The Department of Health and Human Services (HHS) has issued a final rule on managed care in Medicaid and the Children’s Health Insurance Program (CHIP). The rule is the first overhaul of Medicaid and CHIP managed-care regulations in more than a decade.
The long-awaited rule creates a quality rating system, allows states to set network adequacy standards, and limits how much insurers can spend on administrative costs.
Thirty-nine states and the District of Columbia contract with private insurers to manage their Medicaid populations, and 72% of beneficiaries are enrolled in such managed care plans.
According to the HHS, the final rule has four main goals: 1) supporting 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 protections; 3) strengthening program integrity by improving accountability and transparency; and 4) aligning rules across health insurance coverage programs to improve efficiency and help consumers who are transitioning between sources of coverage.
The rule’s key provisions include the following: