Centers for medicare and medicaid services affect how health exchange is managed

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CMS, Ibid. Gifford et al. Saucier, J. Kasten, B. Burwell, and L. Smith, K. Gifford, E. Ellis, R. Rudowitz, and L. If you have a question or comment, please let us know. Visiting NCD? Read Our Protocols. Employment Opportunities. Skip to main content. Skip to Page Content Medicaid plays an integral role in financing health care services in the United States, accounting for 16 percent of total health spending and providing coverage for one out of every six Americans.

Among the methods commonly used by managed health care plans to control costs and thus remain financially viable are the following: Contracting exclusively with providers willing to offer their services at discounted rates. Monitoring the use of basic and ancillary services furnished by network providers and using incentives to reward below-average use and disincentives to discourage excess above-average use. These techniques are generally referred to as utilization review.

Discouraging the excessive use of tests and prescription medications. Requiring plan participants to obtain a referral prior authorization from their primary care physician to gain access to specialty services reimbursable under the plan.

Requiring providers to assume part of the financial risk of cost overruns for services they control, directly or indirectly. Differences Between Private and Public Sector Managed Care Arrangements Managed care arrangements within the Medicaid program differ from managed care in the private sector, as well as from Medicare managed care plans, in the following ways: The role of provider networks. Limited cost sharing. Cost sharing is frequently used in commercial managed care plans to discourage overutilization of services; but because the Medicaid program serves a low-income population, Medicaid managed care plans use cost sharing sparingly.

Under federal law, states are allowed to impose only nominal cost-sharing requirements, and deductibles are rarely used.

Since such cost-sharing requirements are unlikely to serve as an effective deterrent to using expensive out-of-network providers, states usually elect to establish defined provider networks and hold MCOs responsible for ensuring that beneficiaries gain access to needed services within the network and at negotiated payment rates.

Choice of plans and enrollment processes. States are required under federal law to offer Medicaid beneficiaries a choice of at least two health plans if enrollment in managed care is mandatory with the exception of certain rural areas. Similarly, Medicare recipients who elect to enroll in a Medicare Advantage plan may do so at initial enrollment or during a subsequent annual open enrollment period.

Medicaid beneficiaries, unlike participants in private and Medicare managed care plans, often move in and out of managed care plans because of changes in income that affect their eligibility for Medicaid benefits.

Comprehensive risk-based plans are the most commonly used type of Medicaid managed care arrangement. Typically, states employ an HMO model in which qualified health plans receive fixed per member per month PMPM payments from the state for furnishing a defined range of health services to plan enrollees. Enrollees receive services through a network of participating providers. If aggregate expenditures exceed total income, the health plan is responsible for absorbing the losses, although sometimes the health plan passes on a portion of the financial risk to participating providers.

In addition, states sometimes agree to share financial risk with the health plan by assuming losses in excess of a specified level e. In , 7.

These plans typically cover only a single type of benefit. With payment generally made on a capitated basis, these plans are used in conjunction with other Medicaid managed care or FFS arrangements. Of the Managed Care Utilization and Expenditures The federal-state Medicaid program provided health care coverage for approximately 67 million Americans in Managed Care Enrollment States have used several approaches to enrolling Medicaid beneficiaries in managed care plans. In plans with voluntary enrollment, the beneficiary may elect to participate in the managed care program or receive services on an FFS basis.

Consumers and consumer advocates usually favor voluntary enrollment because it imposes no restrictions on individual choice should existing FFS arrangements be deemed preferable. However, states using a voluntary enrollment model have found that it is difficult to attract high-quality MCOs.

In the absence of a critical mass of enrollees from the onset, MCOs are unable to achieve financial viability and build the infrastructure necessary to serve populations with complex service and support needs. Mandatory enrollment. Under a mandatory enrollment model, all members of the target population are enrolled in a managed care program.

This approach appeals to MCOs because it ensures that enough Medicaid beneficiaries will be enrolled to achieve financial viability. With confidence that a sufficient number of beneficiaries will be enrolled, an MCO can create the infrastructure to deliver services efficiently e. State Medicaid officials usually prefer mandatory enrollment as well because it links consumers to a primary care provider, allows the state to hold MCOs accountable for improving health outcomes, and offers better prospects of budget predictability.

Consumers and consumer advocates, in contrast, often oppose mandatory enrollment because it restricts individual choice and may disrupt long-standing provider-patient relationships.

