managed careOn April 26, 2016 the Department of Health and Human Services (HHS) announced the finalized version of a new rule on managed care in Medicaid and the Children’s Health Insurance Program (CHIP). The “rule advances delivery system reform, strengthens quality and consumer protections, promotes accountability, and aligns Medicaid managed care rules with other health insurance coverage programs.”

This is the first major overhaul of Medicaid and CHIP managed care regulations in over 10 years. The new regulations hope to help transform the healthcare system by improving healthcare delivery, spending and the way people think about their health. The finalized version of this rule affects both Medicaid managed care plans and the people who are enrolled in them.

“Medicaid delivers cost-effective, affordable health insurance coverage to millions of Americans. Today’s significant changes strengthen the program by improving the consumer’s care experience and supporting state efforts to deliver more coordinated, higher-quality care.”  –  HHS Secretary Sylvia M. Burwell

The National Association of Medicaid Directors’ (NAMD) released a statement in support of the CMS’ new goals and overhaul of Medicaid managed care regulations. Stating that they are “very pleased” with the proposed goals and that CMS took into account many of the suggestions NAMD proposed.   NAMD also commended the CMS for the taking into account that change doesn’t happen overnight, by implementing a timeline and phase-in process that will take place over the next three years.

Four Goals of the New Regulations

  1. States’ efforts to advance delivery system reform and improvements in quality of care for Medicaid and CHIP beneficiaries.
  2. Strengthening the consumer experience of care and key consumer projections.
  3. Strengthening program integrity by improving accountability and transparency.
  4. Aligning rules across health insurance coverage programs to improve efficiency and help consumers who are transitioning between sources of coverage.

To see more a more in depth breakdown of the proposed goals visit the HHS press release here (

Important Changes

  • The rule establishes Medicaid’s first Quality Rating System and help to clarify states’ authority “to enter into contracts that pay plans for quality or encourage participation in alternative payment models and other delivery system reform efforts.”
  • Hoping to improve the consumer experience for those people transition between cover programs, the rule aligns reporting of medical loss ratios with the Medicare Advantage program and the Marketplace, Medicaid plans’ appeals processes, and Medicaid’s requirements for disseminating consumer information with private market best practices.

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