Medicaid Managed Care Proposal Under White House Review

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By Brian Broderick

A new Medicaid rule affecting how managed care plans enroll doctors, hospitals, and other health-care providers is on the way from the Trump administration.

The White House Office of Management and Budget started review Aug. 3 of the proposal on managed care provider enrollments and terminations, based on a recent OMB posting at reginfo.gov. Details aren’t yet available on what’s in the proposal from the Centers for Medicare & Medicaid Services, but an industry group and a Medicaid policy attorney told Bloomberg Law they’re watching to see how the measure could affect Medicaid managed care, especially whether the CMS will allow more flexibility to industry.

Managed care delivers an increasing share of the care to Medicaid beneficiaries. Major managed care companies in the Medicaid market include Centene Corp., UnitedHealth Group, Aetna, and Molina Healthcare.

The Kaiser Family Foundation said 65 million people in the U.S., including Puerto Rico, are in some form of Medicaid managed care, which amounts to 81 percent of total Medicaid enrollment as of 2016.

And a recent Government Accountability Office report said Medicaid managed care expenditures for fiscal year 2017 were $171 billion, almost 50 percent of total federal Medicaid expenditures.

The name of the proposed rule is Medicaid and CHIP Managed Care and Medicaid Provider Enrollment and Terminations (CMS-2408-P). CHIP is the Children’s Health Insurance Program, which covers low-income children not eligible for Medicaid.

According to the OMB, the proposed rule “would advance CMS’ efforts to streamline the Medicaid and CHIP managed care regulatory framework and reflects a broader strategy to relieve regulatory burdens; support state flexibility and local leadership; and promote transparency, flexibility, and innovation in the delivery of care.”

The Trump regulation would follow on a sweeping Obama-era managed care rule from 2016. That 2016 rule was the first major update to Medicaid and CHIP managed care rules in more than a decade, according to the CMS.

The health-care providers that enroll in Medicaid can include hospitals, doctors, post-acute care providers, transportation providers, medical equipment suppliers, and laboratories, health-care attorney Randi Seigel, with Manatt Phelps & Phillips in New York, told Bloomberg Law Aug. 8.

An industry group said it asked the federal government to take another look at the 2016 rule.

Alex Shekhdar, vice president of federal and state policy at Medicaid Health Plans of America, said in a statement that the provider screening and enrollment provisions are among the items in the earlier rule that industry has asked the CMS to reconsider.

In addition, Shekhdar said the 21st Century Cures Act, a 2016 law, “accelerated these provisions to January 2018, which has put states and plans in a tight spot since they have had to develop systems and procedures to comply with the new rules.”

Shekhdar said the industry “has asked for maximum flexibility in these matters and hopes that any new proposed rules reflect this along with other positive changes.”

Manatt’s Seigel said she expects the proposed rule may give more flexibility to the states in Medicaid managed care oversight.

She also said the CMS may use the rule to implement some policy ideas laid out by the Trump administration in its most recent budget proposal, from February.

These policy ideas, Seigel said, could include penalizing health-care providers that don’t update enrollment information, thus making it harder for some terminated providers to re-enroll in Medicaid, and streamlining enrollment procedures for Medicare, Medicaid and CHIP, and possibly Medicaid managed care.

Seigel’s practice includes advising health systems, long-term and post-acute care providers, physician practices, and managed care plans in compliance, fraud, waste and abuse and the Health Insurance Portability and Accountability Act. She also has advised some states on implementing the program integrity provisions of the Medicaid managed care requirements.

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