++ The circumstances under which an appeal process can be expedited and how to request it. Commenters also noted that plans, similar to states, should be given the flexibility to deploy specific tactics aimed at encouraging the provision of high-quality and cost-efficient care, and that CMS can continue to add value in this area by disseminating various state approaches and sharing both policy and operational best practices. VENDOR DRUG PROGRAM The Medicaid/CHIP Vendor Drug Program makes payments to contracted pharmacies for prescriptions of covered outpatient . We are not finalizing the proposed addition of the term PCCM entity to paragraph (b)(6) as proposed, but are finalizing the requirement that the state provide the demographic information listed in 438.340(b)(6) for each Medicaid enrollee to the individual's MCO, PIHP, PAHP, or PCCM entity at the time of enrollment at 438.54(b)(3). The lack of transparency in the use of rate ranges has also been a significant concern for us; when we finalized the 2016 final rule, we explained that elimination of rate ranges would make the rate setting and the rate approval process more transparent (81 FR 27567). We sought comment on this belief. at 62. Response: We understand the commenter's concerns; however, as noted, we undertook a comprehensive review of the current regulations and developed proposals to achieve a better balance between appropriate Federal oversight and state flexibility. While the state's actuary is required to certify rate ranges and must describe the risk adjustment methodology in the certification and certify the methodology, the state's actuary is not required to certify risk-adjusted rate ranges (that is, the rate ranges with the risk adjustment methodologies applied to reflect the actual payments potentially available to the managed care plan). External Quality Review Results (438.364), 18. We believe that all Medicaid managed care plans have annual revenues in excess of $38.5 million; therefore, we do not believe that this final rule will have a significant economic impact on a substantial number of small businesses. Since the 2016 final rule was published, some stakeholders expressed that they believed that the preamble was not clear about when states need to comply with the CHIP managed care regulations. Response: As we stated in the 2016 final rule (81 FR 27661), we decline to adopt quantitative standards for time and distance. Underlying that 2016 final rule with regard to 438.68(b) and our 2018 proposed rule is a belief that states should be allowed to set appropriate and meaningful quantitative standards for their respective programs. ++ The reasons for the adverse benefit determination, including the right of the enrollee to be provided upon request and free of charge, reasonable access to and copies of all documents, records, and other information relevant to the enrollee's adverse benefit determination. If states want to utilize public comment periods, technical expert panels, or conduct specific studies on access to care to help inform their rate setting, including rate ranges, states are welcome to utilize such approaches. We solicited comments on whether our more detailed regulation text, which incorporates specific provisions of subpart F of part 438, was sufficiently clear and detailed for the appropriate administration of grievances and appeals in the CHIP context. In the November 14, 2018 proposed rule, we proposed to make several revisions to the QRS regulations at 438.334. We also proposed to define supplemental payments in 438.6(a) as amounts paid by the state in its FFS Medicaid delivery system to providers that are described and approved in the state plan or under a waiver and are in addition to the amounts calculated through an approved state plan rate methodology. Tables 2 and 3 set out our annual burden and burden reduction estimates. http://www.pewinternet.org/fact-sheet/mobile/. As finalized in the 2016 final rule, 438.6(c)(1) permits states to, under the circumstances enumerated in 438.6(c)(1)(i) through (iii), direct the managed care plan's expenditures under the contract. 11. One commenter expressed concern that the requirement to provide documentation duplicates existing policy. a. A few commenters requested clarification on how the requirement to report allowed and paid amounts will apply to subcapitated arrangements with providers that do not have clear payments for individual services and do not use a per service payment structure. (4) The Secretary, after consulting with States and other stakeholders, shall issue guidance which describes the criteria and process for determining if an alternative QRS system is substantially comparable to the Medicaid managed care quality rating system in paragraph (b) of this section. Because 438.364 applies to CHIP through an existing cross reference in 457.1250(a), separate CHIPs must also come into compliance with the requirements of 438.364 for external quality reports submitted on or after July 1, 2021. 25. Many commenters stated that the proposal would provide greater flexibility for communicating with beneficiaries, increase readability for beneficiaries, reduce costs and logistical efficiencies associated with printing and mailing, and provide greater consistency with overlapping Federal regulations. ++ The enrollee's right to request an appeal of the MCO's, PIHP's, or PAHP's adverse benefit determination, including information on exhausting the MCO's, PIHP's, or PAHP's one level of appeal and the right to request a State external review in accordance with the terms of subpart K of part 457; ++ The procedures for the enrollee to exercise his or her rights to an appeal. The commenter noted that the proposed changes may limit full integration in instances where a beneficiary in a Medicaid managed long term care plan is enrolled in an unaligned (that is, offered by a separate organization) Medicare Advantage plan such as a Dual Eligible Special Needs Plan offered by a different organization than offers the Medicaid plan in which the person is enrolled. [11] http://www.pewresearch.org/fact-tank/2015/04/30/racial-and-ethnic-differences-in-how-people-use-mobile-technology/. States that are initially transitioning