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Experience. Integrity. Advocacy.

CMS Updates Medicaid and CHIP MCO Regulations


In late May, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule to modernize Medicaid and Children’s Health Insurance Program (CHIP) managed care regulations and to update the programs’ rules and strengthen the delivery of quality care for beneficiaries. The 700-page proposal is the first major update in more than ten years and is comprehensive in nature.

According to CMS, the update is intended to “improve beneficiary communications and access, provide new program integrity tools, support state efforts to deliver higher quality care in a cost-effective way, and better align Medicaid and CHIP managed care rules and practices with other sources of health insurance coverage.”

Among the more controversial proposals is the implementation of an 85 percent medical loss ratio (MLR) for MCOs. The MLR dictates the minimum amount of premium dollars that must be spent on health care directly and results in some beneficiaries receiving premium rebates after the calculations are made each year. According to the National Journal, Medicare Advantage and Medicare Part D, as well as private plans, are all subject to the MLR today thanks to the Patient Protection and Affordable Care Act. The PPACA set the national MLR at 80 percent for individual and small-group plans and 85 percent for large-group plans. But until now, Medicaid managed care plans were not under a federal MLR. (Some states have implemented their own, but they vary from state to state.)

Other provisions include:

  • tightening regulations on provider networks and extending minimum time and distance standards to behavioral health providers, OB-GYNs, and dentists.
  • providing greater transparency in rate determination.
  • addressing issues such as electronic access to plan information and the accuracy of provider directories.
  • strengthening continuity of care between Medicaid and Medicare.
  • standardizing quality measures.
  • improving protections for beneficiaries through enrollment, disenrollment, and appeals and grievances processes.

Nearly 30 million people are now enrolled through managed care, which amounts to about two-thirds of people with Medicaid. That’s up from just 2.7 million people with managed care in 1991.

The proposed rule is available at https://s3.amazonaws.com/public-inspection.federalregister.gov/2015-12965.pdf or https://www.federalregister.gov/public-inspection and can be viewed at https://www.federalregister.gov/articles/2015/06/01/2015-12965/medicaid-and-childrens-health-insurance-program-chip-programs-medicaid-managed-care-chip-delivered starting June 1. The deadline to submit comments is July 27, 2015.


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Charity Singleton Craig

Charity Singleton Craig is a freelance writer and editor who provides communications and marketing services for CIPROMS. She is responsible for creating, editing, and managing all content, design, and interaction on the company website and social media channels in order to promote CIPROMS as a thought leader in healthcare billing and management.

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