ensure access to health care is achieved and maintained.
In early 2022, we released a request for information (RFI) \7\ to
collect feedback on a broad range of questions that examined topics
such as: challenges with eligibility and enrollment; ways we can use
data available to measure, monitor, and support improvement efforts
related to access to services; strategies we can implement to support
equitable and timely access to providers and services; and
opportunities to use existing and new access standards to help ensure
that Medicaid and Children's Health Insurance Program (CHIP) payments
are sufficient to enlist enough providers. Some of the most common
feedback we received through the RFI related to promoting cultural
competency in access to and the quality of services for beneficiaries
across all dimensions of health care and using payment rates as a
driver to increase provider participation in Medicaid and CHIP
programs. Commenters were also interested in opportunities to align
approaches for payment regulation and compliance across Medicaid and
CHIP delivery systems and services.
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\7\ CMS Request for Information: Access to Coverage and Care in
Medicaid & CHIP. February 2022. For a full list of question from the
RFI, see <a href="https://www.medicaid.gov/medicaid/access-care/downloads/access-rfi-2022-questions.pdf">https://www.medicaid.gov/medicaid/access-care/downloads/access-rfi-2022-questions.pdf</a>.
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As noted above, the first dimension of access focuses on ensuring
that eligible people are able to enroll in the Medicaid program. Access
to Medicaid enrollment requires that a potential beneficiary know if
they are or may be eligible for Medicaid, be aware of Medicaid coverage
options, and be able to easily apply for and enroll in coverage. The
second dimension of access in this continuum relates to maintaining
coverage once the beneficiary is enrolled in the Medicaid program
initially. Maintaining coverage requires that eligible beneficiaries
are able to stay enrolled in the program without interruption, or that
they know how to and can smoothly transition to other health coverage,
such as CHIP, Exchange coverage, or Medicare, when they are no longer
eligible for Medicaid coverage. In September 2022, we published a
proposed rule, Streamlining the Medicaid, Children's Health Insurance
Program, and Basic Health Program Application, Eligibility,
Determination, Enrollment, and Renewal Processes (87 FR 54760;
hereinafter the ``Streamlining Eligibility & Enrollment proposed
rule'') to simplify the processes for eligible individuals to enroll
and retain eligibility in Medicaid, CHIP, and the Basic Health Program
(BHP).
The third dimension, which is the focus of this proposed rule, is
access to services and supports. This rule is focused on addressing
additional critical elements of access: (1) potential access (for
example, provider availability and network adequacy); (2) beneficiary
utilization (the use of health care and health services); and (3)
beneficiaries' perceptions and experiences with the care they did or
did not receive. These terms and definitions build upon our previous
efforts to examine how best to monitor access.\8\
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\8\ Kenney, Genevieve M., Kathy Gifford, Jane Wishner, Vanessa
Forsberg, Amanda I. Napoles, and Danielle Pavliv. ``Proposed
Medicaid Access Measurement and Monitoring Plan.'' Washington, DC:
The Urban Institute. August 2016. Accessed at <a href="https://www.medicaid.gov/sites/default/files/2019-12/monitoring-plan.pdf">https://www.medicaid.gov/sites/default/files/2019-12/monitoring-plan.pdf</a>.
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In addition to the three proposed rules (the Streamlining
Eligibility & Enrollment proposed rule, this proposed rule on managed
care, and Medicaid Program; Ensuring Access to Medicaid Services
proposed rule), we are also engaged in non-regulatory activities (for
example, best practices toolkits and technical assistance to States) to
improve access to health care services across Medicaid delivery
systems. As noted earlier, the Streamlining Eligibility & Enrollment
proposed rule addresses the first two dimensions of access to health
care: (1) enrollment in coverage and (2) maintenance of coverage.
Through that proposed rule, we sought to streamline Medicaid, CHIP and
BHP eligibility and enrollment processes, reduce administrative burden
on States and applicants toward a more seamless eligibility and
enrollment process, and increase the enrollment and retention of
eligible individuals. Through the Ensuring Access to Medicaid Services
proposed rule, and this proposed rule involving managed care, we
outline additional proposed steps to address the third dimension of the
health care access continuum: access to services, while also in this
rule addressing quality and financing of services in the managed care
context. We seek to address a range of access-related challenges that
impact how beneficiaries are served by Medicaid across all of its
delivery systems.
The use of managed care in Medicaid has grown from 81 percent in
2016 to 84 percent in 2020,\9\ with 72 percent of Medicaid
beneficiaries enrolled in comprehensive managed care organizations in
2020. We note that States may implement a Medicaid managed care
delivery system using four Federal authorities--sections 1915(a),
1915(b), 1932(a), and 1115(a) of the Social Security Act (the Act);
each is described briefly below.
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\9\ <a href="https://www.medicaid.gov/medicaid/managed-care/enrollment-report/index.html">https://www.medicaid.gov/medicaid/managed-care/enrollment-report/index.html</a>.
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Under section 1915(a) of the Act, States can implement a voluntary
managed care program by executing a contract with organizations that
the State has procured using a competitive procurement process. To
require beneficiaries to enroll in a managed care program to receive
services, a State must obtain approval from CMS under two primary
authorities:
<bullet> Through a State plan amendment (SPA) that meets standards
set forth in section 1932(a) of the Act, States can implement a
mandatory managed care delivery system. This authority does not allow
States to require beneficiaries who are dually eligible for Medicare
and Medicaid (dually eligible beneficiaries), American Indians/Alaska
Natives (except as permitted in section 1932(a)(2)(C) of the Act), or
children with special health care needs to enroll in a managed care
program. State plans, once approved, remain in effect until modified by
the State.
<bullet> We may grant a waiver under section 1915(b) of the Act,
permitting a State to require all Medicaid beneficiaries to enroll in a
managed care delivery system, including dually eligible beneficiaries,
American Indians/Alaska Natives, or children with special health care
needs. After approval, a State may operate a section 1915(b) waiver for
a 2-year period (certain waivers can be operated for up to 5
[[Page 28094]]
years if they include dually eligible beneficiaries) before requesting
a renewal for an additional 2- (or 5-) year period.
We may also authorize managed care programs as part of
demonstration projects under section 1115(a) of the Act that include
waivers permitting a State to require all Medicaid beneficiaries to
enroll in a managed care delivery system, including dually eligible
beneficiaries, American Indians/Alaska Natives, and children with
special health care needs. Under this authority, States may seek
additional flexibility to demonstrate and evaluate innovative policy
approaches for delivering Medicaid benefits, as well as the option to
provide services not typically covered by Medicaid. Such demonstrations
are approvable only if it is determined that the demonstration would
promote the objectives of the Medicaid statute and the demonstration is
subject to evaluation.
The above authorities all permit States to operate their Medicaid
managed care programs without complying with the following standards of
Medicaid law outlined in section of 1902 of the Act:
<bullet> Statewideness (section 1902(a)(1) of the Act): States may
implement a managed care delivery system in specific areas of the State
(generally counties/parishes) rather than the whole State;
<bullet> Comparability of Services (section 1902(a)(10)(B) of the
Act): States may provide different benefits to people enrolled in a
managed care delivery system; and
<bullet> Freedom of Choice (section 1902(a)(23)(A) of the Act):
States may generally require people to receive their Medicaid services
only from a managed care plan's network of providers or primary care
provider.
States that elect to operate a separate CHIP within a managed care
delivery system do not need specific statutory authority to offer
benefits through a managed care program. However, sections 2103(f)(3)
and 2107(e)(1)(N) and (R) of the Act apply certain provisions of
sections 1903 and 1932 of the Act related to Medicaid managed care to
separate CHIPs. States that elect a Medicaid expansion CHIPs that
operate within a managed care delivery system are subject to all
requirements under section 1932 of the Act.
In the May 6, 2016 Federal Register (81 FR 27498), we published the
``Medicaid and Children's Health Insurance Program (CHIP) Programs;
Medicaid Managed Care, CHIP Delivered in Managed Care, and Revisions
Related to Third Party Liability'' final rule (hereinafter referred to
as ``the 2016 final rule'') that modernized the Medicaid and CHIP
managed care regulations to reflect changes in the use of managed care
delivery systems. The 2016 final rule aligned many of the rules
governing Medicaid and CHIP managed care with those of other major
sources of coverage; implemented applicable statutory provisions;
strengthened actuarial soundness payment provisions to promote the
accountability of managed care program rates; strengthened efforts to
reform delivery systems that serve Medicaid and CHIP beneficiaries; and
enhanced policies related to program integrity. The 2016 final rule
applied many of the Medicaid managed care rules to separate CHIP,
particularly in the areas of access, finance, and quality through
cross-references to 42 CFR part 438.
In the January 18, 2017 Federal Register (82 FR 5415), we published
the ``Medicaid Program; The Use of New or Increased Pass-Through
Payments in Medicaid Managed Care Delivery Systems'' final rule
(hereinafter referred to as ``the 2017 final rule''). In the 2016 final
rule, we defined pass-through payments at Sec. 438.6(a) as any amount
required by the State (and considered in calculating the actuarially
sound capitation rate) to be added to the contracted payment rates paid
by the MCO, PIHP, or PAHP to hospitals, physicians, or nursing
facilities that is not for the following purposes: a specific service
or benefit provided to a specific enrollee covered under the contract;
a provider payment methodology permitted under Sec. 438.6(c)(1)(i)
through (iii) for services and enrollees covered under the contract; a
subcapitated payment arrangement for a specific set of services and
enrollees covered under the contract; graduate medical education (GME)
payments; or Federally-qualified health center (FQHC) or rural health
clinic (RHC) wrap around payments. On June 29th, 2016, we also
published the CMCS Informational Bulletin (CIB) concerning ``The Use of
New or Increased Pass-Through Payments in Medicaid Managed Care
Delivery Systems.'' The 2017 final rule codified the information in the
CIB as well as gave States the option to eliminate physician and
nursing facility payments immediately or phase down these payments over
the 5-year transition period if they prefer and specified the maximum
amount of pass-through payments permitted annually during the
transition periods under Medicaid managed care contract(s) and rate
certification(s). That final rule prevented increases in pass-through
payments and the addition of new pass-through payments beyond those in
place when the pass-through payment transition periods were established
in the 2016 final rule.
In the November 13, 2020 Federal Register (85 FR 72754), we
published the ``Medicaid Program; Medicaid and Children's Health
Insurance Program (CHIP) Managed Care'' final rule (hereinafter
referred to as the ``2020 final rule'') which streamlined the Medicaid
and CHIP managed care regulatory framework to relieve regulatory
burdens; support State flexibility and local leadership; and promote
transparency, flexibility, and innovation in the delivery of care. The
rule was intended to ensure that the regulatory framework was efficient
and feasible for States to implement in a cost-effective manner and
ensure that States can implement and operate Medicaid and CHIP managed
care programs without undue administrative burdens.
Since publication of the 2020 final rule, the COVID-19 public
health emergency (PHE) challenged States' ability to ensure
beneficiaries' access to high-quality care, ensure adequate provider
payment during extreme workforce challenges, and provide adequate
program monitoring and oversight. On January 28, 2021, Executive Order
(E.O.) 14009, Strengthening Medicaid and the Affordable Care Act, was
signed and established the policy objective to protect and strengthen
Medicaid and the Affordable Care Act (ACA) and to make high-quality
health care accessible and affordable for every American, and directed
executive departments and agencies to review existing regulations,
orders, guidance documents, and policies to determine whether such
agency actions are inconsistent with this policy. On April 25, 2022,
Executive Order 14070 directed agencies with responsibilities related
to Americans' access to health coverage to review agency actions to
identify ways to continue to expand the availability of affordable
health coverage, to improve the quality of coverage, to strengthen
benefits, and to help more Americans enroll in quality health coverage.
This proposed rule aims to fulfill Executive Orders 14009 and 14070 by
helping States to use lessons learned from the PHE and build stronger
managed care programs to better meet the needs of the Medicaid and CHIP
populations by improving access to and quality of care provided.
[[Page 28095]]
In addition, this rule proposes new standards to help States
improve their monitoring of access to care by requiring establishment
of new standards for appointment wait times, use of secret shopper
surveys, use of enrollee experience surveys, and requiring States to
submit a managed care plan analysis of payments made by plans to
providers, for specific services, to more closely monitor plans'
network adequacy. It also proposes provisions that would reduce burden
for States that choose to direct MCOs, PIHPs, or PAHPs in certain ways
to use their capitation payments to pay specified providers specified
amounts, address impermissible redistribution arrangements related to
State directed payments, and add clarity to the requirements related to
medical loss ratio calculations. To improve transparency and provide
valuable information to enrollees, providers, and CMS, this rule
proposes to enhance existing State website requirements for content and
ease of use. Lastly, this proposed rule would make quality reporting
more transparent and meaningful for driving quality improvement, reduce
burden on certain quality reporting requirements, and establish State
requirements for implementing a Medicaid and CHIP quality rating system
aimed at ensuring monitoring of performance by Medicaid and CHIP
managed care plans and empowering beneficiary choice in managed care.
Finally, we believe it is important to acknowledge the role of
health equity within this proposed rule. Medicaid and CHIP are the
primary source of health care coverage for over one in three people of
color in this country. Consistent with Executive Order 13985 \10\ which
calls for advancing equity for underserved populations, we are working
to advance health equity across CMS programs consistent with the goals
and objectives we have outlined in the CMS Framework for Health Equity
2022-2032 \11\ and the HHS Equity Action Plan.\12\ That effort includes
increasing our understanding of the needs of those we serve to ensure
that all individuals have access to equitable care and coverage.
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\10\ Executive Order 13985, <a href="https://www.whitehouse.gov/briefing-room/presidentialactions/2021/01/20/executive-order-advancingracial-equity-and-support-or-underservedcommunities-through-the-federal-government/">https://www.whitehouse.gov/briefing-room/presidentialactions/2021/01/20/executive-order-advancingracial-equity-and-support-or-underservedcommunities-through-the-federal-government/</a>.
\11\ CMS Framework for Health Equity 2022-2032: <a href="https://www.cms.gov/files/document/cmsframework-health-equity.pdf">https://www.cms.gov/files/document/cmsframework-health-equity.pdf</a>.
\12\ HHS Equity Action Plan, <a href="https://www.hhs.gov/sites/default/files/hhs-equity-action-plan.pdf">https://www.hhs.gov/sites/default/files/hhs-equity-action-plan.pdf</a>.
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A key part of our approach will be to work with States to improve
measurement of health disparities through the stratification of State
reporting on certain measures to identify potential differences in
access, quality, and outcomes based on demographic factors like race,
ethnicity, age, rural/urban status, disability, language, sex, sexual
orientation, and gender identity, as well as social determinants of
health.
The ``Medicaid Program and CHIP; Mandatory Medicaid and Children's
Health Insurance Program (CHIP) Core Set Reporting'' proposed rule
appeared in the August 22, 2022 Federal Register (87 FR 51303)
(hereinafter referred to as the``Mandatory Medicaid and CHIP Core Set
Reporting proposed rule''). In that proposed rule, we proposed that the
Secretary would specify, through annual subregulatory guidance, which
measures in the Medicaid and CHIP Child Core Set, the behavioral health
measures of the Medicaid Adult Core Set, and the Health Home Core Sets,
States would be required to stratify, and by which factors, such as
race, ethnicity, sex, age, rural/urban status, disability, language or
other factors specified by the Secretary. CMS also proposed a phased-in
timeline for stratification of measures in these Core Sets. In the
Medicaid Program; Ensuring Access to Medicaid Services proposed rule,
published elsewhere in the Federal Register, we also proposed a similar
phased-in timeline and process for mandatory reporting and
stratification of the Home and Community-Based Services (HCBS) Quality
Measure Set.
Measuring health disparities, reporting these results, and driving
improvements in quality are cornerstones of the CMS approach to
advancing health equity and also align with the CMS Strategic
Priorities.\13\ In this proposed rule, we establish our intent to align
with the stratification factors required for Core Set measure
reporting, which we believe would minimize State and health plan burden
to report stratified measures. To further reduce burden on States, we
would permit States to report, if finalized, the same measurement and
stratification methodologies and classifications as those proposed in
the Mandatory Medicaid and CHIP Core Set Reporting proposed rule and
the Ensuring Access to Medicaid Services proposed rule. We believe
these measures and methodologies would be appropriate to include in
States' Managed Care Program Annual Report (MCPAR) because Sec.
438.66(e)(2)(vii) requires information on and an assessment of the
operation of each managed care program and an evaluation of managed
care plan performance on quality measures. Reporting these measures in
MCPAR would minimize State and provider burden while allowing more
robust CMS monitoring and oversight of the quality of the health care
provided at a managed care plan and program level. We would also
anticipate publishing additional subregulatory guidance and adding
specific fields in MCPAR that would accommodate this measure and data
stratification reporting to simplify the process for States.
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\13\ CMS Strategic Plan 2022, <a href="https://www.cms.gov/cms-strategic-plan">https://www.cms.gov/cms-strategic-plan</a>.
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B. Provisions of the Proposed Regulations
Throughout this document, the term ``PAHP'' is used to mean a
prepaid ambulatory health plan that does not exclusively provide non-
emergency medical transportation services. Whenever this document is
referencing a PAHP that exclusively provides non-emergency medical
transportation services, it is specifically addressed as a ``Non-
Emergency Medical Transportation (NEMT) PAHP.'' Throughout this
document, the use of the term ``managed care plan'' includes managed
care organizations (MCOs), prepaid inpatient health plans (PIHPs), and
prepaid ambulatory health plans (PAHPs) and is used only when the
provision under discussion applies to all three arrangements. An
explicit reference is used in the preamble if the provision applies to
primary care case management (PCCMs) or PCCM entities.
For CHIP, the preamble uses ``CHIP'' when referring collectively to
separate child health programs and Medicaid expansion programs. We use
``separate CHIP'' specifically in reference to separate child health
programs and also in reference to any proposed changes in subpart L of
part 457, which are only applicable to separate child health programs
operating in a managed care delivery system. Also note in this proposed
rule, all proposed changes to Medicaid managed care regulations are
equally applicable to Medicaid expansion managed care programs as
described at Sec. 457.1200(c).1. Access (42 CFR 438.2, 438.10, 438.66,
438.68, 438.206, 438.207, 438.214, 438.602, 457.1207, 457.1218,
457.1230, 457.1250, 457.1285)
a. Enrollee Experience Surveys (Sec. Sec. 438.66(b) and (c),
457.1230(b))
In the 2016 final rule, we renamed and expanded Sec. 438.66 State
Monitoring Requirements to ensure that States had robust systems to
monitor their
[[Page 28096]]
managed care programs, utilize the monitoring results to make program
improvements, and report to CMS annually the results of their
monitoring activities. Existing regulations at Sec. 438.66(c)(5)
require States to use the data collected from their monitoring
activities to improve the performance of their managed care programs,
including results from any enrollee or provider satisfaction surveys
conducted by the State or managed care plan. Some States currently use
surveys to gather direct input from their managed care enrollees, which
we believe is a valuable source of information on enrollees' actual and
perceived access to services. As a general matter, disparities in
access to care related to demographic factors such as race, ethnicity,
language, or disability status are, in part, a function of the
availability of the accessible providers who are willing to provide
care and are competent in meeting the needs of populations in medically
underserved communities. Surveys can focus on matters that are
important to enrollees and for which they are the best and, sometimes,
only source of information. Patient experience surveys can also focus
on how patients experienced or perceived key aspects of their care, not
just on how satisfied they were with their care. For example,
experience surveys can focus on asking patients whether or how often
they accessed health care, barriers they encountered in accessing
health care, and their experience including communication with their
doctors, understanding their medication instructions, and the
coordination of their health care needs. Some States already use
enrollee experience surveys and report that the data is an asset in
their efforts to assess whether the managed care program is meeting its
enrollees' needs.