populations and services from fee-for-service to managed care must comply with 438.6(d)(6) as amended effective July 1, 2021 for Medicaid managed care rating periods starting on or after July 1, 2021. Response: We disagree that our proposal unnecessarily constrains states' authority under sections 1902(a)(2) and 1903(w) of the Act to draw upon a variety of state and local sources to fund the non-Federal share of medical assistance costs, as our proposal does not limit states from using permissible sources of the non-Federal share to fund costs under the managed care contract. These states have expressed that to discontinue existing effective processes for routing crossover claims to their managed care plans to comply with this provision adds unnecessary costs and burden to the state and plans, creates confusion for payers and providers, and delays provider payments. Comment: Many commenters supported the proposal to require only quarterly updates for paper directories for plans that offer a mobile enabled directory in lieu of monthly updates. We believe the change increases flexibility for states without affecting burden on states since it does not require states to take any action. To increase transparency regarding state use of the exemption from the Medicaid EQR for certain MCOs, we proposed to add a new 438.362(c) to require that states annually identify on their website, in the same location as where EQR technical reports are posted, the names of the MCOs it has exempted from EQR, and when the current exemption period began. If being used to meet the monthly paper director update requirement in 438.10(h)(3), errata sheets must be inserted into a paper directory. A typographical error was made in the proposed regulatory text at 438.10(d)(2). It is financed through Social Security taxes and premiums. As provided by 438.7(c)(2), if the state determines that a retroactive adjustment to the capitation rate is necessary, the retroactive adjustment must be supported by a rationale for the adjustment and the data, assumptions, and methodologies used to develop the magnitude of the adjustment must be adequately described with enough detail to allow CMS or an actuary to determine the reasonableness of the adjustment. Additionally, commenters recommended requiring states to measure network access at the subnetwork level, that is, when a managed care plan restricts its enrollees to using only a portion of the plan's larger network, if managed care plans impose subnetwork access requirements on enrollees. We are committed to a stakeholder engagement process that captures the diverse viewpoints of the Medicaid and CHIP community. A few commenters supported CMS' proposal to work with stakeholders to develop sub regulatory guidance on what it means for an alternative QRS to yield substantially comparable information. For example, taglines in a font size smaller than 18-point would permit states to more easily use postcards and tri-fold brochures, which may be more effective for relaying certain information since they are shorter and offer more design options for visual appeal. Based on our experience with implementing state directed payments, states have been submitting proposals to CMS for significant changes to provider fee schedules under 438.6(c)(1)(iii), particularly for uniform dollar or percentage increases, and we believe at this time that we should continue to monitor these payment arrangements on an annual basis. We will engage with states and other stakeholders in developing the sub regulatory guidance specifying the criteria and process for determining the substantially comparability standard, as required under 438.334(c)(4). While allowed amount data submitted by managed care plans to states may not be utilized as routinely as paid amount data in setting capitation rates or oversight activities, it nonetheless provides states and CMS insight into important aspects of a managed care plan's network, namely, its fee schedule and contractually negotiated rates. For Start Printed Page 72761example, 438.4(c)(1)(i) requires that the state's rate certification identify and justify the assumptions, data, and methodologies used to develop the upper and lower bounds of the rate range. A few commenters requested clarification that the +/1.5 percent was intended to be calculated as a percentage of the certified rate. We also agree that multi-year approval of payment arrangements listed at paragraphs (c)(1)(i) and (ii) can encourage providers to make multi-year commitments to quality outcomes. Commenters also noted support for the proposal that states cannot pay managed care plans at different rates within the range based on IGT agreements. Comment: One commenter expressed concerns that the only alternative considered was leaving the 2016 final rule as is. A risk mitigation strategy is a means to protect the state, or the managed care plan, against the risk that assumptions (not only based on health status of enrollees) underlying the rate development will not match later actual experience. Section 438.6(b)(1) applies to any and all mechanisms or arrangements that have the effect of sharing risk between the MCO, PIHP, or PAHP, and the state on an aggregate level. Further, we explicitly clarify here that certain financing requirements in statute and regulation are applicable across the Medicaid program irrespective of the delivery system (for example, fee-for-service, managed care, and demonstration authorities). Burden and/or burden reduction estimates associated with the activities (other than information collections as defined in the Paperwork Reduction Act) that will be necessary for generating the benefits listed in this final rule. See Chapter V Network and Access Standards and Monitoring for Special Provider and Service Types.. We invited comment on these specific proposals and whether additional conditions should be considered to ensure that rates are actuarially sound. At 438.4(c)(2)(iv)(A) through (C), we are finalizing the list of information that must be posted on the state's website required by 438.10(c)(3): (A) The upper and lower bounds of each rate cell; (B) a description of all assumptions that vary between the upper and lower bounds