CMS Issues Final Rule Modernizing Medicaid Managed Care.

Date posted: June 2, 2016

The Centers for Medicare & Medicaid Services (CMS) recently issued a final rule modernizing managed care in Medicaid and the Children’s Health Insurance Program (CHIP).  The final rule aligns Medicaid managed care with other programs to enhance delivery of care, improve spending, and promote beneficiary health.  Further, the rule modernizes how states deliver managed care to beneficiaries.

The final rule aims to:

  1. Support advancements improving the delivery of quality care to Medicaid and CHIP beneficiaries;
  2. Strengthen the consumer experience while simultaneously enhancing consumer protections for healthcare service beneficiaries;
  3. Improve accountability and transparency; and
  4. Coordinate rules across insurance programs to create efficient systems of coverage for individuals transitioning between different sources of healthcare coverage.

Further, the final rule:

  • Establishes a Quality Rating System to enhance delivery of care;
  • Clarifies the role of states in contracting with plans that pay for quality or encourage participation in alternative payment models;
  • Improves enrollment, communications, care coordination, and the availability of covered services among state and managed care plans;
  • Establishes mechanisms that support, educate, and provide channels of communication for beneficiaries;
  • Requires additional transparency regarding Medicaid rate setting; and
  • Aligns Medicaid medical loss ratio reporting, appeals processes, and dissemination of consumer information with existing Medicare requirements.

CMS will gradually implement portions of the final rule over the next three years beginning July 1, 2017.

The final rule is available at:

The CMS press release is available at:

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, 81 Fed. Reg. 27497, 27497-27901 (May 6, 2016).

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