One of the most commonly used enrollee experience survey in the
health care industry, including for Medicare Advantage organizations,
is the Consumer Assessment of Healthcare Providers and Systems
(CAHPS[supreg]).\14\ CAHPS experience surveys are available for health
plans, dental plans, and home and community-based services (HCBS)
programs, as well as for patient experience with providers such as home
health, condition specific care such as behavioral health, or facility-
based care such as in a nursing home. A survey specially designed to
measure the impact of long-term services and supports (LTSS) on the
quality of life and outcomes of enrollees is the National Core
Indicators-Aging and Disabilities (NCI-AD[supreg]) Adult Consumer
Survey<SUP>TM</SUP>.\15\ Whichever survey is chosen by a State, it
should complement data gathered from other network adequacy and access
monitoring activities to provide the State with a more complete
assessment of their managed care programs' success at meeting their
enrollees' needs. To ensure that States' managed care program
monitoring systems, required at Sec. 438.66(a), appropriately capture
the enrollee experience, we propose to revise Sec. 438.66(b)(4) to
explicitly include ``enrollee experience.'' Section 438.66(c)(5)
currently requires States to use the results from any enrollee or
provider satisfaction surveys they choose to conduct to improve the
performance of its managed care program. To ensure that States have the
data from an enrollee experience survey to include in their monitoring
activities and improve the performance of their managed care programs,
we propose to revise Sec. 438.66(c)(5) to require that States conduct
an annual enrollee experience survey. To reflect this, we propose to
revise Sec. 438.66(c)(5) to add ``an annual'' before ``enrollee'' and
add ``experience survey conducted by the State'' after ``enrollee.'' We
also propose to replace ``or'' with ``and'' to be explicit that use of
provider survey results alone would not be sufficient to comply with
Sec. 438.66(c)(5). While we encourage States and managed care plans to
utilize provider surveys, we are not proposing to mandate them at this
time. We believe other proposals in this rule, such as enrollee surveys
and secret shopper surveys, may yield information that would inform our
decision on the use of provider surveys in the future. We invite
comment on whether we should mandate the use of a specific enrollee
experience survey, define characteristics of acceptable survey
instruments, and the operational considerations of enrollee experience
surveys States use currently.
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\14\ The acronym ``CAHPS'' is a registered trademark of the
Agency for Healthcare Research and Quality.
\15\ NCI-AD Adult Consumer Survey<SUP>TM</SUP> is a copyrighted
tool.
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To reflect these proposals in the annual assessment of the
operation of the managed care program report called the Managed Care
Program Annual Report (MCPAR) required at Sec. 438.66(e), we propose
conforming edits in Sec. 438.66(e)(2)(vii). We propose to include the
results of an enrollee experience survey to the list of items that
States must evaluate in their report and add ``provider'' before
``surveys'' to distinguish them from enrollee experience surveys.
Additionally, consistent with the transparency proposals described in
section I.B.1.f. of this section, we propose to revise Sec.
438.66(e)(3)(i) to require that States post the report required in
Sec. 438.66(e)(1) on their website within 30 calendar days of
submitting it to CMS. Currently Sec. 438.66(e)(3)(i) only requires
that the report be posted on the State's website but does not specify a
timeframe; we believe that adding further specificity about the timing
of when the report should be posted would be helpful to interested
parties and bring consistency to this existing requirement. This
proposal is authorized by section 1902(a)(6) of the Act which requires
that States provide reports, in such form and containing such
information, as the Secretary may from time to time require.
For an enrollee experience survey to yield robust, usable results,
it should be easy to understand, simple to complete, and readily
accessible for all enrollees that receive it; therefore, we believe
they should meet the interpretation, translation, and tagline criteria
in Sec. 438.10(d)(2). Therefore, we propose to add enrollee experience
surveys as a document subject to the requirements in Sec.
438.10(d)(2). This would ensure that enrollees that receive a State's
enrollee experience survey would be fully notified that oral
interpretation in any language and written translation in the State's
prevalent languages would be readily available, and how to request
auxiliary aids and services, if needed.
These proposals are authorized by section 1932(b)(5) of the Act
which requires managed care organizations to demonstrate adequate
capacity and services by providing assurances to the State and CMS that
it has the capacity to serve the expected enrollment in its service
area, including assurances that it offers an appropriate range of
services and access to preventive and primary care services for the
population expected to be enrolled in such service area, and maintains
a sufficient number, mix, and geographic distribution of providers of
services. The authority for our proposals is extended to prepaid
inpatient health plans (PIHPs) and prepaid ambulatory health plans
(PAHPs) through regulations based on our authority under section
1902(a)(4) of the Act. Because enrollee experience survey results would
provide direct and candid input from enrollees, States and managed care
plans could use the results to determine if their networks offer an
appropriate range of services and access as well as if it provides a
sufficient number, mix, and geographic distribution of providers to
meet their enrollees' needs. Enrollee experience survey data would
enable managed care plans to assess whether their networks
[[Page 28097]]
are providing sufficient capacity as experienced by their enrollees and
that assessment would inform the assurances that the plan is required
to provide to the State and CMS. These proposals are also authorized by
section 1932(c)(1)(A)(i) and (iii) of the Act which require States that
contract with MCOs to develop and implement a quality assessment and
improvement strategy that includes: standards for access to care so
that covered services are available within reasonable timeframes and in
a manner that ensures continuity of care and adequate primary care and
specialized services capacity and procedures for monitoring and
evaluating the quality and appropriateness of care and services to
enrollees and requirements for provision of quality assurance data to
the State. Data from enrollee experience surveys would enable States to
use the results to evaluate whether their plans' networks are providing
access to covered services within reasonable timeframes and in a manner
that ensures continuity of care. These data would also inform the
development and maintenance of States' quality assessment and
improvement strategies and would be critical to States' monitoring and
evaluation of the quality and appropriateness of care and services
provided to enrollees.
We remind States that in addition to the mandatory external quality
review (EQR) activities under Sec. 438.358(b), there is an existing
optional EQR activity under Sec. 438.358(c)(2) for the administration
or validation of consumer or provider surveys of quality of care.
States that contract with MCOs and use external quality review
organizations (EQROs) to administer or validate the proposed enrollee
experience surveys may be eligible to receive up to a 75 percent
enhanced Federal match, pursuant to Sec. 438.370, to reduce the
financial burden of conducting or validating the proposed enrollee
survey(s).
We request comment on the cost and feasibility of implementing
enrollee experience surveys for each managed care program as well as
the extent to which States already use enrollee experience surveys for
their managed care programs.
We propose that States would have to comply with Sec. 438.66(b)
and (c) no later than the first managed care plan rating period that
begins on or after 3 years after the effective date of the final rule
as we believe this is a reasonable timeframe for compliance. We have
proposed this applicability date in Sec. 438.66(f).
We did not adopt the managed care State monitoring requirements
described at Sec. 438.66 in the 2016 final rule for separate CHIPs
because we wished to limit administrative burden on separate CHIP
managed care plans, which typically serve smaller populations. Since we
did not adopt MCPAR, we do not plan to adopt the new Medicaid enrollee
experience survey requirements proposed at Sec. 438.66(b) and (c) for
separate CHIPs. However, States currently collect enrollee experience
data for CHIP through annual CAHPS surveys as required at section
2108(e)(4) of the Act. Currently, there are no requirements for States
to use these data to evaluate their separate CHIP managed care plans
network adequacy or to make these survey results available to
beneficiaries to assist in selecting a managed care plan. We believe
that enrollee experience data can provide an invaluable window into the
performance of managed care plans and assist States in their annual
review and certification of network adequacy for separate CHIP MCOs,
PIHPs, and PAHPs. For this reason, we propose to amend Sec.
457.1230(b) to require States to evaluate annual CAHPS survey results
as part of the State's annual analysis of network adequacy as described
in Sec. 438.207(d). Since States already collect CAHPS survey data for
CHIP and would likely not need the same timeframe to implement as
needed for implementing the proposed Medicaid enrollee experience
surveys requirement, we propose for the provision at Sec. 457.1230(b)
to be applicable 60 days after the effective date of the final rule.
However, we are open to a later applicability date such as 1, 2, or 3
years after the effective date of the final rule. We invite comment on
the appropriate applicability date for this provision.
We also believe that access to enrollee experience data is critical
in affording separate CHIP beneficiaries the opportunity to make
informed decisions when selecting their managed care plan(s). To this
end, we propose at Sec. 457.1207 to require States to post comparative
summary results of CAHPS surveys by managed care plan annually on State
websites as described at Sec. 438.10(c)(3). The posted summary results
must be updated annually and allow for easy comparison between the
managed care plans available to separate CHIP beneficiaries. We seek
public comment on other approaches to including CHIP CAHPS survey data
for the dual purposes of improving access to managed care services and
enabling beneficiaries to have useful information when selecting a
managed care plan.
b. Appointment Wait Time Standards (Sec. Sec. 438.68(e), 457.1218)
In the 2020 final rule, we revised Sec. 438.68(b)(1) and (2) by
replacing the requirement for States to set time and distance standards
with a more flexible requirement that States set a quantitative network
adequacy standard for specified provider types. We explained that
quantitative network adequacy standards that States may elect to use
included minimum provider-to-enrollee ratios; maximum travel time or
distance to providers; a minimum percentage of contracted providers
that are accepting new patients; maximum wait times for an appointment;
hours of operation requirements (for example, extended evening or
weekend hours); and combinations of these quantitative measures. We
encouraged States to use the quantitative standards in combination- not
separately- to ensure that there are not gaps in access to, and
availability of, services for enrollees. (85 FR 72802)
Key to the effectiveness of the Medicaid and CHIP program is
ensuring that it provides timely access to high-quality services in a
manner that is equitable and consistent. During the COVID-19 public
health emergency (PHE), managed care plans have faced many challenges
ensuring access to covered services and those challenges shed light on
opportunities for improvement in monitoring timely access. These
challenges include workforce shortages, changes in providers' workflows
and operating practices, providers relocating leaving shortages in
certain areas, and shifts in enrollee utilization such as delaying or
forgoing preventive care. Some of these challenges may become permanent
and thus, States and managed care plans need to adjust their
monitoring, evaluation, and planning strategies to ensure equitable
access to all covered services.
On February 17, 2022, we issued a request for information \16\
(RFI) soliciting public input on improving access in Medicaid and CHIP,
including ways to promote equitable and timely access to providers and
services. Barriers to accessing care represented a significant portion
of comments received, with common themes related to providers not
accepting Medicaid and
[[Page 28098]]
recommendations calling for us to set specific quantitative access
standards. Many commenters urged us to consider developing a Federal
standard for timely access to providers and services, but giving State
Medicaid and CHIP agencies the flexibility to impose more stringent
requirements. A recently published study \17\ examined the extent to
which Medicaid managed care plan networks may overstate the
availability of physicians in Medicaid, and evaluated the implications
of discrepancies in the ``listed'' and ``true'' networks for
beneficiary access. The authors concluded that findings suggest that
current network adequacy standards might not reflect actual access and
that new methods are needed that account for physicians' willingness to
serve Medicaid patients. Another review of 34 audit studies
demonstrated that Medicaid is associated with a 1.6-fold lower
likelihood in successfully scheduling a primary care appointment and a
3.3-fold lower likelihood in successfully scheduling a specialty
appointment when compared with private insurance.\18\
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\16\ CMS Request for Information: Access to Coverage and Care in
Medicaid & CHIP. February 2022. For a full list of question from the
RFI, see <a href="https://www.medicaid.gov/medicaid/access-care/downloads/access-rfi-2022-questions.pdf">https://www.medicaid.gov/medicaid/access-care/downloads/access-rfi-2022-questions.pdf</a>.
\17\ <a href="https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2021.01747">https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2021.01747</a>.
\18\ W. Hsiang, A. Lukasiewicz, and M. Gentry, ``Medicaid
Patients Have Greater Difficulty Scheduling Health Care Appointments
Compared With Private Insurance Patients: A Meta-Analysis,'' SAGE
Journals, April 5, 2019, available at <a href="https://journals.sagepub.com/doi/full/10.1177/0046958019838118">https://journals.sagepub.com/doi/full/10.1177/0046958019838118</a>.
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Based on the RFI comments received, research, engagement with
interested parties, and our experience in monitoring State managed care
programs, we are persuaded about the need for increased oversight of
network adequacy and overall access to care, and propose a new
quantitative network adequacy standard. Specifically, we propose to
redesignate existing Sec. 438.68(e) regarding publication of network
adequacy standards to Sec. 438.68(g) and create a new Sec. 438.68(e)
titled ``Appointment wait time standards.''
In Sec. 438.68(e)(1)(i) through (iv), we propose that States
develop and enforce wait time standards for routine appointments for
four types of services: outpatient mental health and substance use
disorder (SUD)-adult and pediatric, primary care- adult and pediatric,
obstetrics and gynecology (OB/GYN), and an additional type of service
determined by the State (in addition to the three listed) in an
evidence-based manner for Medicaid. We include ``If covered in the
MCO's, PIHP's, or PAHP's contract'' before the first three service
types (paragraphs (e)(1)(i) through (iii)) to be clear that standards
only need to be developed and enforced if the service is covered by the
managed care plan's contract, but the forth service (paragraph
(e)(1)(iv)) must be one that is covered by the plan's contract. For
example, we understand that primary care and OB/GYN is likely not
covered by a behavioral health PIHP; therefore, a State would not be
required to set appointment wait time standards for primary care and
OB/GYN for the behavioral health PIHP and would only have to set
appointment wait time standards for mental health and SUD as well as
one State-selected provider type. To ensure that our proposal to have
States set appointment wait time standards for mental health and SUD as
well as one State-selected provider type for behavioral PIHPs and PAHPs
is feasible, we request comment on whether behavioral health PIHPs and
PAHPs include provider types other than mental health and SUD in their
networks. Although we believe behavioral health PIHPs and PAHPs may
include other provider types, we want to validate our understanding. We
propose to adopt the proposed wait time standards for separate CHIP
through an existing cross-reference at Sec. 457.1218. We are proposing
primary care, OB/GYN, and mental health and SUD because they are
indicators of core population health; therefore, we believe proposing
to require States to set appointment wait time standards for them would
have the most impact on access to care for Medicaid and CHIP managed
care enrollees.
At Sec. 438.68(e)(1)(iv), we propose that States select a provider
type in an evidence-based manner to give States the opportunity to use
an appointment wait time standard to address an access challenge in
their local market. We are not proposing to specify the type of
evidence to be used in this rule; rather, we defer to States to
consider multiple sources, such as encounter data, appeals and
grievances, and provider complaints, as well as to consult with their
managed care plans to select a provider type. We believe proposing that
States select one of the provider types subject to an appointment wait
time standard would encourage States and managed care plans to analyze
network gaps effectively and then innovate new ways to address the
challenges that impede timely access. States would identify the
provider type(s) they choose in existing reporting in MCPAR, per Sec.
438.66(e), and the Network Adequacy and Access Assurances Report, per
Sec. 438.207(d).
To be clear that the appointment wait time standards proposed in
Sec. 438.68(e) cannot be the quantitative network adequacy standard
required in Sec. 438.68(b)(1), we propose to add ``. . . , other than
for appointment wait times . . .'' in Sec. 438.68(b)(1). We are not
proposing to define routine appointments in this rule; rather, we defer
to States to define it as they deem appropriate. We encourage States to
work with their managed care plans and their network providers to
develop a definition of ``routine'' that would reflect usual patterns
of care and current clinical standards. We acknowledge that defining
``urgent'' and ``emergent'' for appointment wait time standards could
be much more complex given the standards of practice by specialty and
the patient-specific considerations necessary to determine those
situations. We invite comments on defining these terms should we
undertake additional rulemaking in the future. We clarify that setting
appointment wait time standards for routine appointments as proposed at
Sec. 438.68(e)(1) would be a minimum; States are encouraged to set
additional appointment wait time standards for other types of
appointments. For example, States may consider setting appointment wait
time standards for emergent or urgent appointments as well.
To provide States with flexibility to develop appointment wait time
standards that reflect the needs of their Medicaid and CHIP managed
care populations and local provider availability while still setting a
level of consistency, we propose maximum appointment wait times at
Sec. 438.68(e)(1): State developed appointment wait times must be no
longer than 10 business days for routine outpatient mental health and
substance use disorder appointments in Sec. 438.68(e)(1)(i) and no
longer than 15 business days for routine primary care in Sec.
438.68(e)(1)(ii) and OB/GYN appointments in Sec. 438.68(e)(1)(iii). We
are not proposing a maximum appointment wait time standard for the
State-selected provider type. These proposed maximum timeframes were
informed by standards for the individual insurance Marketplace
established under the Affordable Care Act that will begin in 2024 of 10
business days for behavioral health and 15 business days for primary
care services; we note that we elected not to adopt the Marketplace's
appointment wait time standard of 30 business days for non-urgent
specialist appointments as we believe focusing on primary care, OB/GYN,
and mental health and SUD is the most appropriate starting place for
Medicaid managed care standards. These proposed timeframes were also
[[Page 28099]]
informed by engagement with interested parties, including comments in
response to the RFI. We are proposing to require appointment wait times
for routine appointments only in this rule as we believe that providers
utilize more complex condition and patient-specific protocols and
clinical standards of care to determine scheduling for urgent and
emergent care. We may address standards for other types of appointments
in future rulemaking and hope that information from the use of
appointment wait time standards for routine appointments may inform
future proposals.
In developing this proposal, we considered appointment wait time
standards between 30-calendar days and 45-calendar days. Some
interested parties stated that these standards would be more
appropriate for routine appointments and would more accurately reflect
current appointment availability for most specialties. However, we
believe 30-calendar days and 45-calendar days as the maximum wait time
may be too long as a standard; we understand it may be a realistic
timeframe currently for some specialist appointments but we were not
convinced that they should be the standard for outpatient mental health
and substance use disorder, primary care, and OB/GYN appointments. We
invite comment on aligning with the Marketplace standards at 10- and
15-business days, or whether wait time standards should differ, and if
so, what standards would be the most appropriate.
To make the appointment wait time standards as effective as
possible, we defer to States on whether and how to vary appointment
wait time standards for the same provider type; for example, by adult
versus pediatric, telehealth versus in-person, geography, service type,
or other ways. However, wait time standards must, at a minimum, reflect
the timing proposed in Sec. 438.68(e)(1). We encourage States to
consider the unique access needs of certain enrollees when setting
their appointment wait time standards to facilitate obtaining
meaningful results when assessing managed care plan compliance with the
standards.
As a general principle, we seek to align across Medicaid managed
care, CHIP managed care, the Marketplace, and Medicare Advantage (MA)
when reasonable to build consistency for individuals that may change
coverage over time and to enable more effective and standardized
comparison and monitoring across programs. Proposing 90 percent
compliance with 10- and 15- business day maximum appointment wait time
standards would be consistent with standards set for Marketplace plans
for plan year 2024.\19\ However, we note that for MA, CMS expects MA
plans to set reasonable standards for primary care services for
urgently needed services or emergencies immediately; services that are
not emergency or urgently needed, but in need of medical attention
within one week; and routine and preventive care within 30 days.\20\
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\19\ <a href="https://www.cms.gov/sites/default/files/2022-04/Final-2023-Letter-to-Issuers_0.pdf">https://www.cms.gov/sites/default/files/2022-04/Final-2023-Letter-to-Issuers_0.pdf</a>.
\20\ MCM Chapter 4 (<a href="http://www.cms.gov">www.cms.gov</a>).
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To ensure that managed care plans' contracts reflect their
obligation to comply with the appointment wait time standards, we
propose to revise Sec. 438.206(c)(1)(i) to include appointment wait
time standards as a required provision in MCO, PIHP, and PAHP contracts
for Medicaid, which is included in separate CHIP regulations through an
existing cross-reference at Sec. 457.1230(a). We believe this is
necessary since our proposal at Sec. 438.68(e)(1) to develop and
enforce appointment wait time standards is a State responsibility;
proposing this revision to Sec. 438.206(c)(1)(i) would specify the
corresponding managed care plan responsibility.
We propose to revise the existing applicability date in Sec.
438.206(d) for Medicaid, which is applicable for separate CHIPs through
an existing cross-reference at Sec. 457.1230(a) and a proposed cross-
reference at Sec. 457.1200(d), to reflect that States would have to
comply with Sec. 438.206(c)(1)(i) no later than the first managed care
plan rating period that begins on or after 4 years after the effective
date of the final rule. We believe this is a reasonable timeframe for
compliance.
Current requirements at Sec. 438.68(c)(1) and (2) for Medicaid,
and through a cross-reference at Sec. 457.1218 for separate CHIP,
direct States to consider twelve elements when developing their network
adequacy standards. We remind States that Sec. 438.68(c)(1)(ix)
includes the availability and use of telemedicine, e-visits, and/or
other evolving and innovative technological solutions as an element
that States must consider when developing their network adequacy
standards. Services delivered via telehealth seek to improve a
patient's health through two-way, real time interactive communication
between the patient, and the provider. Services delivered in this
manner can, for example, be used for assessment, diagnosis,
intervention, consultation, and supervision across distances. Services
can be delivered via telehealth across all populations served in
Medicaid including, but not limited to children, individuals with
disabilities, and older adults. States have broad flexibility to cover
telehealth through Medicaid and CHIP, including the methods of
communication (such as telephonic or video technology commonly
available on smart phones and other devices) to use.\21\ States need to
balance the use of telehealth with the availability of providers that
can provide in-person care and enrollees' preferences for receiving
care to ensure that they establish network adequacy standards under
Sec. 438.68 that accurately reflect the practical use of both types of
care in their State. Therefore, States should review encounter data to
gauge telehealth use by enrollees over time and the availability of
telehealth appointments by providers and account for that information
when developing their appointment wait time standards. We also remind
States that they have broad flexibility with respect to covering
services provided via telehealth and may wish to include quantitative
network adequacy standards or specific appointment wait time standards
for telehealth in addition to in-person appointment standards, as
appropriate based on current practices and the extent to which network
providers offer telehealth services. Although States have broad
flexibility in this area, we remind States of their responsibility
under section 504 of the Rehabilitation Act and section 1557 of the
Affordable Care Act to ensure effective communications for patients
with disabilities for any telehealth services that are offered and to
provide auxiliary aids and services at no cost to the individual to
ensure that individuals with disabilities are able to access and
utilize services provided via telehealth; we also remind States of
their responsibilities under Title VI of the Civil Rights Act of 1964,
including the obligation to take reasonable steps to ensure meaningful
language access for persons with limited English proficiency when
providing telehealth services.\22\
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\21\ <a href="https://www.medicaid.gov/medicaid/benefits/downloads/medicaid-chip-telehealth-toolkit.pdf">https://www.medicaid.gov/medicaid/benefits/downloads/medicaid-chip-telehealth-toolkit.pdf</a>.
\22\ US Department of Justice, Civil Rights Division and
Department of Health and Human Services, Office for Civil Rights,
``Guidance on Nondiscrimination in Telehealth: Federal Protections
to Ensure Accessibility to People with Disabilities and Limited
English Proficient Persons,'' July 29, 2022, available online at
<a href="https://www.hhs.gov/civil-rights/for-individuals/disability/guidance-on-nondiscrimination-in-telehealth/index.html">https://www.hhs.gov/civil-rights/for-individuals/disability/guidance-on-nondiscrimination-in-telehealth/index.html</a>.
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Current Medicaid regulations at Sec. 438.68(e), and through a
cross-reference at Sec. 457.1218 for separate
[[Page 28100]]
CHIP, require States to publish the network adequacy standards required
by Sec. 438.68(b)(1) and (2) on their websites and to make the
standards available upon request at no cost to enrollees with
disabilities in alternate formats or through the provision of auxiliary
aids and services. To ensure transparency and inclusion of the new
proposed appointment wait time standards in this provision, we propose
several revisions: to redesignate Sec. 438.68(e) to Sec. 438.68(g);
to replace ``and'' with a comma after ``(b)(1);'' add ``(b)'' before
``(2)'' for clarity; and add a reference to (e) after ``(b)(2).'' We
believe these changes make the sentence clearer and easier to read.
Lastly, Sec. 438.68(e) currently includes ``. . . the website required
by Sec. 438.10.'' For additional clarity in redesignated Sec.
438.68(g), we propose to replace ``438.10'' with ``Sec. 438.10(c)(3)''
to help readers more easily locate the requirements for State websites.
These proposed changes apply equally to separate CHIP managed care
through existing cross-references at Sec. Sec. 457.1218 and 457.1207.
At Sec. 438.68(e)(2), which is included in separate CHIP
regulations through an existing cross-reference at Sec. 457.1218, we
propose that managed care plans would be deemed compliant with the
standards established in paragraph (e)(1) when secret shopper results,
described in section I.B.1.c. of this rule, reflect a rate of
appointment availability that meets State established standards at
least 90 percent of the time. By proposing a minimum compliance rate
for appointment wait time standards, we would provide States with
leverage to hold their managed care plans accountable for ensuring that
their network providers offer timely appointments. Further, ensuring
timely appointment access 90 percent of the time would be an important
step toward helping States ensure that the needs of their Medicaid and
CHIP populations are being met timely. As with any provision of part
438 and subpart L of part 457, we may require States to take corrective
action to address noncompliance.
To ensure that appointment wait time standards would be an
effective measure of network adequacy, we believe we need some
flexibility to add provider types to address new access or capacity
issues at the national level. Therefore, at Sec. 438.68(e)(3), which
is included in separate CHIP regulations through an existing cross-
reference at Sec. 457.1218, we propose that CMS may select additional
types of appointments to be added to Sec. 438.68(e)(1) after
consulting with States and other interested parties and providing
public notice and opportunity to comment. From our experience with the
COVID-19 PHE as well as multiple natural disasters in recent years, we
believe it prudent to explicitly state that we may utilize this
flexibility as we deem appropriate in the future.
We recognize that situations may arise when an MCO, PIHP, or PAHP
may need an exception to the State established provider network
standards, including appointment wait times. Section 438.68(d)
currently provides that, to the extent a State permits an exception to
any of the provider-specific network standards, the standard by which
an exception would be evaluated and approved must be specified in the
MCO, PIHP, or PAHP contract and must be based, at a minimum, on the
number of providers in that specialty practicing in the MCO's, PIHP's,
or PAHP's service area. We propose to make minor grammatical revisions
to Sec. 438.68(d)(1) by deleting ``be'' before the colon and inserting
``be'' as the first word of Sec. 438.68(d)(1)(i) and (ii), which is
included in separate CHIP regulations through an existing cross-
reference at Sec. 457.1218. We also propose to add a new standard at
Sec. 438.68(d)(1)(iii) for Medicaid, and through an existing cross-
reference at Sec. 457.1218 for separate CHIP, for reviews of exception
requests, which would require States to consider the payment rates
offered by the MCO, PIHP, or PAHP to providers included in the provider
group subject to the exception. Managed care plans sometimes have
difficulty building networks that meet network adequacy standards due
to low payment rates. We believe that States should consider whether
this component is a contributing factor to a plan's inability to meet
the standards required by Sec. 438.68(b)(1) and (2) and (e), when
determining whether a managed care plan should be granted an exception.
We remind States of their obligation at Sec. 438.68(d)(2) to monitor
enrollee access on an ongoing basis to the provider types in managed
care networks that operate under an exception and report their findings
as part of the annual Medicaid MCPAR required at Sec. 438.66(e).
Our proposal for States to develop and enforce appointment wait
time standards proposed at Sec. 438.68(e) and the accompanying secret
shopper surveys of plan's compliance with them (described in section
I.B.1.c. of this proposed rule) proposed at Sec. 438.68(f) are
authorized by section 1932(b)(5) of the Act, and is extended to PIHPs
and PAHPs through regulations based on our authority under section
1902(a)(4) of the Act, and authorized for CHIP through section
2103(f)(3) of the Act. We believe that secret shopper surveys could
provide unbiased, credible, and representative data on how often
network providers are offering routine appointments within the State's
appointment wait time standards and these data would aid managed care
plans as they assess their networks, pursuant to Sec. 438.207(b), and
provide an assurance to States that their networks have the capacity to
serve the expected enrollment in their service area and that it offers
appropriate access to preventive and primary care services for their
enrollees. States should find the results of the secret shopper surveys
a rich source of information to assess compliance with the components
of their quality strategy that address access to care and determine
whether covered services are available within reasonable timeframes, as
required in section 1932(c)(1)(A)(i) of the Act and required for CHIP
through section 2103(f)(3) of the Act.
Section 1932(d)(5) of the Act requires that, no later than July 1,
2018, contracts with MCOs and PCCMs, as applicable, must include a
provision that providers of services or persons terminated (as
described in section 1902(kk)(8) of the Act) from participation under
this title, title XVIII, or title XXI must be terminated from
participating as a provider in any network. Although States have had to
comply with this provision for several years, we believe we should
reference this important provision in 42 CFR part 438, as well as use
our authority under section 1902(a)(4) of the Act to apply it to PIHPs
and PAHPs. To do this, we propose a new Sec. 438.214(d)(2) to reflect
that States must ensure through their MCO, PIHP, and PAHP contracts
that providers of services or persons terminated (as described in
section 1902(kk)(8) of the Act) from participation under this title,
title XVIII, or title XXI must be terminated from participating as a
provider in any Medicaid managed care plan network.
We propose that States would have to comply with Sec.
438.68(b)(1), (e), and (g) no later than the first MCO, PIHP, or PAHP
rating period that begins on or after 3 years after the effective date
of the final rule as we believe this is a reasonable timeframe for
compliance. We propose that States would have to comply with Sec.
438.68(f) no later than the first MCO, PIHP, or PAHP rating period that
begins on or after 4 years after the effective date of the final rule.
We propose that States would have to comply with Sec. 438 (d)(1)(iii)
no later than the first MCO, PIHP, or PAHP rating period that begins on
or after 2
[[Page 28101]]
years after the effective date of the final rule. We have proposed
these applicability dates in Sec. 438.68(h) for Medicaid, and for
separate CHIPs through an existing cross-reference at Sec. 457.1218
and a proposed cross-reference at Sec. 457.1200(d).
c. Secret Shopper Surveys (Sec. Sec. 438.68(f), 457.1207, 457.1218)
We recognize that in some States and for some services, Medicaid
beneficiaries face significant gaps in access to care. Evidence
suggests that in some localities and for some services, it takes
Medicaid beneficiaries longer to access medical appointments compared
to individuals with other types of health coverage.\23\ This may be
exacerbated by difficulties in accessing accurate information about
managed care plans' provider networks; although Medicaid and CHIP
managed care plans are required to make regular updates to their online
provider directories in accordance with Sec. Sec. 438.10(h)(3) and
457.1207 respectively, analyses of these directories suggest that a
significant share of provider listings include inaccurate information
on, for example, how to contact the provider, the provider's network
participation, and whether the provider is accepting new patients.\24\
Relatedly, analyses have shown that the vast majority of services
delivered to Medicaid beneficiaries are provided by a small subset of
health providers listed in managed care plan provider directories, with
a substantial share of listed providers delivering little or no care
for Medicaid beneficiaries.\25\ Some measures of network adequacy may
not be as meaningful as intended if providers are ``network providers''
because they have a contract with a managed care plan, but in practice
are not actually accepting new Medicaid enrollees or impose a cap on
the number of Medicaid enrollees they will see.
---------------------------------------------------------------------------
\23\ W. Hsiang, A. Lukasiewicz, and M. Gentry, ``Medicaid
Patients Have Greater Difficulty Scheduling Health Care Appointments
Compared With Private Insurance Patients: A Meta-Analysis,'' SAGE
Journals, April 5, 2019, available at <a href="https://journals.sagepub.com/doi/full/10.1177/0046958019838118">https://journals.sagepub.com/doi/full/10.1177/0046958019838118</a>.
\24\ A. Burman and S. Haeder, ``Directory Accuracy and Timely
Access in Maryland's Medicaid Managed Care Program,'' Journal of
Health Care for the Poor and Underserved, available at <a href="https://pubmed.ncbi.nlm.nih.gov/35574863/">https://pubmed.ncbi.nlm.nih.gov/35574863/</a>; A. Bauman and S. Haeder,
``Potemkin Protections: Assessing Provider Directory Accuracy and
Timely Access for Four Specialties in California,'' Journal of
Health Politics, Policy and Law, 2022, available at <a href="https://pubmed.ncbi.nlm.nih.gov/34847230/">https://pubmed.ncbi.nlm.nih.gov/34847230/</a>.
\25\ A. Ludomirsky, et. al., ``In Medicaid Managed Care
Networks, Care is Highly Concentrated Among a Small Percentage of
Physicians,'' Health Affairs, May 2022, available at <a href="https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2021.01747">https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2021.01747</a>.
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To add a greater level of validity and accuracy to States' efforts
to measure network adequacy and access, we propose to require States to
use secret shopper surveys as part of their monitoring activities.
Secret shopper surveys are a form of research that can provide high-
quality data and actionable feedback to States and managed care plans
and can be performed either as ``secret'' meaning the caller does not
identify who they are performing the survey for or ``revealed'' meaning
the caller identifies the entity for which they are performing the
survey. While both types of surveys can produce useful results, we
believe the best results are obtained when the survey is done as a
secret shopper and the caller pretends to be an enrollee (or their
representative) trying to schedule an appointment. Results from these
surveys should be unbiased, credible, and reflect what it is truly like
to be an enrollee trying to schedule an appointment, which is a
perspective not usually provided by, for example, time and distance
measures or provider-to-enrollee ratios. Many States and managed care
plans currently use some type of survey to monitor access; however, we
believe there should be some consistency to their use for Medicaid
managed care programs to enable comparability.
To ensure consistency, we propose a new Sec. 438.68(f), and
propose to require that States use independent entities to conduct
annual secret shopper surveys of managed care plan compliance with
appointment wait time standards proposed at Sec. 438.68(e) and the
accuracy of certain data in all managed care plans' electronic provider
directories required at Sec. 438.10(h)(1). These proposed changes
apply equally to separate CHIPs through existing cross-references at
Sec. Sec. 457.1218 and 457.1207. We believe that the entity that
conducts these surveys must be independent of the State Medicaid or
CHIP agency and its managed care plans subject to the survey to ensure
unbiased results. Therefore, at Sec. 438.68(f)(3)(i), we propose to
consider an entity to be independent of the State if it is not part of
the State Medicaid agency and, at Sec. 438.68(f)(3)(ii), to consider
an entity independent of a managed care plan subject to a secret
shopper survey if the entity is not an MCO, PIHP, or PAHP; is not owned
or controlled by any of the MCOs, PIHPs, or PAHPs subject to the
surveys; and does not own or control any of the MCOs, PIHPs, or PAHPs
subject to the surveys. Given the valuable data the proposed secret
shopper surveys could provide States, we believe requiring the use of
an independent entity to conduct the surveys would be critical to
ensure unbiased results.
We also propose to require States to use secret shopper surveys to
determine the accuracy of certain provider directory information in
MCOs', PIHPs', and PAHPs' most current electronic provider directories
at Sec. 438.68(f)(1)(i). Since we believe that paper directory usage
is dwindling due to the ever-increasing use of electronic devices and
because electronic directory files are usually used to produce paper
directories, we are not requiring secret shopper validation of paper
directories. Rather, we propose in Sec. 438.68(f)(1)(i)(A) through (C)
to require surveys of electronic provider directory data for primary
care providers, OB/GYN providers, and outpatient mental health and
substance use disorder providers, if they are included in the managed
care plan's provider directories. We are proposing these provider types
because they are the provider types with the highest utilization in
many Medicaid managed care programs.
To ensure that a secret shopper survey can be used to validate
directory data for every managed care plan, we propose in Sec.
438.68(f)(1)(i)(D) to require secret shopper surveys for provider
directory data for the provider type selected by the State for its
appointment wait time standards in Sec. 438.68(e)(1)(iv). We recognize
that the State-chosen provider type may vary across managed care plan
types and thus, States may have to select multiple provider types to
accommodate all of their managed care programs. For example, a State
may select a provider type from their MCOs' directories that is not a
provider type included in their mental health PIHP's directories; just
as the State may select a provider type from their behavioral health
PIHPs' directories that is not a provider type included in their dental
PAHPs' directories. We note that the State-chosen provider type cannot
vary among plans of the same type within the same managed care program.
Although this degree of variation between States would limit
comparability, we believe that the value of validating provider
directory data outweighs this limitation and that having results for
provider types that would be important to State specific access issues
would be a rich source of data for States to evaluate managed care plan
performance and require the impacted plan to implement timely
remediation, if needed.