of each rate cell, including for the assumptions that vary, the specific assumptions used for the upper and lower bounds of each rate cell; and (C) a description of the data and methodologies that vary between the upper and lower bounds of each rate cell, including for the data and methodologies that vary, the specific data and methodologies used for the upper and lower bounds of each rate cell. Mandated fee schedules that comply with all applicable regulatory requirements and do not result in higher payment for higher FMAP populations may be used as the basis for rate setting for the managed care contracts. One commenter noted that our proposal would redefine state supplemental FFS payments and could exclude transitioning pass-through payments to state directed payment arrangements in the future. ++ In paragraph (e)(1), we are finalizing as proposed the requirement that states ensure CHIP managed care entities comply with the provisions at 438.408(b) (relating to the timeframe for resolution of grievances and appeals), (c)(1) and (2) (relating to the extension of timeframes for resolution of grievances and appeals), (d) (relating to the format of the notice of resolution for grievances and appeals), and (e)(1) (relating to the content of the notice of resolution for grievances and appeals). 24. Lastly, we proposed to make directories singular (directory) at Start Printed Page 72799438.10(h)(3)(ii) which would avoid implying that a managed care plan must have more than one directory of providers. After consideration of public comments and for the reasons articulated in the proposed rule and our responses to comments, we are finalizing the amendment to 438.10(h)(1)(vii) as proposed. We are aware that Medicare Advantage adopted different regulations on the treatment of fraud prevention expenditures and expanded the definition of QIA in 422.2430 and 423.2430 to include all fraud reduction activities, including fraud prevention, fraud detection, and fraud recovery. We acknowledge that state direction of provider payments by managed care plans, as permitted under 438.6(c), can require that managed care plans adopt specific payment parameters for specified providers and can require that managed care plans participate in specified value-based purchasing or performance improvement initiatives; however, we believe that managed care plans retain the ability to reasonably manage risk and still have adequate discretion in managing their contracts with providers, even in circumstances where states may require managed care plans to adopt specific parameters for provider payment. 9. We are not summarizing or responding to those comments. The State must ensure that its contracted MCOs, PIHPs, and PAHPs comply with the provisions at 438.414 of this chapter. Response: We proposed and are finalizing additional types of payment arrangements that states may direct their managed care plans to use for paying providers that furnish covered services, to enable states to achieve specific state goals and objectives related to Medicaid payment, access to care, and other delivery system reforms at a local level. Response: We disagree with commenters and believe that it is critical for our rules to be technically accurate. a federally mandated, state-administered government program for individuals with incomes below the federal poverty line. Children's Health Insurance Program (CHIP) Managed Care, B. Therefore, regardless of whether that proposed rule is finalized, we are finalizing conspicuously visible in 438.10(d)(2), (3), and (6) as explained in this final rule. We addressed data standardization and file formats for submission of encounter data in the 2016 final rule in 438.242(c)(4), which specifies submission of encounter data to the state in standardized ASC X12N 837 and NCPDP formats, and the ASC X12N 835 format as appropriate. We remain committed to these goals, and to our overarching goals of improving fiscal and program integrity within Medicaid managed care rate setting. (A) Is based on the utilization and delivery of services; (B) Directs expenditures equally, and using the same terms of performance, for a class of providers providing the service under the contract; (C) Expects to advance at least one of the goals and objectives in the quality strategy in 438.340; (D) Has an evaluation plan that measures the degree to which the arrangement advances at least one of the Start Printed Page 72839goals and objectives in the quality strategy in 438.340; (E) Does not condition provider participation in contract arrangements under paragraphs (c)(1)(i) through (iii) of this section on the provider entering into or adhering to intergovernmental transfer agreements; and, (iii) Any contract arrangements that direct the MCO's, PIHP's, or PAHP's expenditures under paragraph (c)(1)(i) or (ii) of this section must also demonstrate, in writing, that the arrangement. Letter to the nation's Governors on March 14, 2017: https://www.hhs.gov/sites/default/files/sec-price-admin-verma-ltr.pdf. We proposed amended paragraph (c)(2)(ii) as explicitly providing that payment arrangements under paragraph (c)(1)(iii)(A) do not require prior approval from us; we proposed to retain the requirement that such payment arrangements meet the criteria in paragraphs (c)(2)(ii)(A) through (F). Commenters also requested clarity on whether the transition mechanism will require three equal reductions (331/3 percent annually) to the calculated aggregate supplemental payment maximum or whether reductions are required under the new transition period. States wishing to modify the capitation rates within a rate range during the rating year would be required, in proposed 438.4(c)(2)(iii), to provide a revised rate certification demonstrating that the criteria for initially setting the rate within the range, as described in the initial rate certification, were not applied accurately; that there was a material error in the data, assumptions, or methodologies used to develop the initial rate certification and that the modifications are necessary to correct the error; or that other adjustments are appropriate and reasonable to account for programmatic changes.
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