This week the Centers for Medicare & Medicaid Services (CMS) released draft regulations governing Medicaid managed care plans. We at CHIR are happy to leave to our Medicaid expert colleagues the task of deciphering the proposed rules, but we did note with interest the approach CMS is taking towards the thorny issue of network adequacy.
As noted here and in other venues, health plans in the commercial market have in recent years narrowed their provider networks in order to lower costs and keep their premiums competitive. There have been similar incentives among plans participating in the Medicare Advantage program.
It is thus no surprise that CMS looked to standards and review processes already in place for plans on the health insurance marketplaces and in Medicare Advantage when drafting rules for network adequacy for Medicaid managed care plans. However, the two programs take dramatically different approaches to the regulation of network adequacy.
A Tale of Two Programs: Marketplace vs. Medicare Approaches to Network Adequacy
Plans participating in Medicare Advantage must meet detailed, quantitative standards to demonstrate that they have sufficient numbers and types of providers to meet beneficiaries’ needs. These standards include a minimum number of providers, maximum travel time, and maximum travel distance per county for all provider types covered under the plan contract.
Conversely, the federal approach to plans participating on the health insurance marketplaces has been to establish a general standard that requires plans to include sufficient numbers and types of providers to deliver services without “unreasonable delay.” Federal regulators have not defined what “unreasonable delay” means, and have instead left it to states to set their own quantitative standards if they choose to do so. As noted in our recent issue brief for the Commonwealth Fund, as of January 2014, only 16 states subjected all marketplace plans to a quantitative standard.
What’s missing from the proposed rule, however, is any data to demonstrate which approach – the prescriptive, national standard or the looser, qualitative standard – is more effective at protecting consumers from a network that lacks the providers to meet enrollees’ health care needs, while also keeping premiums affordable. Unfortunately, as noted during a recent Academy Health webinar, this is an area that has not been sufficiently studied, leaving policymakers without strong evidence to make important policy choices.
CMS’ Choice for Medicaid Managed Care: Splitting the Baby
In choosing between these approaches in this proposed rule, CMS essentially split the baby. Ultimately, and perhaps not surprisingly, CMS chose to defer to the states and avoid setting a national standard. However, CMS goes beyond current marketplace requirements by proposing to require states to establish their own network adequacy standards. These must include quantitative time and distance standards for primary care, OB/GYN, behavioral health, adult and pediatric specialists, hospital services, pharmacy, pediatric dental and certain “additional provider types when it promotes the objectives of the Medicaid program….” CMS suggests that maximum time and distance standards provide a “more accurate” measure of beneficiaries’ access to services than other metrics.
CMS is further proposing to require states to consider certain “minimum factors” in setting time/distance or other standards, including:
- Anticipated enrollment
- Expected utilization
- Characteristics and health needs of enrollees
- Number and types of health professionals needed to deliver services
- Number of providers not accepting new Medicaid patients
- Geographic location and accessibility of providers and enrollees
- Ability of providers to ensure physical access, accommodations, and accessible equipment for Medicaid enrollees with physical or mental disabilities
- Ability of providers to ensure culturally competent communication, including the ability to communicate with limited English proficient enrollees in their preferred language
CMS requests comment on whether time and distance standards are the appropriate measures and also whether they should give more flexibility to states to determine what kind of standard to set.
Monitoring and Transparency – Keys to Ensuring Compliance
With the commercial market, it’s critical that regulators stay on top of consumers’ experiences with their coverage to determine whether benefits are being delivered as promised. The same is true for the Medicaid market. To that end, CMS is proposing to require that states publish their network adequacy standards on the Medicaid managed care website so that consumers, providers and other stakeholders know what they are. Plans must certify and provide documentation on an annual basis to state Medicaid agencies regarding their networks, and CMS proposes that states be required to monitor enrollee access to providers in any managed care plans that have been granted an exception to the network adequacy standards. In addition, as part of the annual quality review of plans, the proposed rule would require states to “evaluate and validate” their network adequacy. The proposed rule doesn’t specify how monitoring would take place, but it could be done through secret shopper surveys, review of data on out-of-network use, and tracking enrollee complaints.
If the regulations are adopted as proposed, CMS will have three separate regimes governing health plan network adequacy: one for Medicare, one for Medicaid and one for marketplace plans. With the latter two programs, the standards and oversight will vary state-to-state. This is confusing for consumers and could disrupt continuity of care for those transitioning between programs. It is also administratively challenging for insurers that operate in more than one program and across states. Over time, as more information is gathered about consumer experiences and trends in network design, perhaps we’ll be better able to determine an optimal regulatory approach across all three programs.