At Sec. 438.68(f)(1)(ii)(A) through (D), we propose to require
that States use
[[Page 28102]]
independent entities to conduct annual secret shopper surveys to verify
the accuracy of four pieces of data in each MCO, PIHP, or PAHP
electronic provider directory required at Sec. 438.10(h)(1): the
active network status with the MCO, PIHP, or PAHP; the street address
as required at Sec. 438.10(h)(1)(ii); the telephone number as required
at Sec. 438.10(h)(1)(iii); and whether the provider is accepting new
enrollees as required at Sec. 438.10(h)(1)(vi). We believe these are
the most critical pieces of information that enrollees rely on when
seeking network provider information. Inaccuracies in this information
can have a tremendously detrimental effect on enrollees' ability to
access care since finding providers that are not in the managed care
plan's network, have inaccurate addresses and phone numbers, or finding
providers that are not accepting new patients listed in a plan's
directory can delay their ability to contact a network provider and
ultimately, receive care.
To maximize the value of using secret shopper surveys to validate
provider directory data, identified errors must be corrected as quickly
as possible. Therefore, at Sec. 438.68(f)(1)(iii) and (iv)
respectively, we propose that States must receive information on all
provider directory data errors identified in secret shopper surveys no
later than 3 business days from identification by the entity conducting
the secret shopper survey and that States must then send that data to
the applicable managed care plan within 3 business days of receipt. We
also propose in Sec. 438.68(f)(1)(iii) that the information sent to
the State must be ``sufficient to facilitate correction'' to ensure
that enough detail is provided to enable the managed care plans to
quickly investigate the accuracy of the data and make necessary
corrections. We note that States could delegate the function of
forwarding the information to the managed care plans to the entity
conducting the secret shopper surveys so that the State and managed
care plans receive the information at the same time. This would hasten
plans' receipt of the information as well as alleviate State burden. To
ensure that managed care plans use the data to update their electronic
directories, we propose at Sec. 438.10(h)(3)(iii) to require MCOs,
PIHPs, and PAHPs to use the information from secret shopper surveys
required at Sec. 438.68(f)(1) to obtain corrected information and
update provider directories no later than the timeframes specified in
Sec. 438.10(h)(3)(i) and (ii), and included in separate CHIP
regulations through an existing cross-reference at Sec. 457.1207.
While updating provider directory data after it has been counted as an
error in secret shopper survey results would not change a managed care
plan's compliance rate, it would improve provider directory accuracy
more quickly and thus, improve access to care for enrollees.
To implement section 5123 of the Consolidated Appropriations Act of
2023,\26\ we propose to revise Sec. 438.10(h)(1) by adding
``searchable'' before ``electronic form'' to require that managed care
plan electronic provider directories be searchable. We also propose to
add paragraph (ix) to Sec. 438.10(h)(1) to require that managed care
plan provider directories include information on whether each provider
offers covered services via telehealth. These proposals would align the
text in Sec. 438.10(h) with section 1932(a)(5) of the Act, as amended
by section 5123 of the Consolidated Appropriations Act of 2023. Section
5123 of the Consolidated Appropriations Act of 2023 specifies that the
amendments to section 1932(a)(5) of the Act will take effect on July 1,
2025; therefore, we propose that States would have to comply with the
revisions to Sec. 438.10(h)(1) and new (h)(1)(ix) by July 1, 2025.
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\26\ BILLS-117hr2617enr.pdf (<a href="http://congress.gov">congress.gov</a>).
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Our proposals for a secret shopper survey of provider directory
data proposed at Sec. 438.68(f)(1) are authorized by section
1932(a)(5)(B)(i) of the Act for Medicaid and through section 2103(f)(3)
of the Act for CHIP, which require each Medicaid MCO to make available
the identity, locations, qualifications, and availability of health
care providers that participate in their network. The authority for our
proposals is extended to PIHPs and PAHPs through regulations based on
our authority under section 1902(a)(4) of the Act. We propose that
secret shopper surveys include verification of certain providers'
active network status, street address, telephone number, and whether
the provider is accepting new enrollees; these directory elements
reflect the identity, location, and availability, as required for
Medicaid in section 1932(a)(5)(B)(i) of the Act and required for CHIP
through section 2103(f)(3) of the Act. Although the statute does not
explicitly include ``accurate'' to describe ``the identity, locations,
qualifications, and availability of health care providers,'' we believe
it is the intent of the text and therefore, utilizing secret shopper
surveys to identify errors in provider directories would help managed
care plans ensure the accuracy of the information in their directories.
Further, our proposal at Sec. 438.10(h)(3)(iii) for managed care plans
to use the data from secret shopper surveys to make timely corrections
to their directories would also be consistent with statutory intent to
reflect accurate identity, locations, qualifications, and availability
information. Secret shopper survey results would provide vital
information to help managed care plans fulfill their obligations to
make the identity, locations, qualifications, and availability of
health care providers that participate in the network available to
enrollees and potential enrollees.
We believe using secret shopper surveys could also be a valuable
tool to help States meet their enforcement obligations of appointment
wait time standards, required in Sec. 438.68(e). Secret shopper
surveys are perhaps the most commonly used tool to assess health care
appointment availability and can produce unbiased, actionable results.
At Sec. 438.68(f)(2), we propose to require States to determine each
MCO's, PIHP's, and PAHP's rate of network compliance with the
appointment wait time standards proposed in Sec. 438.68(e)(1). We also
propose in Sec. 438.68(f)(2)(i) that, after consulting with States and
other interested parties and providing public notice and opportunity to
comment, we may select additional provider types to be added to secret
shopper surveys of appointment wait time standards. We believe that
after reviewing States' assurances of compliance and accompanying
analyses of secret shopper survey results as proposed at Sec.
438.207(d), and through an existing cross-reference at Sec.
457.1230(b) for separate CHIP, we may propose additional provider types
be subject to secret shopper surveys in future rulemaking.
In section I.B.1.b. of this proposed rule, we explained that States
need to balance the use of telehealth with the availability of
providers that can provide in-person care and enrollees' preferences
for receiving care to ensure that they establish network adequacy
standards under Sec. 438.68(e) that accurately reflect the practical
use of telehealth and in-person appointments in their State. To ensure
that States reflect this, in Sec. 438.68(f)(2)(ii), we propose that
appointments offered via telehealth only be counted towards compliance
with appointment wait time standards if the provider also offers in-
person appointments and that telehealth visits offered during the
secret shopper survey be separately identified in the survey results.
We believe it would be appropriate to prohibit managed care plans from
meeting appointment wait time standards with telehealth
[[Page 28103]]
appointments alone and by separately identifying telehealth visits in
the results because this would help States determine if the type of
appointments being offered by providers is consistent with expectations
and enrollees' needs. We note that this proposal is consistent with the
requirement for QHPs beginning in 2024.\27\ Managed care encounter data
in Transformed Medicaid Statistical Information system (T-MSIS)
reflects that most care is still provided in-person and that use of
telehealth has quickly returned to near pre-pandemic levels. We believe
by explicitly proposing to limit the counting of telehealth visits to
meet appointment wait time standards, as well as the segregation of
telehealth and in-person appointment data, secret shopper survey
results would produce a more accurate reflection of what enrollees
actually experience when attempting to access care. We considered
aligning appointment wait times and telehealth visits with the process
used by MA for demonstrating overall network adequacy, which permits MA
organizations to receive a 10-percentage point credit towards the
percentage of beneficiaries residing within published time and distance
standards for the applicable provider specialty type and county when
the plan includes one or more telehealth providers that provide
additional telehealth benefits. However, we believe our proposal would
provide States and CMS with more definitive data to assess the use of
telehealth and enrollee preferences and would be the more appropriate
method to use at this time. We request comment on this proposal.
---------------------------------------------------------------------------
\27\ <a href="https://www.cms.gov/sites/default/files/2022-04/Final-2023-Letter-to-Issuers_0.pdf">https://www.cms.gov/sites/default/files/2022-04/Final-2023-Letter-to-Issuers_0.pdf</a>.
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Our proposal for secret shopper surveys of plans' compliance with
appointment wait time standards proposed at Sec. 438.68(f)(2) is
authorized by section 1932(b)(5) of the Act for Medicaid and through
section 2103(f)(3) of the Act for CHIP, because secret shopper surveys
could provide unbiased, credible, and representative data on how often
network providers are offering routine appointments within the State's
appointment wait time standards. This data should aid managed care
plans as they assess their networks, pursuant to Sec. 438.207(b), and
provide an assurance to States that their networks have the capacity to
serve the expected enrollment in their service area. States should find
the results of the secret shopper surveys a rich source of information
to assess compliance with the components of their quality strategy that
address access to care and determine whether covered services are
available within reasonable timeframes, as required in section
1932(c)(1)(A)(i) of the Act for Medicaid and section 2103(f)(3) of the
Act for CHIP.
It is critical that secret shopper survey results be obtained in an
unbiased manner using professional techniques that ensure objectivity.
To reflect this, we propose at Sec. 438.68(f)(3) that any entity that
conducts secret shopper surveys must be independent of the State
Medicaid agency and its managed care plans subject to a secret shopper
survey. In Sec. 438.68(f)(3)(i) and (ii), we propose the criteria for
an entity to be considered independent: Section 438.68(f)(3)(i)
proposes that an entity cannot be a part of any State governmental
agency to be independent of a State Medicaid agency and Sec.
438.68(f)(3)(ii) proposes that to be independent of the managed care
plans subject to the survey, an entity would not be an MCO, PIHP, or
PAHP, would not be owned or controlled by any of the MCOs, PIHPs, or
PAHPs subject to the surveys, and would not own or control any of the
MCOs, PIHPs, or PAHPs subject to the surveys. We propose to define
``independent'' by using criteria that is similar, but not as
restrictive, as the criteria used for independence of enrollment
brokers and specified at Sec. 438.810(b)(1). We believe this
consistency in criteria would make it easier for States to evaluate the
suitability of potential survey entities. We remind States that the
optional EQR activity at Sec. 438.358(c)(5) could be used to conduct
the secret shopper surveys proposed at Sec. 438.68(f) and for secret
shopper surveys conducted for MCOs, States may be able to receive
enhanced Federal financial participation (FFP), pursuant to Sec.
438.370.
Secret shopper surveys can be conducted in many ways, using varying
levels of complexity and gathering a wide range of information. We want
to give States flexibility to design their secret shopper surveys to
produce results that not only validate managed care plans' compliance
with provider directory data accuracy as proposed at Sec. 438.68(f)(1)
and appointment wait time standards at Sec. 438.68(f)(2), but also
provide States the opportunity to collect other information that would
assist them in their program monitoring activities and help them
achieve programmatic goals. To provide this flexibility, we are
proposing a limited number of methodological standards for the required
secret shopper surveys. In Sec. 438.68(f)(4), we propose that secret
shopper surveys would have to be completed for a statistically valid
sample of providers and: (1) use a random sample; and (2) include all
areas of the State covered by the MCO's, PIHP's, or PAHP's contract. We
believe these would be the most basic standards that all secret shopper
surveys would have to meet to produce useful results that enable
comparability between plans and among States. We propose in Sec.
438.68(f)(4)(iii) that secret shopper surveys to determine plan
compliance with appointment wait time standards would have to be
completed for a statistically valid sample of providers to be clear
that a secret shopper surveys must be administered to the number
providers identified as statistically valid for each plan. To ensure
consistency, equity, and context to the final compliance rate for each
plan, we believe it would be important that inaccurate provider
directory data not reduce the number of surveys administered.
Therefore, as a practical matter, if the initial data provided by a
State to the entity performing the survey does not permit surveys to be
completed for a statistically valid sample, the State would need to
provide additional data to enable completion of the survey for an
entire statistically valid sample. We do not believe this provision
would need to apply to secret shopper surveys of provider directory
data proposed in paragraph (f)(1) since the identification of incorrect
directory data is the intent of those surveys and should be reflected
in a plan's compliance rate.
Because we believe secret shopper survey results can produce
valuable data for States, managed care plans, enrollees and other
interested parties, we propose at Sec. 438.68(f)(5), that the results
of these surveys would be reported to CMS and posted on the State's
website. Specifically, at Sec. 438.68(f)(5)(i), we propose that the
results of the secret shopper surveys of provider directory data
validation at Sec. 438.68(f)(1) and appointment wait time standards at
Sec. 438.68(f)(2) would be reported to CMS annually using the content,
form, and submission times proposed in Sec. 438.207(d). At Sec.
438.68(f)(5)(ii), we propose that States post the results on the
State's website required at Sec. 438.10(c)(3) within 30 calendar days
of the State submitting them to CMS. We believe using the existing
report required at Sec. 438.207(d) would lessen burden on States,
particularly since we published the Network Adequacy and Access
Assurances Report template \28\ in July 2022 and are also developing an
electronic reporting portal to facilitate States' submissions. We
anticipate
[[Page 28104]]
revising the data fields in the Network Adequacy and Access Assurances
Report \29\ to include specific fields for secret shopper results,
including the provider type chosen by the State as required in Sec.
438.68(e)(1)(iv) and (f)(1)(i)(D). This proposal is authorized by
section 1902(a)(6) of the Act which requires that States provide
reports, in such form and containing such information, as the Secretary
may from time to time require.
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\28\ <a href="https://www.medicaid.gov/medicaid/managed-care/downloads/network-assurances-template.xlsx">https://www.medicaid.gov/medicaid/managed-care/downloads/network-assurances-template.xlsx</a>.
\29\ https://www.medicaid.gov/medicaid/managed-care/guidance/
medicaid-and-chip-managed-care-reporting/
index.html#NETWORK:~:text=Report.%20%C2%A0The%20current-
,excel%20template,-(XLSX%2C%20218.99%20KB.
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We recognize that implementing secret shopper surveys would be a
significant undertaking, especially for States not already using them;
but we believe that the data produced by successful implementation of
them would be a valuable addition to States' and CMS' oversight
efforts. As always, technical assistance would be available to help
States effectively implement and utilize secret shopper surveys. We
invite comment on the type of technical assistance that would be most
useful for States as well as States' best practices and lessons learned
from using secret shopper surveys.
We also propose that States would have to comply with Sec.
438.68(f) no later than the first MCO, PIHP, or PAHP rating period that
begins on or after 4 years after the effective date of the final rule.
d. Assurances of Adequate Capacity and Services--Provider Payment
Analysis (Sec. Sec. 438.207(b), 457.1230(b))
We believe there needs to be greater transparency in Medicaid and
CHIP provider payment rates in order for States and CMS to monitor and
mitigate payment-related access barriers. There is considerable
evidence that Medicaid payment rates, on average, are lower than
Medicare and commercial rates for the same services and that provider
payment influences access, with low rates of payment limiting the
network of providers willing to accept Medicaid patients, capacity of
those providers who do participate in Medicaid, and investments in
emerging technology among providers that serve large numbers of
Medicaid beneficiaries. However, there is no standardized,
comprehensive, cross-State comparative data source available to assess
Medicaid and CHIP payment rates across clinical specialties, health
plans, and States. Given that a critical component of building a
managed care plan network is payment, low payment rates can harm access
to care for Medicaid and CHIP enrollees in a number of ways. Evidence
suggests that low Medicaid physician fees limit physicians'
participation in the program, particularly for behavioral health and
primary care providers.<SUP>30 31</SUP> Relatedly, researchers have
found that increases in the Medicaid payment rates are directly
associated with increases in provider acceptance of new Medicaid
patients. In short, two key drivers of access--provider network size
and capacity--are inextricably linked with Medicaid provider payment
levels and acceptance of new Medicaid patients.<SUP>32 33</SUP> While
many factors affect provider participation, given the important role
rates play in assuring access, greater transparency is needed to
understand when and to what extent provider payment may influence
access in State Medicaid and CHIP programs to specific provider types
or for Medicaid and CHIP beneficiaries enrolled in specific plans.
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\30\ Holgash K, Heberlein M. Physician acceptance of new
Medicaid patients. Washington (DC): Medicaid and CHIP Payment and
Access Commission; 2019 Jan 24. Available from <a href="https://www.macpac.gov/wp-content/uploads/2019/01/Physician-Acceptance-of-New-Medicaid-Patients.pdf">https://www.macpac.gov/wp-content/uploads/2019/01/Physician-Acceptance-of-New-Medicaid-Patients.pdf</a>.
\31\ Zuckerman S, Skopec L, and Aarons J. Medicaid Physician
Fees Remained Substantially Below Fees Paid by Medicare in 2019.
Health Aff (Millwood). 2021;40(2). doi:10.1377/hlthaff.2020.00611.
\32\ National Bureau of Economic Research, ``Increased Medicaid
Reimbursement Rates Expand Access to Care,'' October 2019, available
at <a href="https://www.nber.org/bh-20193/increased-medicaid-reimbursement-rates-expand-access-care">https://www.nber.org/bh-20193/increased-medicaid-reimbursement-rates-expand-access-care</a>.
\33\ Zuckerman S, Skopec L, and Aarons J. Medicaid Physician
Fees Remained Substantially Below Fees Paid by Medicare in 2019.
Health Aff (Millwood). 2021;40(2). doi:10.1377/hlthaff.2020.00611.
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We also believe that greater transparency and oversight is
warranted as managed care payments have grown significantly as a share
of total Medicaid payments; in FY 2021, the Federal government spent
nearly $250 billion on payments to managed care plans.\34\ With this
growth, we seek to develop, use, and facilitate State use of data to
generate insights into important, provider rate related indicators of
access. Unlike fee-for-service (FFS) Medicaid and CHIP programs,
managed care plans generally have the ability to negotiate unique
reimbursment rates for individual providers. Generally, unless imposed
by States through a State directed payment or mandated by statute (such
as Federally qualified health centers payment requirements established
under section 1902(bb) of the Act), there are no Federal regulatory or
statutory minimum or maximum limits on the payment rates a managed care
plan can negotiate with a network provider. As such, there can be
tremendous variation among plans' payment rates, and we often do not
have sufficient visibility into those rates to perform analyses that
would promote a better understanding of how these rates are impacting
access. Section 438.242(c)(3) for Medicaid, and through cross-reference
at Sec. 457.1233(d) for separate CHIP, requires managed care plans to
submit to the State all enrollee encounter data, including allowed
amounts and paid amounts, that the State is required to report to CMS.
States are then required to submit those data to T-MSIS as required in
Sec. 438.818 for Medicaid, and through cross-reference at Sec.
457.1233(d) for separate CHIP. However, variation in the quantity and
quality of T-MSIS data, particularly for data on paid amounts, remains.
We believe that provider payment rates in managed care are inextricably
linked with provider network sufficiency and capacity and seek to
propose a process through which managed care plans must report, and
States must review and analyze, managed care payment rates to providers
as a component of States' responsibility to ensure network adequacy and
enrollee access consistent with State and Federal standards. Linking
payment levels to quality of care is consistent with a strategy that we
endorsed in our August 22, 2022 CIB \35\ urging States to link Medicaid
payments to quality measures to improve the safety and quality of care.
