After much anticipation, CMS published a notice of proposed rulemaking on Medicaid and CHIP managed care early this summer. The proposed rule includes many changes centering around five principles: alignment with other coverage options; delivery system reform; payment and accountability improvements; beneficiary protections; and modernizing regulatory requirements and improving the quality of care. It also codifies the CHIP managed care provisions from the Children’s Health Insurance Program Reauthorization Act of 2009.

Why is the rule important? First, as we noted shortly after it was posted, the proposed rule marks the first major update to Medicaid and CHIP managed care regulations in more than a decade. Secondly, three-quarters of children are enrolled in Medicaid or CHIP managed care plans or primary care case management programs, so how managed care is delivered matters significantly.

We applaud CMS’s effort to update the Medicaid and CHIP managed care regulations; and we recognize the difficulty of the task. We reviewed the proposed rule carefully and prepared comments underscoring those areas of greatest importance and identifying areas where it could be strengthened. A big thank you goes out to the National Health Law Program (see NHeLP’s comments here) for their thoughtful analyses of the many complicated aspects of this proposed rule, which aided our own understanding immensely. Some key takeaways:

• Under the proposed rule, states would be required to post or link to vital consumer information, including enrollee handbooks, provider directories and drug formulary lists. Additionally, key program information including network adequacy standards and quality data, which has often been difficult to obtain in the past, must be posted in accessible formats on state websites. We believe the rule can be strengthened by requiring posting of important contract information, rather than allowing states the option to make such information available upon request. Moreover, we believe that all consumer information should be posted together on a section of the state’s website dedicated to consumers.

• Medical Loss Ratio. We strongly support the inclusion of an MLR for Medicaid and CHIP, but believe that much of its public policy value will be undermined if it is not readily available to the public. With that in mind, we recommended requirements for reporting and transparency of the MLR at both the state and federal levels.

• Quality Assessment and Improvement. We strongly support the requirement for a comprehensive statewide quality strategy that encompasses all Medicaid and CHIP delivery systems, including fee-for-service. This expanded scope offers much promise in advancing state efforts to measure and improve the quality of care provided to children and adults enrolled in our public coverage programs. We appreciate the requirement for a public engagement process as states developed their comprehensive statewide quality strategy, but urged CMS to strengthen the provision by specifying standards similar to those required under 1115 demonstrations.

• Enrollment Opportunity and Choice Counseling. All consumers should be allowed adequate time to review information and receive personalized assistance in selecting a managed care plan that best fits their needs. Research has shown that consumers are less likely to make an active choice if they are passively enrolled or auto-assigned to a managed care plan. Offering a specified period of coverage under fee-for-service and boosting access to information and consumer assistance are important strategies to encourage more beneficiaries to compare their options and make an informed choice, and in doing so, better understand how their managed care plan will work. However, the 14 days proposed in the rule is insufficient for consumers to wade through complex insurance information, and thus, we recommended that the final rule provide a 30-day standard enrollment period, while allowing exempt populations 45 days to choose a plan.

• The proposed rule largely maintains current requirements that allow consumers to disenroll in the first 90 days for any reason, or at any time with cause. We believe that two additional circumstances justify cause – if an enrollee’s primary care provider or a provider from whom the enrollee is receiving ongoing care leaves the network – and urged CMS to adopt these reasons. Additionally, we believe that aligning the annual opportunity to switch plans with renewal is a logical time for consumers to re-evaluate plans and would minimize consumer confusion and dissatisfaction that results when the two processes are not aligned. Lastly, we believe using the term ‘disenrollment’ as it applies to their annual opportunity to change plans can be confusing to enrollees and may discourage them from selecting a new plan and urged CMS to consider other terminology such as “open enrollment period” or “annual opportunity to change plans.”

• We applaud CMS for its recognition that network adequacy is a foundational component of a health plan’s ability and capacity to provide services and for proposing standards for network adequacy. We also are pleased that CMS proposed that states ensure that enrollees have access to all services covered in a manner that meets state accessibility and affordability standards. However, rather than allowing states to set up their own standards without any federal parameters, we recommended that CMS establish minimum, multi-faceted, quantitative standards for network adequacy, such as appointment wait times, provider-patient ratios for adult and pediatric primary and specialty care, and time and distance standards for primary and specialty care.

We also worked with 23 national child health organizations to highlight those aspects of the rule that are of particular importance for the healthy development of children in a letter to CMS Acting Administrator, Andy Slavitt. In particular, we note that the unique needs of children and pregnant women merit special consideration with respect to quality improvement and network adequacy standards.

The 60-day public comment period for the proposed rule closed on July 27, 2015. We expect the final rule to be published later this year or in early 2016. Then it will be time for us to roll up our sleeves and get to work on implementing these new policies intended to improve the delivery of managed care to children and families enrolled in Medicaid and CHIP.