Hybrid enrollment models. Mandatory enrollment with an opt-out requires targeted beneficiaries to enroll in the managed care program for a specified period of time usually 60 to 90 days , after which they may either remain in the program or opt out and receive services on an FFS basis. Consumers and consumer advocates prefer this approach to strict mandatory enrollment because it gives the individual a chance to opt out of managed care if they are dissatisfied with their service arrangements.

MCOs are generally supportive because they get a chance to prove the value of their services with a critical mass of enrollees. This approach also meets the key state objectives outlined above. Federal Statutory Authorities States interested in enrolling Medicaid recipients in a managed care program must adhere to a set of federal requirements governing provider payment rates, provider availability within the plan network, the provision of covered health services, grievance and appeal procedures, and the quality of care furnished to enrollees.

States can use one of several statutory authorities as the basis for a managed care initiative: [xxi] Offering managed care as a state plan option under the authority of Section a of the Social Security Act. States can implement a voluntary managed care program by obtaining Centers for Medicare and Medicaid Services CMS approval of a Medicaid state plan amendment. Once its state plan amendment is approved, a state can operate its managed care program s indefinitely without obtaining further CMS approvals.

States, however, may not enroll dual eligibles, American Indians, or children with special health care needs in a managed care program under this authority. As of the summer of , 21 states were operating a total of 24 managed care programs under the Section a authority. Offering managed care services under the authority of Section a of the Social Security Act.

States also may initiate a voluntary managed care delivery system by executing contracts with MCOs selected through a competitive procurement process. Requesting waivers under the provisions of Section b of the Social Security Act. These waivers permit a state to implement a managed care program that a restricts the types of providers that program enrollees may use Sec.

Requesting a combination of waivers under Sections b and c. The Section c waiver authority permits a state to provide home and community-based HCB services that otherwise would not qualify for federal financial participation FFP , while the Section b waivers allow a state to use managed care techniques in operating its program.

Requesting secretarial approval of statutory waivers under Section of the Social Security Act to operate a managed care program.

The secretary of the U. Department of Health and Human Services HHS has broad authority under Section to grant waivers that allow a state to operate a research and demonstration program aimed at improving the effectiveness of services provided under the various titles of the Social Security Act.

Over the past 30 years, a number of states have used this authority to make sweeping, structural changes in the financing and delivery of Medicaid services, including the introduction and expansion of managed care services. All of the statutory authorities discussed above permit states to circumvent the following requirements of Medicaid law: Statewideness: The waiver allows states to operate managed care programs in only selected geographic area s.

Comparability of services: The waiver allows states to provide differential benefits to designated groups of managed care program beneficiaries. Freedom of choice: The waiver allows states to restrict beneficiaries to receiving services through a managed care plan or a primary care provider. These requirements are as follows: Plans must grant federal and state auditors access to their financial accounts and program records. Plan enrollees must be afforded the right to disenroll within the first 90 days without cause and every 12 months thereafter.

Plans must maintain encounter data and provide this data at a level of detail and frequency specified by HHS. In risk-based managed care plans, states delegate responsibility to the MCO for creating and maintaining a comprehensive provider network. To ensure that managed care plans contract with adequate numbers and types of providers, including providers of specialty services, states often include network requirements in their MCO contracts.

MCOs also are contractually responsible for ensuring that providers are properly credentialed or licensed. Care management and coordination. Plans also may be obligated to assign certain enrollees i. Customer service and member education. Plans are contractually responsible for ensuring that enrollees receive information on accessing services and have their questions and concerns addressed.

Toll-free phone lines and ombudsman programs are commonly used in performing this function. Quality standards and reporting. In addition to federal requirements governing external quality reviews and reporting, states may impose other quality management requirements. Data gathering and reporting. The Federal Government and the states impose various data collection and reporting requirements on managed care plans. These requirements usually include enrollment data, encounter data, and data related to various quality measures.

Monitoring and evaluation. States are required to determine whether managed care plans are complying with contractual requirements. Some states instruct health plans to file frequent, highly structured performance reports, while others impose fewer monitoring requirements, relying to a greater extent on ad hoc monitoring and reporting.

Contract language often specifies the capitated payments a managed care plan is entitled to receive. Frequently, the contract language also spells out standards governing payment processing timelines. Corrective actions. States increasingly are mandating managed care for previously exempt or excluded Medicaid beneficiaries, including Supplemental Security Income SSI -eligible children with disabilities, children with special health care needs, and seniors and people with disabilities who [xxvi] are not dually eligible for Medicare and Medicaid benefits.

Established an Integrated Care Resource Center to provide technical assistance to all states interested in coordinating and integrating Medicare and Medicaid services to dual eligibles.

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