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\34\ Congressional Budget Office, ``Baseline Projections--
Medicaid,'' May 2022, available at <a href="https://www.cbo.gov/system/files/2022-05/51301-2022-05-medicaid.pdf">https://www.cbo.gov/system/files/2022-05/51301-2022-05-medicaid.pdf</a>.
\35\ <a href="https://www.medicaid.gov/federal-policy-guidance/downloads/cib08222022.pdf">https://www.medicaid.gov/federal-policy-guidance/downloads/cib08222022.pdf</a>.
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To ensure comparability in managed care plans' payment analyses, we
propose to require a payment analysis that managed care plans would
submit to States per Sec. 438.207(b)(3) and States would review and
include in the assurance and analysis to CMS per Sec. 438.207(d).
Specifically, we propose to replace the periods at the end of Sec.
438.207(b)(1) and (2) with semi-colons and add ``and'' after Sec.
438.207(b)(2) to make clear that (b)(1) through (3) would all be
required for Medicaid managed care, and for separate CHIP through an
existing cross-reference at Sec. 457.1230(b).
At Sec. 438.207(b)(3) for Medicaid, and for separate CHIP through
an existing cross-reference at Sec. 457.1230(b), we propose to require
that MCOs, PIHPs, and PAHPs submit annual documentation to the State
that demonstrates a payment analysis showing their level of payment for
certain services, if covered by the managed care plan's contract. We
[[Page 28105]]
propose that the analysis would use paid claims data from the immediate
prior rating period to ensure that all payments are captured, including
those that are negotiated differently than a plan's usual fee schedule.
We also believe it is important to use claims data to ensure that
utilization would be considered to prevent extremely high or low
payments from inappropriately skewing the results. We acknowledge that
paid claims data would likely not be complete within 180 days of the
end of a rating period, which is when this analyis is proposed to be
reported by the State in Sec. 438.207(d)(3)(ii). However, we believe
that the data would be sufficiently robust to produce a reasonable
percentage that reflects an appropriate weighting to each payment based
on actual utilization and could be provided to the State far enough in
advance of the State submitting its reporting to CMS to be
incorporated. We believe this analysis of payments would provide States
and CMS with vital information to assess the adequacy of payments to
providers in managed care programs, particularly when network
deficiencies or quality of care issues are identified or grievances are
filed by enrollees regarding access or quality.
In Sec. 438.207(b)(3)(i) for Medicaid, and for separate CHIP
through an existing cross-reference at Sec. 457.1230(b), we propose to
require that each MCO, PIHP, and PAHP would use paid claims data from
the immediate prior rating period to determine the total amount paid
for evaluation and management current procedural terminology (CPT)
codes for primary care, OB/GYN, mental health, and SUD services. Due to
the unique payment requirements in section 1902(bb) of the Act for
Federally qualified health centers and rural health clinics, we propose
in Sec. 438.207(b)(3)(iv) to exclude these provider types from the
analysis. We further propose that this analysis provide the percentage
that results from dividing the total amount the managed care plan paid
by the published Medicare payment rate for the same codes on the same
claims. Meaning, the payment analysis would reflect the comparison of
how much the managed care plan paid for the evaluation and managment
CPT codes to the published Medicare payment rates including claim-
specific factors such as provider type, geographic location where the
service was rendered, and the site of service. In Sec.
438.207(b)(3)(i)(A) for Medicaid, and for separate CHIP through an
existing cross-reference at Sec. 457.1230(b), we also propose that the
plans would include in the analysis separate total amounts paid and
separate comparison percentages to Medicare for primary care, OB/GYN,
mental health, and substance use disorder services for ease of analysis
and clarity. Lastly in Sec. 438.207(b)(3)(i)(B) for Medicaid, and for
separate CHIP through an existing cross-reference at Sec. 457.1230(b),
we propose that the percentages would have to be reported separately if
they differ between adult and pediatric services. We believe the
proposals in Sec. 438.207(b)(3)(i)(A) and (B) would ensure sufficient
detail in the data to enable more granular analysis across plans and
States as well as to prevent some data from obscuring issues with other
data. For example, if payments for adult primary care are significantly
lower than pediatric primary care, providing separate totals and
comparison percentages would prevent the pediatric data from
artificially inflating the adult totals and percentages. We believe
this level of detail would be necessary to prevent misinterpretation of
the data.
We propose in Sec. 438.207(b)(3)(ii) for Medicaid, and for
separate CHIP through an existing cross-reference at Sec. 457.1230(b),
to require that the payment analysis provide the total amount paid for
homemaker services, home health aide services, and personal care
services and the percentage that results from dividing the total amount
paid by the amount the State's Medicaid or CHIP FFS program would have
paid for the same claims. We propose two differences between this
analysis and the analysis in Sec. 438.207(b)(3)(i): first, this
analysis would use all codes for the services as there are no
evaluation and management CPT codes for these LTSS; and second, we
propose the comparison be to Medicaid or CHIP FFS payment rates, as
applicable, due to the lack of comparable Medicare rates for these
services. We propose these three services as we believe these have high
impact to help keep enrollees safely in the community and avoid
institutionalization. Again, we believe this analysis of payment rates
would be important to provide States and CMS with information to assess
the adequacy of payments to providers in managed care programs,
particularly when enrollees have grievances with services approved in
their care plans not being delivered or not delivered in the authorized
quantity. We request comment on whether in-home habilitation provided
to enrollees with IDD should be added to this analysis.
We believe that managed care plans could perform the analyses in
Sec. 438.207(b)(3)(i) and (ii) by: (1) Identifying paid claims in the
prior rating period for each required service type; (2) identifying the
appropriate codes and aggregating the payment amounts for the required
service types; and (3) calculating the total amount that would be paid
for the same codes on the claims at 100 percent of the appropriate
published Medicare rate, or Medicaid/CHIP FFS rate for the analysis in
Sec. 438.207(b)(3)(ii), applicable on the date of service. For the
aggregate percentage, divide the total amount paid (from 2. above) by
the amount for the same claims at 100 percent of the appropriate
published Medicare rate or Medicaid/CHIP FFS, as appropriate (from 3.
above). We believe this analysis would require a manageable number of
calculations using data readily available to managed care plans.
To ensure that the payment analysis proposed in paragraph (b)(3) is
appropriate and meaningful, we propose at Sec. 438.207(b)(3)(iii) for
Medicaid, and for separate CHIP through an existing cross-reference at
Sec. 457.1230(b), to exclude payments for claims for the services in
(b)(3)(i) for which the managed care plan is not the primary payer. A
comparison to payment for cost sharing only or payment for a claim for
which another payer paid a portion would provide little, if any, useful
information.
The payment analysis proposed at Sec. 438.207(b)(3) is authorized
by sections 1932(c)(1)(A)(ii) and 2103(f)(3) of the Act, which requires
States' quality strategies to include an examination of other aspects
of care and service directly related to the improvement of quality of
care. The authority for our proposals is extended to PIHPs and PAHPs
through regulations based on our authority under section 1902(a)(4) of
the Act. Because the proposed payment analysis would generate data on
each managed care plan's payment levels for certain provider types as a
percent of Medicare or Medicaid FFS rates, States could use the
analysis in their examination of other aspects of care and service
directly related to the improvement of quality of care, particularly
access. Further, sections 1932(c)(1)(A)(iii) and 2103(f)(3) of the Act
authorizes the proposals in this section as enabling States to compare
payment data among managed care plans in their program could provide
useful data to fulfill their obligations for monitoring and evaluating
quality and appropriateness of care.
We also propose to revise Sec. 438.207(f) to reflect that States
would have to comply with Sec. 438.207(b)(3) no later than the first
rating period that begins on or after 2 years after the effective date
[[Page 28106]]
of the final rule as we believe this is a reasonable timeframe for
compliance.
e. Assurances of Adequate Capacity and Services Reporting (Sec. Sec.
438.207(d), 457.1230(b))
Currently at Sec. 438.207(d), States are required to review the
documentation submitted by their managed care plans, as required at
Sec. 438.207(b), and then submit to CMS an assurance of their managed
care plans' compliance with Sec. Sec. 438.68 and 438.206. To make
States' assurances and analyses more comprehensive, we propose to
revise Sec. 438.207(d) to explicitly require States to include the
results from the secret shopper surveys proposed in Sec. 438.68(f)
(see section I.B.1.c. of this proposed rule) and included in separate
CHIP regulations through an existing cross-reference at Sec.
457.1230(b). We also propose to require States to include the payment
analysis proposed in Sec. 438.207(b)(3) (see section I.B.1.d. of this
proposed rule) to their assurance and analyses reporting. Additionally,
on July 6, 2022, we published a CIB \36\ that provided a reporting
template Network Adequacy and Access Assurances Report \37\ for the
reporting required at Sec. 438.207(d). To be clear that States would
have to use the published template, we propose to explicitly require
that States submit their assurance of compliance and analyses required
in Sec. 438.207(d) in the ``format prescribed by CMS.'' The published
template would fulfill this requirement as would future versions
including any potential electronic formats. We believe the revision
proposed in Sec. 438.207(d) would be necessary to ensure consistent
reporting to CMS and enable effective analysis and oversight. Lastly,
because we propose new requirements related to the inclusion of the
payment analysis and the timing of the submission of this reporting to
CMS, we propose to redesignate the last sentence in Sec. 438.207(d) as
Sec. 438.207(d)(1) and create a new Sec. 438.207(d)(2) and (3).
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\36\ <a href="https://www.medicaid.gov/federal-policy-guidance/downloads/cib07062022.pdf">https://www.medicaid.gov/federal-policy-guidance/downloads/cib07062022.pdf</a>.
\37\ <a href="https://www.medicaid.gov/medicaid/managed-care/downloads/network-assurances-template.xlsx">https://www.medicaid.gov/medicaid/managed-care/downloads/network-assurances-template.xlsx</a>.
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In Sec. 438.207(d)(2) for Medicaid and included in separate CHIP
regulations through an existing cross-reference at Sec. 457.1230(b),
we propose that the States' analysis required in Sec. 438.207(d)(1)
must include the payment analysis required of plans in Sec.
438.207(b)(3) and provide the elements specified in paragraphs
(d)(2)(i) and (ii). Specifically, Sec. 438.207(d)(2)(i) proposes to
require States to include the data submitted by each plan and Sec.
438.207(d)(2)(ii) proposes to require States to use the data from its
plans' reported payment analysis percentages and weight them using the
member months associated with the applicable rating period to produce a
Statewide payment percentage for each service type. We believe these
data elements would provide valuable new data to support States'
assurances of network adequacy and access and we would revise the
Network Adequacy and Access Assurances Report template published in
July 2022 to add fields for States to easily report these data. We
remind States that Sec. 438.66(a) and (b) require States to have a
monitoring system for all of their managed care programs and include
all aspects, including the performance of their managed care plans in
the areas of availability and accessibility of services, medical
management, provider network management, and appeals and grievances.
Accordingly, States should have ample data from their existing
monitoring activities and which would be supplemented by the proposal
requirements in this rule, to improve the performance of their managed
care programs for all covered services, as required in Sec. 438.66(c).
Because concerns around access to primary care, mental health, and SUD
services have been raised nationally, we expect States to review and
analyze their plans' data holistically to provide a robust,
comprehensive analysis of the adequacy of each plan's network and level
of realistic access and take timely action to address deficiencies.
Section 438.207(d) was codified in 2002 (67 FR 41010) as part of
the implementing regulations for section 1932(b)(5) of the Act
``Demonstration of Adequate Capacity and Services.'' In the 2016 final
rule, we made minor revisions to the language but did not address the
timing of States' submission of their assurance and analysis. Given the
July 2022 release of the Network Adequacy and Access Assurances Report
template for the assurance and analysis, we believe it would be
appropriate to clarify this important aspect of the reporting
requirement. To simplify the submission process and enable States and
CMS to allot resources most efficiently, we propose to establish
submission times in Sec. 438.207(d)(3)(i) through (iii) that
correspond to the times for managed care plans to submit documentation
to the State in Sec. 438.207(c)(1) through (3). Specifically for
Medicaid, we propose that States submit their assurance and analysis at
Sec. 438.207(d)(3): (1) at the time it submits a completed readiness
review, as specified at Sec. 438.66(d)(1)(iii); (2) on an annual basis
and no later than 180 calendar days after the end of each contract
year; and (3) any time there has been a significant change as specified
in Sec. 438.207(c)(3) and with the submission of the associated
contract. We also propose in Sec. 438.207(d)(3) that States must post
the report required in Sec. 438.207(d) on their website within 30
calendar days of submission to CMS. We believe the information in this
report would be important information for interested parties to have
access to on a timely basis and 30 calendar days seems adequate for
States to post the report after submitting.
Since we did not adopt the MCPAR requirements for separate CHIP
managed care in the 2016 final rule, we are also not adopting the
proposed submission timeframe at Sec. 438.207(d)(3)(i). However, we
propose for separate CHIPs to align with Medicaid for the proposed
network adequacy analysis submission timeframes at Sec.
438.207(d)(3)(ii) and (iii) through the existing cross-reference at
Sec. 457.1230(b).
In Sec. 438.207(e), we propose a conforming revision to add a
reference to the secret shopper evaluations proposed at Sec. 438.68(f)
as part of the documentation that States must make available to CMS,
upon request, and included in separate CHIP regulations through an
existing cross-reference at Sec. 457.1230(b). We believe this would be
necessary as the current text of Sec. 438.207(e) only addresses the
documentation provided by the managed care plans.
Sections 1932(b)(5) and 2103(f)(3) of the Act require Medicaid and
CHIP MCOs to demonstrate adequate capacity and services by providing
assurances to the State and CMS, as specified by the Secretary, that it
has the capacity to serve the expected enrollment in its service area,
including assurances that it offers an appropriate range of services
and access to preventive and primary care services for the population
expected to be enrolled in such service area, and maintains a
sufficient number, mix, and geographic distribution of providers of
services. The authority for our proposals is extended to PIHPs and
PAHPs through regulations based on our authority under section
1902(a)(4) of the Act. Our proposals to require States to include the
secret shopper surveys proposed in Sec. 438.68(f) as well as the
reimbursment analysis proposed in Sec. 438.207(b)(3) to their
assurance and analyses reporting proposed at Sec. 438.207(d) are
authorized by section 1932(b)(5) of the Act for Medicaid and
[[Page 28107]]
authorized for CHIP through section 2103(f)(3) of the Act because the
States' reports reflect the documentation and assurances provided by
their managed care plans of adequate capacity, an appropriate range of
services, and access to a sufficient number, mix, and geographic
distribution of network providers. Sections 1932(b)(5) and 2103(f)(3)
of the Act also require that the required assurances be submitted to
CMS in a time and manner determined by the Secretary; that information
is proposed in Sec. 438.207(d)(3)(i) through (iii) and corresponds to
the requirements for submission of documenation from managed care plans
in Sec. 438.207(c)(3).
We also propose to revise Sec. 438.207(g) to reflect that States
would have to comply with paragraph (d)(2) no later than the first
managed care plan rating period that begins on or after 2 years after
the effective date of the final rule and paragraph (d)(3) no later than
the first managed care plan rating period that begins on or after 1
year after the effective date of the final rule. We propose that States
would not be held out of compliance with the requirements of paragraphs
(e) of this section prior to the first MCO, PIHP, or PAHP rating period
that begins on or after 4 years after the effective date of the final
rule, so long as they comply with the corresponding standard(s)
codified in paragraph (e) contained in the 42 CFR, parts 430 to 481,
most recently published before the final rule. We propose that States
would have to comply with paragraph (f) no later than the first managed
care plan rating period that begins on or after 4 years after the
effective date of the final rule. We believe these are reasonable
timeframes for compliance given the level of new burden imposed by
each.
f. Remedy Plans To Improve Access (Sec. 438.207(f))
For FFS programs, we rely on Sec. 447.203(b)(8) to require States
to submit corrective action plans when access to care issues are
identified. Because of the numerous proposals in this rule that would
strengthen States' monitoring and enforcement of access requirements
and the importance of timely remediation of access issues, we believe
we should have a similar process set forth in part 438 for managed care
programs. In Sec. 438.68(e), we propose a process that would require
States to carefully develop and enforce their managed care plans' use
of appointment wait time standards to ensure access to care for
Medicaid managed care enrollees. As proposed in a new Sec. 438.207(f),
when the State, MCO, PIHP, PAHP, or CMS identifies any access issues,
including any access issues with the standards specified in Sec. Sec.
438.68 and 438.206, the State would be required to submit a plan to
remedy the access issues consistent with this proposal. If we determine
that an access issue revealed under monitoring and enforcement rises to
the level of a violation of access requirements under section
1932(c)(1)(A)(i) of the Act, as incorporated in section
1903(m)(2)(A)(xii) of the Act, we have the authority to disallow
Federal financial participation (FFP) for the payments made under the
State's managed care contract for failure to ensure adequate access to
care. We intend to closely monitor any State remedy plans that would be
needed under this proposal to ensure that both us and States would
adequately and appropriately address emerging access issues in Medicaid
managed care programs. Using Sec. 447.203(b)(8) as a foundation, we
propose to redesignate existing Sec. 438.207(f) as Sec. 438.207(g)
and propose a new requirement for States to submit remedy plans in new
Sec. 438.207(f), titled Remedy plans to improve access. In Sec.
438.207(f)(1), we propose that when the State, MCO, PIHP, PAHP, or CMS
identifies an issue with a managed care plan's performance with regard
to any State standard for access to care under this part, including the
standards at Sec. Sec. 438.68 and 438.206, States would follow the
steps set forth in paragraphs (i) through (iv). First, in paragraph
(1)(i), States would have to submit to CMS for approval a remedy plan
no later than 90 calendar days following the date that the State
becomes aware of an MCO's, PIHP's, or PAHP's access issue. We believe
90 calendar days would be sufficient time for States to effectively
assess the degree and impact of the issue and develop an effective set
of steps including timelines for implementation and completion, as well
as responsible parties. In Sec. 438.207(f)(1)(ii), we propose that the
State would have to develop a remedy plan to address the identified
issue that if addressed could improve access within 12 months and that
identifies specific steps, timelines for implementation and completion,
and responsible parties. We believe 12 months would be a reasonable
amount of time for States and their managed care plans to implement
actions to address the access issue and improve access to services by
enrollees of the MCO, PIHP, or PAHP. We do not propose to specify that
the remedy plan would be implemented by the managed care plans or the
State; rather, we propose that the remedy plan would identify the
responsible party required to make the access improvements at issue,
which would often include actions by both States and their managed care
plans. Additionally, we believe this proposal acknowledges that certain
steps that may be needed to address provider shortages can only be
implemented by States. For example, changing scope of practice laws to
enable more providers to fill gaps in access or joining interstate
compacts to enable providers to practice geographically due to the
opportunity to hold one multistate license valid for practice in all
compact States, streamlined licensure requirements, reduced expenses
associated with obtaining multiple single-State licenses, and the
creation of systems that enable electronic license application
processes. Lastly, in Sec. 438.207(f)(1)(ii), we propose some
approaches that States could consider to address the access issue, such
as increasing payment rates to providers, improving outreach and
problem resolution to providers, reducing barriers to provider
credentialing and contracting, providing for improved or expanded use
of telehealth, and improving the timeliness and accuracy of processes
such as claim payment and prior authorization.
