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Final Medicaid Managed Care Rule Released  

The U.S. Centers for Medicare and Medicaid Services (CMS) has released a final rule that covers many aspects of Medicaid managed care.

The rule and fact sheets are at

The rule covers long term services and supports (LTSS); care coordination; provider screening and program integrity; subcontractual relationships; quality; beneficiary information and appeals; delivery system reform efforts; and other areas.

Last July, HCA had submitted extensive comments on the then proposed rule, which can be viewed at

HCA’s comments address: the misalignment between federal and state regulations for home care; the need for actuarial soundness of rates by states to managed care plans and rates by plans to home care providers; disenrollment due to home care provider changes; transitions of care; state monitoring requirements; grievances and appeals and aid continuing; provider screening and enrollment; uniform billing; and plan contacts.

HCA will be reviewing the final rule – which, including public comments and CMS’s responses, is over 1,000 pages – to learn if the issues we raised were addressed, and to determine which provisions will affect managed care in New York.

A full summary of the provisions is provided below. 

Managed Long Term Services and Supports (MLTSS) 

  • Requires a deliberative state planning process, which includes standards for a state’s readiness reviews of managed care plans and specific information to be provided to beneficiaries transitioning from fee-for-service to managed care;
  • Encourages payment methodologies that reflect the goals of MLTSS programs to improve the health of populations, support beneficiaries’ experience of care, support community integration of enrollees, and control costs;
  • Requires the creation of an independent beneficiary support system that services as a centralized point of contact for “choice counseling” along with other services and supports to help individuals navigate the managed care delivery system;
  • Requires comprehensive assessment of individuals identified as needing LTSS and development of a treatment or service plan that meets certain criteria developed by a person meeting LTSS service coordination requirements with enrollee  participation and in consultation with any providers caring for the enrollee, and using a person-centered process;
  • Mandates that the service plan be reviewed and revised upon reassessment of function need, at least every twelve months or when the enrollee’s needs change significantly, or at the enrollee’s request;
  • Establishes standards for coordination and referral by the managed care plan when services are divided between contracts or delivery systems to ensure that the beneficiary’s service plan is comprehensive;
  • Sets standards to evaluate the adequacy of the network for MLTSS programs, the qualifications and credentialing of providers, and the accessibility of providers to meet the needs of MLTSS enrollees;
  • Permits enrollees to disenroll from their current plan if the enrollee experiences a disruption in their employment or residence due to a change in the network status of their current provider of employment, residential or institutional supports;
  • Requires managed care plans to participate in efforts by the state to prevent, detect, and report critical incidents that adversely impact enrollee health and welfare; and
  • Requires states to incorporate MLTSS-specific elements into their quality strategies.

Care Coordination

  • Requires that managed care plans coordinate and ensure that individuals are able to make smooth transitions between settings of care to enhance access to services, and complete an initial health risk assessment within 30 days of enrollment for new beneficiaries.

Program and Fiscal Integrity

  • Requires that providers who order, refer or furnish services under managed care are screened and enrolled by the state Medicaid program;
  • Implements procedures for internal monitoring, auditing, and prompt referral of potential compliance issues within the managed care plan;
  • Requires mandatory  reporting of potential fraud, waste or abuse to the state and reporting of any potential changes in an enrollee’s circumstances that may impact Medicaid eligibility as well as changes in a provider’s circumstances that may impact that provider’s participation in the managed care plan’s network;
  • Mandates the suspension of payments to a network provider when the state determines a credible allegation of fraud exists;
  • Requires that all managed care contracts require complete, timely and accurate encounter data submissions to the state as determined by CMS and clarifies that federal financial participation is not available for managed care expenditures if the encounter data does not meet this standard;
  • Requires that capitation rates be developed so that plans can be expected to achieve at least an 85 percent medical loss ratio; and
  • Requires independent audit of the accuracy, truthfulness, and completeness of the encounter and financial data submitted by plans at least once every three years.

Subcontractual Relationships

If any of a managed care plan’s activities or obligations are delegated to a subcontractor:

  • The subcontractor agrees to comply with all applicable Medicaid laws and regulations;
  • The subcontractor agrees that the state, CMS, Health and Human Services (HHS) Inspector General, and Comptroller General have the right to audit, evaluate and inspect any books, records, contracts or electronic systems of the subcontractor that pertain to any aspect of services and activities performed or determination of amounts payable.
  • The subcontractor will make available for an audit, evaluation or inspection its premises, equipment, books, records, contracts, computer or other electronic systems relating to its Medicaid enrollees.
  • The right to audit will exist through ten years from the final date of the contract period or from the date of completion of any audit, whichever is later.
  • If the state, CMS or the HHS Inspector General determines that there is a reasonable possibility of fraud or similar risk, they may inspect, evaluate and audit the subcontractor at any time.


  • Implements a Medicaid quality rating system (QRS) and provides for extensive state and stakeholder input and allows states to develop an alternative QRS;
  • Adds two new elements to state managed care quality strategies to help support key quality goals: a plan to identify, evaluate, and reduce health disparities; and mechanisms implemented by the state to identify individuals who need LTSS or who have special health care needs;
  • Improves transparency of managed care quality information by requiring states to post on state websites: information on managed care plan accreditation status; state managed care quality strategies; and the results of the annual external quality reviews, which provide an independent assessment of the performance of managed care plans;
  • Ensures that states validate plan network adequacy information as part of their annual external quality review process; and
  • Requires that a quality improvement program include mechanisms to assess the quality and appropriateness of care furnished to enrollees using LTSS, including assessment of care between settings and a comparison of services and supports received with those outlined in the enrollee’s service plan.

Beneficiary Information and Appeals

The final rule requires states and managed care plans to provide and maintain specific content on a public website that includes the following information in annual reports:

  • Assessment of managed care plan performance;
  • Encounter data;
  • Enrollment;
  • Benefits;
  • Grievances and appeals;
  • Evaluation of plan performance on quality measures;
  • Sanctions or corrective action plans;
  • Factors related to the delivery of LTSS; and
  • Other data.

Regarding appeals, the rule aligns with Medicare managed care the definitions and timeframes for appeals, streamlines levels of internal appeals, and requires that enrollees utilize the plan’s internal process before proceeding to a state fair hearing.

Plans must notify the requesting provider and give the enrollee written notice of any decision to deny a service authorization request to authorize a service in an amount, duration, or scope that is less than requested.  Plans must issue standard authorization decisions within 14 calendar days and expedited authorization decisions within 72 hours.

In addition, plans must maintain records of grievances and appeals, including the issue and resolution.

 Delivery System Reform

  • Encourages plans to develop and participate in delivery system reform or performance improvement initiatives including patient-centered medical homes, health information exchanges, and improvements in provider access;
  • Allows states to partner with plans to adopt value-based purchasing approaches, such as pay-for-performance and bundled payments, that base provider reimbursement on their performance on quality measures; and
  • Permits states to use incentive and withhold arrangements for managed care plans that meet certain quality or performance targets.