CMS Releases New Medicaid Managed Care Final Rule

On April 22, The Centers for Medicare and Medicaid Services (CMS) released the Medicaid Managed Care final rule, marking a substantial update in the framework governing Medicaid managed care plans. The rule introduces enhancements aimed at improving care access, quality and outcomes — with implications for long-term care providers. 

The final rule will be published in the Federal Register on May 10, 2024, and will take effect July 9, 2024.

Key points:

• Improvement Initiatives: The rule enhances timely care access benchmarks and state monitoring while simplifying payment systems and reporting requirements, aiming to reduce administrative burdens.
• Specific Standards and Requirements: It introduces standards for services provided in lieu of traditional settings, specifies medical loss ratio requirements, and establishes a quality rating system. Changes to State-Directed Payments and compliance requirements are included.

Services Provided in Lieu of Traditional Settings (ILOS):

• Flexibility in Service Delivery: Managed care organizations (MCOs) can offer alternative services or settings, provided they meet Medicaid standards and are cost-effective.
• Standards and Oversight: ILOS must meet specific Medicaid standards, ensuring quality and safety.
• Approval and Documentation: MCOs need prior approval for ILOS, documented in the managed care plan.
• Evaluation and Monitoring: States must monitor and evaluate ILOS to ensure intended outcomes and prevent negative consequences for enrollees.

Impact on State-Directed Payments (SDPs):

• Prior Approval Requirements: Certain SDPs will require prior CMS approval to align with Medicaid goals.
• Increased Documentation and Transparency: States must submit detailed documentation for new or renewing SDPs, enhancing transparency.
• Annual Reporting and Revisions: Mandatory annual reporting on SDPs will maintain accountability and allow adjustments to program goals.

Long-Term Care Provider Implications:

• LTC providers may see direct impacts on reimbursement, quality metrics, data reporting and network adequacy standards.
• Overall, the Medicaid Managed Care final rule aims to improve care quality, access and outcomes while streamlining processes for providers and enhancing transparency and accountability.