We propose in Sec. 438.207(f)(1)(iii) to require States to ensure
that improvements in access are measurable and sustainable. We believe
it would be critical that the remedy plan produce measurable results in
order to monitor progress and, ultimately, bring about the desired
improvements in access under the managed care plan. We also propose
that the improvements in access achieved by the actions be sustainable
so that enrollees would be able to continue receiving the improved
access to care and managed care plans would continue to ensure its
provision. In paragraph (f)(1)(iv) of this section, we propose that
States submit quarterly progress updates to CMS on implementation of
the remedy plan so that we would be able to determine if the State was
making reasonable progress toward completion and that the actions in
the plan are effective. Not properly monitoring progress of the remedy
plan could significantly lessen the effectiveness of it and allow
missed opportunities to make timely revisions and corrections.
Lastly, in paragraph (f)(2) of this section we propose that if the
remedy plan required in paragraph (f)(1) of this section does not
address the managed care plan's access issue within 12 months, we may
require the State to continue to take steps to address the
[[Page 28108]]
issue for another 12 months and may require revision to the remedy
plan. We believe proposing that we be able to extend the duration of
actions to improve access and/or require the State to make revision to
the remedy plan would be critical to ensuring that the State's and
managed care plans' efforts are effective at addressing the identified
access issue.
These proposals are authorized by section 1902(a)(4)(A) of the Act,
which provides for methods of administration found necessary by the
Secretary for the proper and efficient operation of the plan as we
believe States taking timely action to address identified access issues
is fundamental and necessary to the operation of an effective and
efficient Medicaid program. The proposal for States to submit quarterly
progress reports is authorized by section 1902(a)(6) of the Act which
requires that States provide reports, in such form and containing such
information, as the Secretary may from time to time require. Lastly, we
believe these proposals are also authorized by section 1932(c)(1)(A)(i)
and (iii) of the Act which require States that contract with MCOs to
develop and implement a quality assessment and improvement strategy
that includes (and extended to PIHPs and PAHPs through regulations
based on our authority under section 1902(a)(4) of the Act): standards
for access to care so that covered services are available within
reasonable timeframes and in a manner that ensures continuity of care
and adequate primary care and specialized services capacity and
procedures for monitoring and evaluating the quality and
appropriateness of care and services to enrollees and requirements for
provision of quality assurance data to the State. Implementing timely
actions to address managed care plan access issues would be an integral
operational component of a State's quality assessment and improvement
strategy.
g. Transparency (Sec. Sec. 438.10(c), 438.602(g), 457.1207, 457.1285)
In the 2016 final rule, we finalized Sec. 438.10(c)(3) for
Medicaid, which is included in separate CHIP regulations through cross-
reference at Sec. 457.1207, which required States to operate a website
that provides specific information, either directly or by linking to
individual MCO, PIHP, PAHP, or PCCM entity websites. A State's website
may be the single most important resource for information about its
Medicaid program and there are multiple requirements for information to
be posted on a State's website throughout 42 CFR part 438. Current
regulations at Sec. 438.10(c)(6)(ii) require certain information to be
``prominent and readily accessible'' and Sec. 438.10(a) defines
``readily accessible'' as ``electronic information and services which
comply with modern accessibility standards such as section 508
guidelines, section 504 of the Rehabilitation Act, and W3C's Web
Content Accessibility Guidelines (WCAG) 2.0 AA and successor
versions.'' Despite these requirements, we have received input from
numerous and varied interested parties since the 2016 final rule about
how challenging it can be to locate regulatorily required information
on some States' websites.
There is variation in how ``user-friendly'' States' websites are,
with some States making navigation on their website fairly easy and
providing information and links that are readily available and
presenting required information on one page. However, we have not found
this to be the case for most States. Some States have the required
information scattered on multiple pages that requires users to click on
many links to locate the information they seek. While such websites may
meet the current minimum standards in part 438, they do not meet our
intent of providing one place for interested parties to look for all
required information. Therefore, we believe revisions are necessary to
ensure that all States' websites required by Sec. 438.10(c)(3) provide
a consistent and easy user experience. We acknowledge that building
websites is a complex and costly endeavor that requires consideration
of many factors, but we believe that States and managed care plans
share an obligation to build websites that quickly and easily meet the
needs of interested parties without undue obstacles. We note that State
and managed care plan websites must be compliant with civil rights
laws, including the Americans with Disabilities Act (ADA), section 504
of the Rehabilibation Act, Title VI of the Civil Rights Act of 1964,
and section 1557 of the Affordable Care Act. In this proposed rule, we
believe that there are several minimal qualities that all websites
should include, such as being able to:
<bullet> Function quickly and as expected by the user;
<bullet> Produce accurate results;
<bullet> Use minimal, logical navigation steps;
<bullet> Use words and labels that users are familiar with for
searches;
<bullet> Allow access, when possible, without conditions such as
establishment of a user account or password;
<bullet> Provide reasonably comparable performance on computers and
mobile devices;
<bullet> Provide easy access to assistance via chat; and
<bullet> Provide multilingual content for individuals with LEP.
We also believe that States and managed care plans should utilize
web analytics to track website utilization and inform design changes.
States should create a dashboard to regularly quantify website traffic,
reach, engagement, sticking points, and audience characteristics. Given
the critical role that websites fill in providing necessary and desired
program information, we believe proposing additional requirements on
States' websites are appropriate.
We acknowledge that States and managed care plans may have
information accessible through their websites that is not public
facing; for example, enrollee specific protected health information.
Proper security mechanisms should continue to be utilized to prevent
unauthorized access to non-public facing information, such as the
establishment of a user account and password or entry of other
credentials. Data security must always be a priority for States and
managed care plans and the proposals in Sec. 438.10(c)(3) in no way
diminish that obligation for States.
To increase the effectiveness of States' websites and add some
consistency to website users' experence, we propose in Sec.
438.10(c)(3) to revise ``websites'' to ``web pages'' in the reference
to managed care plans. We propose this change to clarify that if States
provide required content on their website by linking to individual MCO,
PIHP, PAHP, or PCCM entity websites, the link on the State's site would
have to be to the specific page that includes the requested
information. We believe this would prevent States from showing links to
a landing page for the managed care plan that then leaves the user to
start searching for the specific information needed. Next, we propose
to add ``States must:'' to paragraph (c)(3) before the items specified
in new (c)(3)(i) through (iv). In Sec. 438.10(c)(3)(i), we propose to
require that all information, or links to the information, required in
this part to be posted on the State's website, be available from one
page. We believe that when website users have to do repeated searches
or click through multiple pages to find information, they are more
likely to give up trying to locate it. As such, we have carefully
chosen the information that is required in 42 CFR part 438 to be posted
on States' websites to ensure effective
[[Page 28109]]
communication of information and believe it represents an important
step toward eliminating common obstacles for States' website users.
At Sec. 438.10(c)(3)(ii), we propose to require that States'
websites use clear and easy to understand labels on documents and links
so that users can easily identify the information contained in them. We
believe that using terminology and the reading grade level consistent
with that used in other enrollee materials, such as handbooks and
notices, would make the website more familiar and easy to read for
enrollees and potential enrollees. Similar to having all information on
one page, using clear labeling would reduce the likelihood of users
having to make unncessary clicks as they search for specific
information.
In Sec. 438.10(c)(3)(iii), we propose to require that States check
their websites at least quarterly to verify that they are functioning
as expected and that the information is the most currently available.
Malfunctioning websites or broken links can often render a website
completely ineffective, so monitoring a website's performance and
content is paramount. While we are proposing that a State's website be
checked for functionality and information timeliness no less than
quarterly, we believe this is a minimum standard and that States should
implement continual monitoring processes to ensure the accuracy of
their website's performance and content.
Lastly, in Sec. 438.10(c)(3)(iv), to enable maximum effectiveness
of States' websites, we propose to require that States' websites
explain that assistance in accessing the information is available at no
cost to them, including information on the availability of oral
interpretation in all languages and written translation in each
prevalent non-English language, alternate formats, auxiliary aids and
services, and a toll-free TTY/TDY telephone number. This proposal is
consistent with existing information requirements in Sec. 438.10(d)
and section 1557 of the Affordable Care Act. Clear provision of this
information would help to ensure that all users have access to States'
websites and can obtain assistance when needed.
The Medicaid managed care website transparency revisions proposed
at Sec. 438.10(c)(3)(i) through (iv) would apply to separate CHIP
through the existing cross-reference at Sec. 457.1207.
To help States monitor their website for required content, we
propose to revise Sec. 438.602(g) to contain a more complete list of
information. While we believe the list proposed in Sec. 438.602(g)
would help States verify their website's compliance, we clarify that a
requirement to post materials on a State's website in 42 CFR part 438
or any other Federal regulation but omitted from Sec. 438.602(g), is
still in full force and effect. Further, requirements on States to post
specific information on their websites intentionally remain throughout
42 CFR part 438 and are not replaced, modified, or superceded by the
items proposed in Sec. 438.602(g)(5) through (12). Currently Sec.
438.602(g) specifies four types of information that States must post on
their websites; we propose to add nine more as (g)(5) through (g)(13):
(5) enrollee handbooks, provider directories, and formularies required
at Sec. 438.10(g), (h), and (i); (6) information on rate ranges
required at Sec. 438.4(c)(2)(iv); (7) reports required at Sec. Sec.
438.66(e) and 438.207(d); (8) network adequacy standards required at
Sec. 438.68(b)(1) and (2), and (e); (9) secret shopper survey results
required at Sec. 438.68(f); (10) State directed payment evaluation
reports required in Sec. 438.6(c)(2)(v)(C); (11) links to all required
Application Programming Interfaces including as specified in Sec.
431.60(d) and (f); (12) quality related information required in
Sec. Sec. 438.332(c)(1), 438.340(d), 438.362(c) and 438.364(c)(2)(i);
and (13) documentation of compliance with requirements in subpart K--
Parity in Mental Health and Substance Use Disorder Benefits. Although
we are proposing to itemize these nine types of information in Sec.
438.602(g)(5) through (13), we note that all but the following three
are currently required to be posted on States' websites: the report at
Sec. 438.207(d), secret shopper survey results at Sec. 438.68(f), and
State directed payment evaluation reports at Sec. 438.6(c)(2)(v)(C).
Lastly, in Sec. 438.10(c)(3), we propose to make the list of website
content more complete by removing the current references to paragraphs
(g) through (i) only and including a reference to Sec. 438.602(g) and
``elsewhere in this part.''
We propose to revise Sec. 438.10(j) to reflect that States would
have to comply with Sec. 438.10(c)(3) no later than the first managed
care plan rating period that begins on or after 2 years after the
effective date of the final rule and that States would have to comply
with Sec. 438.10(d)(2) no later than the first managed care plan
rating period that begins on or after 3 years after the effective date
of the final rule. Lastly, we propose that States must comply with
Sec. 438.10(h)(3)(iii) no later than the first managed care plan
rating period that begins on or after 4 years after the effective date
of the final rule. We believe these proposed compliance dates would
provide reasonable time for compliance given the varying levels of
State and managed care plan burden.
We propose to add Sec. 438.602(j) to require States to comply with
Sec. 438.602(g)(5) through (13) no later than the first managed care
plan rating period that begins on or after 2 years after the effective
date of the final rule. We believe this is a reasonable timeframe for
compliance.
For separate CHIP managed care, we currently require States to
comply with the transparency requirements at Sec. 438.602(g) through
an existing cross-reference at Sec. 457.1285. We propose to align with
Medicaid in adopting most of the consolidated requirements for posting
on a State's website proposed at Sec. 438.602(g)(5) through (13) for
separate CHIP.
We propose to adopt the provision at Sec. 438.602(g)(5) (which
specifies that States must post enrollee handbooks, provider
directories, and formularies on the State's website) because
requirements at Sec. 438.10(g) through (i) are currently required for
separate CHIP through an existing cross-reference at Sec. 457.1207.
We do not plan to adopt the provision at Sec. 438.602(g)(6) (which
requires that States must post information on rate ranges on their
websites) because we do not regularly review rates for separate CHIP.
We propose to adopt the provision at Sec. 438.602(g)(7) (which
specifies that States must post their assurances of network adequacy on
the State's website) since the proposed network adequacy reporting at
Sec. 438.207(d) would apply to separate CHIP through an existing
cross-reference at Sec. 457.1230(b) (see section I.B.1.e. of this
proposed rule). Since we did not adopt the managed care program annual
reporting requirements at Sec. 438.66(e) for separate CHIP, we propose
to exclude this reporting requirement at Sec. 457.1230(b).
We propose to adopt the provision at Sec. 438.602(g)(8) (which
requires State network adequacy standards to be posted on the State's
website) for separate CHIP because we propose to adopt the new
appointment wait time reporting requirements through an existing cross-
reference at Sec. 457.1230(b) (see section I.B.1.e. of this proposed
rule), though we propose to exclude references to LTSS as not
applicable to separate CHIP.
We propose to adopt the provision at Sec. 438.602(g)(9) (which
specifies that States must post secret shopper survey results on the
State's website) for separate CHIP network access reporting to align
with our proposed adoption of
[[Page 28110]]
secret shopper reporting at Sec. 438.68(f) through an existing cross-
reference at Sec. 457.1218 (see section I.B.1.c. of this proposed
rule).
We do not propose to adopt the provision at Sec. 438.602(g)(10)
(which directs States to post SDP evaluation reports on the State's
website) because State directed payments are not applicable to separate
CHIP.
We propose to adopt the provision at Sec. 438.602(g)(11) (which
specifies that States must post required information for Application
Programming Interfaces on the State's website) given the existing
requirements at Sec. 457.1233(d).
We propose to adopt the provision at Sec. 438.602(g)(12) (which
requires States to post quality-related information on the State's
website) for separate CHIP as required through cross-references at
Sec. 457.1240(c) and (e), as well as the applicable EQR report through
a cross-reference at Sec. 457.1250(a). However, we propose to exclude
the reference to Sec. 438.362(c) since MCO EQR exclusion is not
applicable to separate CHIP.
We propose to adopt the provision at Sec. 438.602(g)(13) (which
requires States to post documentation of compliance with parity in
mental health and substance use disorder benefits on the State's
website) for separate CHIP through the existing cross-reference at
Sec. 457.1285. However, we propose to replace the reference to subpart
K of part 438 with CHIP parity requirements at Sec. 457.496 in
alignment with contract requirements at Sec. 457.1201(l).
We propose to amend Sec. 457.1285 to state, the State must comply
with the program integrity safeguards in accordance with the terms of
subpart H of part 438 of this chapter, except that the terms of
Sec. Sec. 438.66(e), 438.362(c), 438.602(g)(6) and (10), 438.604(a)(2)
and 438.608(d)(4) and references to LTSS of this chapter do not apply
and that references to subpart K under part 438 should be read to refer
to parity requirements at Sec. 457.496.
Our proposals for requirements for States' websites at Sec.
438.10(c)(3) and the list proposed in Sec. 438.602(g) are authorized
by sections 1932(a)(5)(A) and 2103(f)(3) of the Act for Medicaid and
which require each State, enrollment broker, or managed care entity to
provide all enrollment notices and informational and instructional
materials in a manner and form which may be easily understood by
enrollees and potential enrollees. The authority for our proposals is
extended to PIHPs and PAHPs through regulations based on our authority
under section 1902(a)(4) of the Act. We believe that our proposals
would make States' websites easier to use by incorporating easily
understood labels, having all information accessible from one page,
verifying the accurate functioning of the site, and clearly explaining
the availability of assistance--all of which would directly help States
fulfill their obligation to provide informational materials in a manner
and form which may be easily understood.
h. Terminology (Sec. Sec. 438.2, 438.3(e), 438.10(h), 438.68(b),
438.214(b))
Throughout 42 CFR part 438, we use ``behavioral health'' to mean
mental health and SUD. However, it is an imprecise term that does not
capture the full array of conditions that are intended to be included,
and some in the SUD treatment community have raised concerns with its
use. It is important to use clear, unambiguous terms in regulatory
text. Therefore, we propose to change ``behavioral health'' throughout
42 CFR part 438 as described here. In the definition of PCCM entity at
Sec. 438.2 and for the provider types that must be included in
provider directories at Sec. 438.10(h)(2)(iv), we propose to replace
``behavioral health'' with ``mental health and substance use
disorder;'' for the provider types for which network adequacy standards
must be developed in Sec. 438.68(b)(1)(iii), we propose to remove
``behavioral health'' and the parentheses; and for the provider types
addressed in credentialing policies at Sec. 438.214(b), we propose to
replace ``behavioral'' with ``mental health.'' We also propose in the
definition of PCCM entity at Sec. 438.2 to replace the slash between
``health systems'' and ``providers'' with ``and'' for grammatical
accuracy.
Similarly, we also propose to change ``psychiatric'' to ``mental
health'' in Sec. 438.3(e)(2)(v) and Sec. 438.6(e). We believe that
``psychiatric'' does not capture the full array of services that can be
provided by IMDs.
These proposals are authorized by section 1902(a)(4)(A) of the Act,
which provides for methods of administration found necessary by the
Secretary for the proper and efficient operation of the plan, because
use of clear, unambiguous terms in regulatory text is imperative for
proper and efficient operation of the plan.
2. State Directed Payments (42 CFR 438.6, 438.7, 430.3)
a. Background
Section 1903(m)(2)(A) of the Act requires contracts between States
and MCOs to provide payment under a risk-based contract for services
and associated administrative costs that are actuarially sound. CMS has
historically used our authority under section 1902(a)(4) of the Act to
apply the same requirements to contracts between States and PIHPs or
PAHPs. Under risk-based managed care arrangements with the State,
Medicaid managed care plans have the responsibility to negotiate
payment rates with providers. Subject to certain exceptions, States are
generally not permitted to direct the expenditures of a Medicaid
managed care plan under the contract between the State and the plan or
to make payments to providers for services covered under the contract
between the State and the plan (Sec. Sec. 438.6 and 438.60,
respectively). However, there are circumstances in which a State may
believe that requiring managed care plans to make specified payments to
health care providers is an important tool in furthering the State's
overall Medicaid program goals and objectives; for example, funding to
ensure certain minimum payments are made to safety net providers to
ensure access to care, funding to enhance behavioral health care
providers as mandated by State legislative directives, or funding for
quality payments to ensure providers are appropriately rewarded for
meeting certain program goals. Because this type of State direction
reduces the plan's ability to effectively manage costs, CMS, in the
2016 final rule, established specific exceptions to the general rule
prohibiting States from directing the expenditures of MCOs, PIHPs and
PAHPs at Sec. 438.6(c)(1)(i) through (iii). These exceptions came to
be known as State directed payments (SDPs).
