New Medicaid Rule Will Improve Quality and Access to Care

The Centers for Medicare and Medicaid Services (CMS) has issued its first significant update to the federal rule governing Medicaid managed care in more than a decade and, when fully implemented, it could substantially improve quality and Medicaid beneficiaries’ access to timely care.

States increasingly rely on managed care organizations to administer and coordinate health care services under Medicaid; 39 states’ Medicaid agencies now contract with private managed care plans.

CMS’ expansive new rule encourages states to adopt payment methods that reward plans and providers for meeting specific health care quality goals, and to partner with managed care plans to develop new ways to pay providers that consider the value, rather than just the volume, of the health care they provide.  It also sets standards for states that allow plans to cover services or settings that could prevent costly and unnecessary treatments such as nursing facility stays.

Nearly two-thirds of the 72 million people enrolled in Medicaid are in managed care.  The new rule also includes important new tools and protections for them, including a requirement that states set standards to ensure adequate provider networks that enable beneficiaries to access timely care in their communities.  Plans also must ensure that their provider directories are accurate so beneficiaries can know how to get the care they need.  A new quality rating program will allow consumers to compare and select plans based on the quality of their care.  Consumer and provider education will be especially critical to ensure true consumer choice, particularly for new enrollees.

For this rule to mean real improvements for beneficiaries, however, states need the capacity to implement it.  State Medicaid agencies are too often overwhelmed and under-resourced to adequately implement and enforce program changes.  Consumer advocates can play an important role by working with states to ensure the rule is implemented fully and appropriately, and in making sure managed care organizations follow the rule, too. They can also work to get their state Medicaid agencies sufficient resources to successfully implement the new rule.