The current regulations at Sec. 438.6(c) specify the parameters
for how and when States may direct the expenditures of their Medicaid
managed care plans and the associated requirements and prohibitions on
such arrangements. Permissible SDPs include directives that certain
providers of the managed care plan participate in value-based
purchasing (VBP) models, that certain providers participate in multi-
payer or Medicaid-specific delivery system reform or performance
improvement initiatives, or that the managed care organization adhere
to certain fee schedule requirements (for example, minimum fee
schedules, maximum fee schedules, and uniform dollar or percentage
increases). Among other requirements, Sec. 438.6(c) requires SDPs to
be based on the utilization and delivery of services under the managed
care contract and expected to advance at least one of the objectives in
the State's managed care quality strategy.
All SDPs must be included in all applicable managed care
contract(s) and described in all applicable rate certification(s) as
noted in Sec. 438.7(b)(6).
[[Page 28111]]
Further, Sec. 438.6(c)(2)(ii) requires that most SDPs be approved in
writing prior to implementation.\38\ To obtain written prior approval,
States must submit a ``preprint'' form to CMS to document how the SDP
complies with the Federal requirements outlined in Sec. 438.6(c).\39\
States must obtain written approval of certain SDPs in order for CMS to
approve the corresponding Medicaid managed care contract(s) and rate
certifications(s). States were required to comply with this prior
approval requirement for SDPs no later than the rating period for
Medicaid managed care contracts starting on or after July 1, 2017.
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\38\ State directed payments that are minimum fee schedules for
network providers that provide a particular service under the
contract using State plan approved rates as defined in Sec.
438.6(a) are not subject to the written prior approval requirement
at Sec. 438.6(c)(2)(ii); however, they must comply with the
requirements currently at Sec. 438.6(c)(2)(ii)(A) through (F)
(other than the requirement for prior written approval) and be
appropriately documented in the managed care contract(s) and rate
certification(s).
\39\ <a href="https://www.medicaid.gov/medicaid/managed-care/downloads/sdp-4386c-preprint-template.pdf">https://www.medicaid.gov/medicaid/managed-care/downloads/sdp-4386c-preprint-template.pdf</a>.
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Each SDP preprint submitted to CMS is reviewed by a Federal review
team to ensure that the payments comply with the regulatory
requirements in Sec. 438.6(c) and other applicable law. The Federal
review team consists of subject matter experts from various components
and groups within CMS, which regularly include those representing
managed care policy and operations, quality, and actuarial science.
Over time, these reviews have expanded to include subject matter
experts on financing of the non-Federal share and demonstration
authorities when needed. The CMS Federal review team works diligently
to ensure a timely review and that standard operating procedures are
followed for a consistent and thorough review of each preprint. Most
preprints are reviewed on an annual basis; SDPs that are for VBP
arrangements, delivery system reform, or performance improvement
initiatives and that meet additional criteria in the Federal
regulations are eligible for multi-year approval.
CMS has issued guidance to States regarding SDPs on multiple
occasions. In November 2017, CMS published the initial preprint form
\40\ along with guidance for States on the use of SDPs.\41\ In May
2020, CMS published guidance on managed care flexibilities to respond
to the COVID-19 public health emergency (PHE), including how States
could use SDPs in support of their COVID-19 response efforts.\42\ In
January 2021, CMS published additional guidance for States to clarify
existing policy, and also issued a revised preprint form that States
must use for rating periods beginning on or after July 1, 2021.\43\ The
revised preprint form is more comprehensive compared to the initial
preprint, and it is designed to systematically collect the information
that CMS identified as necessary as part of our review of SDPs to
ensure compliance with the Federal regulatory requirements.\44\ This
includes identification of the estimated total dollar amount for the
SDP, an analysis of provider reimbursement rates for the class(es) of
providers that the SDP is targeting, and information about the sources
of the non-Federal share used to finance the SDP.
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\40\ <a href="https://www.medicaid.gov/sites/default/files/2020-02/438-preprint.pdf">https://www.medicaid.gov/sites/default/files/2020-02/438-preprint.pdf</a>.
\41\ <a href="https://www.medicaid.gov/sites/default/files/federal-policy-guidance/downloads/cib11022017.pdf">https://www.medicaid.gov/sites/default/files/federal-policy-guidance/downloads/cib11022017.pdf</a>.
\42\ <a href="https://www.medicaid.gov/sites/default/files/Federal-Policy-Guidance/Downloads/cib051420.pdf">https://www.medicaid.gov/sites/default/files/Federal-Policy-Guidance/Downloads/cib051420.pdf</a>.
\43\ <a href="https://www.medicaid.gov/Federal-Policy-Guidance/Downloads/smd21001.pdf">https://www.medicaid.gov/Federal-Policy-Guidance/Downloads/smd21001.pdf</a>.
\44\ <a href="https://www.medicaid.gov/medicaid/managed-care/downloads/sdp-4386c-preprint-template.pdf">https://www.medicaid.gov/medicaid/managed-care/downloads/sdp-4386c-preprint-template.pdf</a>.
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Since Sec. 438.6(c) was issued in the 2016 final rule, States have
requested approval for an increasing number of SDPs. The scope, size,
and complexity of the SDP arrangements submitted by States for approval
has also grown steadily and quickly. In calendar year 2017, CMS
received 36 preprints for our review and approval from 15 States. In
contrast, in calendar year 2021, CMS received 223 preprints from 39
States. For calendar year 2022, CMS received 298 preprints from States.
In total, as of December 2022, CMS has reviewed more than 1,100 SDP
proposals and approved 993 proposals since the 2016 final rule was
issued.\45\
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\45\ The number of proposals includes initial preprints,
renewals and amendments. An individual SDP program could represent
multiple SDP proposals as described here (that is, an initial
application, 1 renewal, and 3 amendments).
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SDPs also represent a notable amount of spending. The Medicaid and
CHIP Payment and Access Commission (MACPAC) reported that CMS approved
SDP arrangements in 37 States, with spending exceeding more than $25
billion in 2020.\46\ The U.S. Government Accountability Office (GAO)
also reported that at least $20 billion has been approved by CMS for
preprints with payments to be made on or after July 1, 2021, across 79
approved preprints.\47\ Our internal analysis of all SDPs approved from
when Sec. 438.6(c) was issued in the 2016 final rule through March
2022 estimates that the total spending for each SDP approved for the
most recent rating period for States is nearly $48 billion \48\
(Federal and State) with at least half being dollars that States are
requiring be paid in addition to the rates negotiated between the plans
and providers. The aforementioned nearly $48 billion is an annual
figure.\49\
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\46\ Medicaid and CHIP Payment and Access Commission, ``Report
to Congress on Medicaid and CHIP,'' June 2022, available at <a href="https://www.macpac.gov/wp-content/uploads/2022/06/MACPAC_June2022-WEB-Full-Booklet_FINAL-508-1.pdf">https://www.macpac.gov/wp-content/uploads/2022/06/MACPAC_June2022-WEB-Full-Booklet_FINAL-508-1.pdf</a>. Projected payment amounts are for the most
recent rating period, which may differ from calendar year or fiscal
year 2020.
\47\ U.S. Government Accountability Office, ``Medicaid: State
Directed Payments in Managed Care,'' June 28, 2022, available at
<a href="https://www.gao.gov/assets/gao-22-105731.pdf">https://www.gao.gov/assets/gao-22-105731.pdf</a>.
\48\ This data point is an estimate and reflective of the most
recent approval for all unique payment arrangements that have been
approved through March 31, 2022 under CMS' standard review process.
Rating periods differ by State; some States operating their managed
care programs on a calendar year basis while others operate on a
State fiscal year basis, which most commonly is July to June. The
most recent rating period for which the SDP was approved as of March
2022 also varies based on the review process reflective of States
submitting proposals later than recommended (close to or at the end
of the rating period), delays in State responses to questions, and/
or reviews taking longer due to complicated policy concerns (for
example, financing).
\49\ As part of the revised preprint form, States are asked to
identify if the payment arrangement requires plans to pay an amount
in addition to negotiated rates vs. limiting or replacing negotiated
rates. Approximately half of the total dollars identified for the
SDP actions included were identified by States for payment
arrangements that required plans to pay an amount in addition to the
rates negotiated between the plan and provider(s) rates.
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As the volume of SDP preprint submissions and total dollars flowing
through SDPs continues to increase, CMS recognizes the importance of
ensuring that SDPs are contributing to Medicaid quality goals and
objectives as part of our review process, as well as ensuring that SDPs
are developed and implemented with appropriate fiscal and program
integrity guardrails. The proposed changes in this notice of proposed
rulemaking are intended to ensure the following policy goals:
(1) Medicaid managed care enrollees receive access to high-quality
care under SDP payment arrangements;
(2) SDPs are appropriately linked to Medicaid quality goals and
objectives for the providers participating in the SDP payment
arrangements; and
(3) CMS and States have the appropriate fiscal and program
integrity guardrails in place to strengthen the accountability and
transparency of SDP payment arrangements.
We are issuing this proposal based on our authority to interpret
and implement section 1903(m)(2)(A)(iii) of the Act, which requires
contracts between States and MCOs to provide
[[Page 28112]]
payment under a risk-based contract for services and associated
administrative costs that are actuarially sound and our authority under
section 1902(a)(4) of the Act to establish methods of administration
for Medicaid that are necessary for the proper and efficient operation
of the State plan. As explained in the 2016 final rule, regulation of
SDPs is necessary to ensure that Medicaid managed care plans have
sufficient discretion to manage the risk of covering the benefits
outlined in their contracts, which is integral to ensuring that
capitation rates are actuarially sound as defined in Sec. 438.4 (81 FR
27582). We have historically relied on section 1902(a)(4) of the Act to
extend the same requirements adopted under section 1903(m)(2)(A)(iii)
of the Act for MCOs related to actuarially sound capitation rates to
PIHPs and PAHPs. Where a proposal is also based on interpreting and
implementing other authority, we note that in the applicable
explanation of the proposed policy.
We did not adopt the Medicaid managed care SDP requirements
described at Sec. 438.6 in the 2016 final rule for separate CHIPs
because there was no statutory requirement to do so and we wished to
limit the scope of new regulations and administrative burden on
separate CHIP managed care plans. For similar reasons, we are not
proposing to adopt the new Medicaid managed care SDP requirements
proposed at Sec. Sec. 438.6 and 438.7 for separate CHIPs.
We are proposing to define State directed payments as a contract
arrangement that directs an MCO's, PIHP's, or PAHP's expenditures under
paragraphs (c)(1)(i) through (iii) of this section. We are proposing
this definition as it is currently used by States and CMS in standard
interactions as well as in published guidance to describe these
contract requirements. Defining this term also improves the readability
of the related regulations. We have also proposed to rename the header
for this section to ``State Directed Payments under MCO, PIHP, or PAHP
contracts'' reflect this term.
In addition, we are proposing several revisions to Sec. 438.6 to
further specify and add to the existing requirements and standards for
SDPs. First, we are proposing revisions, including: expanding the scope
of Sec. 438.6(c) consistent with recent guidance; exempting SDPs that
establish payment rate minimums at 100 percent of the Medicare rate
from written prior approval; incorporating SDPs for non-network
providers in certain circumstances; setting new procedures and
timeframes for the submission of SDPs and related documentation;
codifying and further specifying standards and documentation
requirements on total payment rates; further specifying and
strengthening existing requirements related to financing as well as the
connection to the utilization and delivery of services; updating and
providing flexibilities for States to pursue VBP through managed care;
strengthening evaluation requirements and other areas; and addressing
how SDPs are incorporated into capitation rates or reflected in
separate payment terms. The proposed regulatory provisions include both
new substantive standards and new documentation and contract term
requirements. In addition, we are proposing a new appeal process for
States that are dissatisfied with CMS's determination related to a
specific SDP preprint and new oversight and monitoring standards. In
recognition of the scope of changes we are proposing, some of which
will require significant time for States to implement, we are proposing
a series of applicability dates over a roughly 5-year period for
compliance. These applicability dates are discussed later in section
I.B.2.p. of this proposed rule.
We solicit feedback on our proposals.
A more detailed outline of the remaining parts of this section is
provided below:
b. Contract Requirements Considered to be SDPs (Grey Area Payments)
c. Medicare Exemption, SDP Standards and Prior Approval (Sec.
438.6(c)(1)(iii)(B), (c)(2), and (c)(5)(iii)(A)(5))
d. Non-Network Providers (Sec. 438.6(c)(1)(iii))
e. SDP Submission Timeframes (Sec. 438.6(c)(2)(viii) and (ix))
f. Standard for Total Payment Rates for each SDP, Establishment of
Payment Rate Limitations for certain SDPs and Expenditure Limit for All
SDPs (Sec. 438.6(c)(2)(ii)(I) and (c)(2)(iii))
g. Financing (Sec. 438.6(c)(2)(ii)(G) and (H))
h. Tie to Utilization and Delivery of Services for Fee Schedule
Arrangements (Sec. 438.6(c)(2)(vii))
i. Value-Based Payments and Delivery System Reform Initiatives (Sec.
438.6(c)(2)(vi))
j. Quality and Evaluation (Sec. 438.6(c)(2)(ii)(D) and (F), (c)(2)(iv)
and (v), and (c)(7))
k. Contract Term Requirements (Sec. 438.6(c)(5))
l. Including SDPs in Rate Certifications and Separate Payment Terms
(Sec. Sec. 438.6(c)(2)(ii)(J), (c)(6), and 438.7(f))
m. SDPs included through Adjustments to Base Capitation Rates (Sec.
438.7(c)(4) through (6))
n. Appeals (Sec. 430.3(d))
o. Reporting Requirements to Support Oversight (Sec. 438.6(c)(4))
p. Applicability Dates (Sec. 438.6(c)(4), 438.6(c)(8), and 438.7(g)(2)
and (3))
b. Contract Requirements Considered To Be SDPs (Grey Area Payments)
Under Sec. 438.6(c), States are not permitted to direct the
expenditures of a Medicaid managed care plan under the contract between
the State and the plan unless it is an SDP that complies with Sec.
438.6(c), is permissible in a specific provision under Title XIX, is
permissible through an implementing regulation of a Title XIX provision
related to payments to providers, or is a permissible pass-through
payment that meets requirements in Sec. 438.6(d). States are also not
permitted to make payments directly to providers for services covered
under the contract between the State and a managed care plan as
specified in Sec. 438.60.
In our November 2017 CMCS Informational Bulletin (CIB) entitled
``Delivery System and Provider Payment Initiatives under Medicaid
Managed Care Contracts,'' we noted instances where States may include
general contract requirements for provider payments that would not be
subject to approval under Sec. 438.6(c) as long as the State was not
mandating a specific payment methodology or amounts under the
contract.\50\ We also noted that these types of contract requirements
would not be pass-through payments subject to the requirements under
Sec. 438.6(d), as we believed they maintained a link between payment
and the delivery of services. One scenario in the CIB described
contract language generally requiring managed care plans to make 20
percent of their provider payments as VBP or alternative payment
arrangements when the State does not mandate a specific payment
methodology and the managed care plan retains the discretion to
negotiate with network providers the specific terms for the amount,
timing, and mechanism of such VBP or alternative payment arrangements.
We continue to believe that this scenario does not meet the criteria
for an SDP nor a pass-through payment but as our thinking has evolved,
we believe that the aforementioned VBP scenario represents the State
imposing a quality metric on the managed care plans rather than the
providers. We believe that this specific
[[Page 28113]]
type of contractual condition and measure of plan accountability is
permissible, so long as it meets the requirements for an incentive
arrangement under Sec. 438.6(b)(2) or, a withhold arrangement under
Sec. 438.6(b)(3).
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\50\ <a href="https://www.medicaid.gov/federal-policy-guidance/downloads/cib11022017.pdf">https://www.medicaid.gov/federal-policy-guidance/downloads/cib11022017.pdf</a>.
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The other scenario described the State contractually implementing a
general requirement for Medicaid managed care plans to increase
provider payment for covered services provided to Medicaid enrollees
covered under the contract, where the State did not mandate a specific
payment methodology or amount(s) and managed care plans retain the
discretion for the amount, timing, and mechanism for making such
provider payments. At the time, we believed that these areas of
flexibility for the plan would be sufficient to exclude the State's
contract requirement from the scope of Sec. 438.6(c). However, as we
have continued to review managed care contracts and rate certifications
since November 2017, we have grown increasingly concerned that
excluding the latter type of vague contractual requirement for
increased provider payment from the requirements of Sec. 438.6(c)
created an unintended loophole in regulatory oversight, presenting a
significant program integrity risk. For example, some States include
general contract requirements for significant increases to provider
payments that require the State to add money to the capitation rates
paid to the managed care plans as part of rate development for a
specific service (for example, hospital services) but without any
further accountability to ensure that the additional funding included
in the capitation payments is paid to providers for a specific service
or benefit provided to a specific enrollee covered under the contract.
While this is similar to the definition of pass-through payment in
Sec. 438.6(a), these contractual requirements do not meet all of the
other requirements in Sec. 438.6(d) to be permissible pass-through
payments. We commonly refer to these types of contractual arrangements
as ``grey area payments'' as they do not completely comply with Sec.
438.6(c) nor Sec. 438.6(d).
Upon reflection and based on our experience since the 2017 CIB, we
concluded that general contractual requirements to increase provider
payment rates circumvent the intent of the 2016 final rule and the
subsequent 2017 Pass-Through Payment Final Rule to improve the fiscal
integrity of the program and ensure the actuarial soundness of all
capitation rates.\51\ As we stated in the preamble of the 2016 final
rule ``[w]e believe that the statutory requirement that capitation
payments to managed care plans be actuarially sound requires that
payments under the managed care contract align with the provision of
services to beneficiaries covered under the contract. . . . In our
review of managed care capitation rates, we have found pass-through
payments being directed to specific providers that are generally not
directly linked to delivered services or the outcomes of those
services. These pass-through payments are not consistent with
actuarially sound rates and do not tie provider payments with the
provision of services.'' Further, ``[a]s a whole, [42 CFR] Sec.
438.6(c) maintains the MCO's, PIHP's, or PAHP's ability to fully
utilize the payment under that contract for the delivery and quality of
services by limiting States' ability to require payments that are not
directly associated with services delivered to enrollees covered under
the contract.''
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\51\ <a href="https://www.federalregister.gov/documents/2017/01/18/2017-00916/medicaid-program-the-use-of-new-or-increased-pass-through-payments-in-medicaid-managed-care-delivery">https://www.federalregister.gov/documents/2017/01/18/2017-00916/medicaid-program-the-use-of-new-or-increased-pass-through-payments-in-medicaid-managed-care-delivery</a>.
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In January 2021, we published SMDL #21-001,\52\ through which we
sought to close the unintentional loophole created in the November 2017
CIB and realign our implementation of the regulation with the original
intent of the 2016 final rule and the 2017 final rule. The 2021 SMDL
provides that if a State includes a general contract requirement for
provider payment that provides for or adds an amount to the provider
payment rates, even without directing the specific amount, timing or
methodology for the payments, and the provider payments are not clearly
and directly linked specifically to the utilization and delivery of a
specific service or benefit provided to a specific enrollee, then CMS
will require the contractual requirement to be modified to comply with
Sec. 438.6(c) or (d) beginning with rating periods that started on or
after July 1, 2021. We maintain this interpretation. At this time, we
also believe it is important to further specify our stance that any
State direction of a managed care plan's payments to providers,
regardless of specificity or even if tied specifically to utilization
and delivery of services, is prohibited unless Sec. 438.6(c) or (d)
permits the arrangement. State wishing to impose quality requirements
or thresholds on managed care plans, such as the requirement that a
certain percentage of provider payments be provided through a VBP
arrangement, must do so within the parameters of Sec. 438.6(b). We do
not believe any changes are needed to the regulation text in Sec.
438.6(c) or (d) to reflect this reinterpretation and clarification
because this preamble provides an opportunity to again bring this
important information to States' attention; CMS will continue this
narrower interpretation of Sec. 438.6(c) and (d). We solicit comments
on whether additional clarification about these grey area payments is
necessary or, if revision to the regulation text would be helpful.
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\52\ <a href="https://www.medicaid.gov/Federal-Policy-Guidance/Downloads/smd21001.pdf">https://www.medicaid.gov/Federal-Policy-Guidance/Downloads/smd21001.pdf</a>.
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c. Medicare Exemption, SDP Standards and Prior Approval (Sec.
438.6(c)(1)(iii)(B), Sec. 438.6(c)(2), and Sec.
438.6(c)(5)(iii)(A)(5))
In Sec. 438.6(c), States are permitted to direct managed care
plans' expenditures under the contract as specified in Sec.
438.6(c)(1)(i) through (iii), subject to written prior approval based
on complying with the requirements in Sec. 438.6(c)(2). In the
preamble to the 2020 final rule, we noted our observation that a
significant number of proposals submitted by States for review under
Sec. 438.6(c)(2) required managed care plans to adopt minimum fee
schedules specified under an approved methodology in the Medicaid State
plan. In response, we adopted several revisions to Sec. 438.6(c) in
the 2020 final rule.\53\ We defined ``State plan approved rates'' in
Sec. 438.6(a) as ``amounts calculated for specific services
identifiable as having been provided to an individual beneficiary
described under CMS approved rate methodologies in the Medicaid State
plan,'' and excluded supplemental payments that are paid in addition to
State plan approved rates. We also revised Sec. 438.6(c)(1)(iii)(A) to
explicitly address SDPs that are a minimum fee schedule for network
providers that provide a particular service under the contract using
State plan approved rates and revised Sec. 438.6(c)(2)(ii) to exempt
these specific SDP arrangements from the written prior approval
requirement. However, SDPs described in paragraph Sec.
438.6(c)(1)(iii)(A) must comply with the requirements currently at
Sec. 438.6(c)(2)(ii)(A) through (F) (other than the requirement for
written prior approval) and be appropriately documented in the managed
care contract(s) and rate certification(s).
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\53\ <a href="https://www.federalregister.gov/documents/2020/11/13/2020-24758/medicaid-program-medicaid-and-childrens-health-insurance-program-chip-managed-care">https://www.federalregister.gov/documents/2020/11/13/2020-24758/medicaid-program-medicaid-and-childrens-health-insurance-program-chip-managed-care</a>.
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[[Page 28114]]
This piece of the 2020 final rule was, in part, intended to
eliminate unnecessary and duplicative review processes in an effort to
promote efficient and effective administration of the Medicaid program.
This rule improved States' efforts to timely implement certain SDP
arrangements that meet their local goals and objectives without drawing
upon State staff time unnecessarily. We continue to believe exempting
payment arrangements based on an approved State plan rate methodology
from written prior approval does not increase program integrity risk or
create a lack of Federal oversight. We continue to review the
corresponding managed care contracts and rate certifications which
include these SDPs. The State plan review and approval process ensures
that Medicaid State plan approved rates are consistent with efficiency,
economy, and quality of care and are sufficient to enlist enough
providers so that care and services are available under the plan, at
least to the extent that such care and services are available to the
general population in the geographic area, as required under section
1902(a)(30) of the Act.
As we have continued to review and approve SDPs since the 2020
final rule, we believe this same rationale applies to SDPs that adopt a
minimum fee schedule using Medicare approved rates for providers that
provide a particular service under the contract. Medicare rates are
developed under Title XVIII of the Act and there are annual rulemakings
associated with Medicare payment for benefits available under Parts A
and B in the Medicare Fee-for-Service (FFS) program. Additionally,
section 1852(a)(2) of the Act provides that Medicare Advantage plans
pay out-of-network providers at least the amount payable under FFS
Medicare for benefits available under Parts A and B, taking into
account cost sharing and permitted balance billing.\54\ These
considerations mean that prior written approval by CMS is not necessary
to ensure that the standards for SDPs in current Sec. 438.6(c)(2) are
met.
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\54\ See also 42 CFR 422.100(b) and 422.214 and guidance in the
``MA Payment Guide for Out of Network Payments'', April 15, 2015,
available at <a href="https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/downloads/oonpayments.pdf">https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/downloads/oonpayments.pdf</a>.
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Consistent with how we have considered State plan rates to be
reasonable, appropriate, and attainable under Sec. Sec. 438.4 and
438.5, Medicare approved rates too meet this same threshold. Therefore,
we are proposing to exempt SDPs that adopt a minimum fee schedule based
on total published Medicare payment rates from written prior approval
as it would be unnecessary and duplicative. We propose to amend Sec.
438.6(c) to provide specifically for SDPs that require use of a minimum
fee schedule using FFS Medicare payment rates.
First, we propose to add a new definition to Sec. 438.6(a) for
``total published Medicare payment rate'' as amounts calculated as
payment for specific services that have been developed under Title
XVIII Part A and Part B. We propose to re-designate the existing Sec.
438.6(c)(1)(iii)(B) through (D) as Sec. 438.6(c)(1)(iii)(C) through
(E), respectively, and add a new Sec. 438.6(c)(1)(iii)(B) explicitly
recognizing SDP arrangements that are a minimum fee schedule using a
total published Medicare payment rate in effect no more than 3 years
prior to the start of the rating period as a permissible type of SDP.
We are also proposing to revise proposed re-designated paragraph
(c)(1)(iii)(C) to take into account the proposed new category of SDPs
that use one or more total published Medicare payment rates. As part of
the proposals for paragraphs (c)(1)(iii)(A) through (E), we also
propose to streamline the existing regulation text to eliminate the
phase ``as defined in paragraph (a)'' as unnecessary; we expect that
interested parties and others who read these regulations will read them
completely and recognize when defined terms are used.
We also propose to restructure Sec. 438.6(c)(2) and amend its
paragraph heading to Standards for State directed payments as discussed
fully in later sections. As part of this restructuring, we propose to
re-designate part of the provision in Sec. 438.6(c)(2)(ii) to Sec.
438.6(c)(2)(i) to describe which SDPs require written prior approval.
This revision includes proposing a conforming revision in Sec.
438.6(c)(2)(i) to reflect the re-designation of Sec.
438.6(c)(1)(iii)(B) through (D) as (c)(1)(iii)(C) through (E). This
revision will ensure that that SDPs described in paragraph
(c)(1)(iii)(B) along with the SDPs described in paragraph
(c)(1)(iii)(A), are not included in the written prior approval
requirement. States that adopt a minimum fee schedule using 100 percent
of total published Medicare payment rates will still need to document
these SDPs in the corresponding managed care contracts and rate
certifications and those types of SDPs must still comply with
requirements for all SDPs other than prior written approval by CMS,
just as minimum fee schedules tied to State plan approved rates
described in paragraph (c)(1)(iii)(A) must comply. SDPs described under
paragraphs (c)(1)(iii)(A) and (B) would still need to comply with the
standards listed in the proposed restructured Sec. 438.6(c)(2)(ii).
(See sections II.2.f. through l. for proposed new requirements and
revisions to existing requirements for all SDPs to be codified in
paragraph (c)(2)(ii).)
Our proposal to exempt certain SDPs from written prior approval
from CMS is specific to SDPs that require the Medicaid managed care
plan to use a minimum fee schedule that is equal 100 percent of the
total published Medicare payment rate. SDP arrangements that use a
different percentage (whether higher or lower than 100 percent) of a
total published Medicare payment rate as the minimum payment amount or
are simply based off of an incomplete total published Medicare payment
rate would be included in the SDPs described in paragraph
(c)(1)(iii)(C). Our review of SDPs includes ensuring that they will
result in provider payments that are reasonable, appropriate, and
attainable, and will not negatively impact access to care. Accordingly,
we believe that SDPs that propose provider payment rates that are
incomplete or either above or below 100 percent of total published
Medicare payment rates may not always meet these criteria and thus,
should remain subject to written prior approval by CMS.
We are also not proposing to remove the written prior approval
requirement for SDPs for provider rates tied to a Medicare fee schedule
in effect more than 3 years prior to the start of the rating period.
This is reflected in our proposed revision to redesignated paragraph
(c)(1)(iii)(C) to describe fee schedules for providers that provide a
particular service under the contract using rates other than the State
plan approved rates or one or more total published Medicare payment
rates described in proposed new paragraph (c)(1)(iii)(B). We propose
the limit of 3 years to be consistent with how Sec. 438.5(c)(2)
requires use of data that is at least that recent for rate development.
Our review of SDPs includes ensuring that they will result in provider
payments that are reasonable, appropriate, and attainable, and will not
negatively impact access to care. Accordingly, we believe that SDPs
that propose provider payment rates tied to a total published Medicare
payment rate in effect more than 3 years prior to the start of the
rating period may not always meet these criteria and thus, should
remain subject to written prior approval by CMS.
We solicit public comments on our proposal to specifically address
SDPs
[[Page 28115]]
that are for minimum fee schedules using 100 percent of the amounts in
a total published Medicare payment rate for providers that provide a
particular service provided that the total published Medicare payment
rate was in effect no more than 3 years prior to the start of the
rating period and on our proposal to exempt these specific types of SDP
arrangements from the prior written approval requirement in Sec.
438.6(c)(2)(ii).
We are also proposing to add new Sec. 438.6(c)(5) (with the
paragraph heading Requirements for Medicaid Managed Care Contract Terms
for State directed payments), for oversight and audit purposes.
Proposed new paragraph (c)(5)(iii)(A)(5) would require the managed care
plan contract to include certain information about the Medicare fee
schedule used in the SDP, regardless of whether the SDP was granted an
exemption from written prior approval under Sec. 438.6(c)(1)(iii)(B).
That is, for SDPs which use total published Medicare payment rates, the
contract would need to specify which Medicare fee schedule(s) the State
directs the managed care plan to use and any relevant and material
adjustments due to geography, such as rural designations, and provider
type, such as Critical Access Hospital or Sole Community Hospital
designation.
The managed care contract would also need to identify the time
period for which the Medicare fee schedule is in effect as well as the
rating period for which it is used for the SDP. Consistent with Sec.
438.6(c)(1)(iii)(B), the Medicare fee schedule must be in effect no
more than 3 years prior to the start of the rating period for the
services provided in the arrangement. This 3-year requirement is
similar to Sec. 438.5 rate setting, under which data that the actuary
relies upon must be from the 3 most recent years that have been
completed, prior to the rating period for which rates are being
developed. For example, should a State seek to implement a Sec.
438.6(c)(1)(iii)(B) fee schedule in calendar year 2025, the Medicare
fee schedule must have been in effect for purposes of Medicare payment
at least at the beginning of calendar year 2021.
Requiring sufficient language in the contract regarding the
Medicare fee schedule would provide clarity to CMS, managed care plans,
and providers regarding the explicit Medicare payment methodology being
used under the contract. For broader discussion of Sec. 438.6(c)(5),
see section I.B.2.k. of this proposed rule.
We request comment on other material or significant information
about a Medicare fee schedule that would need to be included to ensure
the managed care contract sufficiently describes this type of SDP.
For discussion on the proposed applicability dates for the
proposals outlined in this section, see section I.B.2.p. of this
proposed rule.
We solicit public comments on our proposals.
d. Non-Network Providers (Sec. 438.6(c)(1)(iii))
We are proposing to remove the term ``network'' from the
descriptions of SDP arrangements in current (and revised as proposed)
Sec. 438.6(c)(1)(iii). Existing regulations specify that for a State
to require an MCO, PIHP or PAHP to implement a fee schedule under Sec.
438.6(c)(1)(iii), the fee schedule must be limited to ``network
providers.'' This limitation is not included in Sec. 438.6(c)(1)(i) or
(ii) for SDP arrangements that are VBP and multi-payer or Medicaid-
specific delivery system reform or performance improvement initiatives.
In our experience working with States, limiting the descriptions of SDP
arrangements subject to Sec. 438.6(c)(iii) to those that involve only
network providers has proven to be too narrow and has created an
unintended barrier to States' and CMS' policy goals to ensure access to
quality care for beneficiaries.
In the 2016 final rule, we finalized current Sec. 438.6(c)(1)(iii)
to include ``network'' before ``providers'' in this provision.\55\ As
previously noted, the regulation at Sec. 438.6(c)(1) generally
prohibits States from directing the MCO's, PIHP's or PAHP's
expenditures under the contract unless it meets one of the exceptions
(as provided in a specific provision in Title XIX, in another
regulation implementing a Title XIX provision related to payment to
providers, a SDP that complies with Sec. 438.6(c), or a pass-through
payment that complies with Sec. 438.6(d)). Therefore, the inclusion of
the word ``network'' in the SDP arrangement descriptions in the 2016
final rule has prevented States from including contract requirements to
direct their Medicaid managed care plans on how to pay non-network
providers.
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\55\ <a href="https://www.federalregister.gov/d/2016-09581/p-1269">https://www.federalregister.gov/d/2016-09581/p-1269</a>.
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In our work with States over the years, some States have noted
concerns with the requirement that permissible SDPs only apply (or
include) payments by Medicaid managed care plans to network providers.
States have noted that limiting SDPs to network providers is
impractical in large and diverse States. Several States had, prior to
rulemaking, pre-existing contractual requirements with managed care
plans that required a specific level of payment (such as the State's
Medicaid FFS rates) for non-network providers. This aligns with our
experience working with States as well, and we note section
1932(b)(2)(D) of the Act requires that non-network providers furnishing
emergency services must accept as payment in full an amount equal to
the Medicaid State plan rate for those services. Some States have
historically required plans to pay non-network providers at least the
Medicaid State plan approved rate or another rate established in the
managed care contract. Many States with enrollees on their borders rely
on providers in neighboring States to deliver specialty services, such
as access to children's hospitals.
While we support States' and plans' efforts to develop strong
provider networks and to focus their efforts on providers who have
agreed to participate in plan networks, executing network agreements
with every provider may not always be feasible for plans. For example,
in large hospital systems, it may be impractical for every plan to
obtain individual network agreements with each rounding physician
delivering care to Medicaid managed care enrollees. In such instances,
States may have an interest in ensuring that their Medicaid managed
care plans pay non-network providers at a minimum level to avoid access
to care concerns. We have also encountered situations in which States
opt to transition certain benefits, which were previously carved out
from managed care, from fee-for-service into managed care. In these
instances, States would like to require their managed care plans to pay
out-of-network providers a minimum fee schedule in order to maintain
access to care while allowing plans and providers adequate time to
negotiate provider agreements and provider payment rates for the newly
incorporated services. Consequently, we are proposing these changes to
provide States a tool to direct payment to non-network providers as
well as network providers.
Therefore, we are proposing to remove the term ``network'' from the
descriptions of permissible SDP arrangements in Sec. 438.6(c)(1)(iii).
Under this proposal, the permissible SDPs are described as payment
arrangements or amounts ``for providers that provide a particular
service under the contract'' and this will permit States to direct
payments under their managed care contracts for both network and non-
network providers, subject to the requirements in paragraph (c). We
note
[[Page 28116]]
that, as proposed, all of the standards and requirements under Sec.
438.6(c) would still be applicable to SDPs that direct payment
arrangements for non-network providers.
Finally, as pass-through payments (PTPs) are separate and distinct
from SDPs, we are maintaining the phrase ``network provider'' in Sec.
438.6(d)(1) and (6). Existing PTPs are subject to a time-limited
transition period and in accordance with Sec. 438.6(d)(3) and (5),
respectively, hospital PTPs must be fully eliminated by no later than
the rating period beginning July 1, 2027 and NF and physician services
PTPs were required to have been eliminated by no later than the rating
period July 1, 2022 with the exceptions of pass-through payments for
States transitioning services and populations in accordance with Sec.
438.6(d)(6). Therefore, we do not believe that it is appropriate or
necessary to eliminate the word ``network'' from Sec. 438.6(d).
We solicit public comments on our proposal. In particular, we seek
comment on whether this change would result in negative unintended
consequences.
For discussion on the proposed applicability dates for the
proposals outlined in this section, see section I.B.2.p. of this
proposed rule.
e. SDP Submission Timeframes (Sec. 438.6(c)(2)(viii) and (ix))
Since we established the ability for States to direct the
expenditures of their managed care plans in the 2016 final rule, we
have encouraged States to submit their requests for written prior
approval 90 days in advance of the start of the rating period whenever
possible. We also recommend that States seek technical assistance from
CMS in advance of formally submitting the preprint for review to CMS
for more complicated proposals to facilitate the review process.
Submitting 90 days in advance of the rating period provides CMS and
the State time to work through the written prior approval process
before the State includes the SDP in their managed care plan contracts
and the associated rate certifications. If States include SDPs in
managed care contracts and capitation rates before we issue written
prior approval, any changes to the SDP made as a result of the review
process would likely then necessitate contract and rate amendments,\56\
creating additional work for States, actuaries, CMS, and managed care
plans. Submitting SDP preprints at least 90 days in advance of the
rating period can help reduce the need for subsequent contract and rate
amendments to address any inconsistencies between the contracts and
rate certifications and approved SDPs. State directed payments that are
not submitted 90 days in advance of the affected rating period also
cause delays in the approval of managed care contracts and rates
because those approvals are dependent on the written prior approval of
the SDP. Since we cannot approve only a portion of a State's Medicaid
managed care contract, late SDP approvals delay approval of the entire
contract and the associated capitation rates.
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\56\ The term ``rate amendment'' is used to reference an
amendment to the initial rate certification.
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Some States have not been successful in submitting their SD
[…truncated; see source link]Indexed from Federal Register on May 3, 2023.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.