Medicaid Managed Care: The Case for Transparency in the Biden Administration

On the way out the door, CMS Administrator Seema Verma issued changes to Medicaid managed care regulations that, among other things, weaken the standards for measuring the adequacy of managed care organization (MCO) provider networks. These changes, which will be effective December 14, were adopted over the objections of CCF and other beneficiary advocates. They are sufficiently harmful that they made the cut for the Sabotage Watch Tracker, a timeline of actions taken by the Trump Administration to undermine the Affordable Care Act maintained by the Center on Budget and Policy Priorities. Nonetheless, important provisions in the 2016 Managed Care Rule somehow survived the Administrator’s “rollback”.

Among those survivors are requirements for transparency of information about the performance of individual MCOs. These include requirements that state Medicaid agencies post on their websites the contracts that they enter into with each MCO; the documentation of the adequacy of each MCO’s provider network; the names of the accountable senior management of each MCO; and the results of periodic audits of each MCO’s financial and encounter data. In addition, states are still required to post the Annual Technical Reports prepared by the External Quality Review Organizations (EQROs) with which the state contracts. As our colleague David Machledt at the National Health Law Program explains, these annual EQRO reports have the potential to help advocates and the public better understand whether individual MCOs are furnishing services that are accessible and of adequate quality for adult and child beneficiaries alike.

Of course, a federal regulatory requirement is one thing; state agency compliance is sometimes another. Ongoing research by my CCF colleagues Allie Corcoran and Emma Hurler has found that state agency websites in Iowa and other states do not post some items required by federal regulations.  In addition, the state websites they’ve reviewed to date generally do not post information that, while not required by federal regulation, is essential to understanding how individual MCOs are performing. One example: the number of children enrolled in each MCO, stratified by age (e.g., 0-3, etc.) and race and ethnicity. That said, they have been able to locate annual EQRO reports that contain some MCO-specific performance data, although some reports are more informative than others.

While the managed care regulations are not as strong as they could be, the version that remains standing after Administrator Verma’s amendments contains important transparency requirements. The Biden Administration can and should restore the previous network adequacy standard, but it will have to do so through notice-and-comment rulemaking, which will take time and resources. As my colleague Joan Alker has noted, time and resources will initially be in short supply: the new Administration will have a long list of Trump Administration actions to unwind, starting with work requirements waivers. And the list could well grow longer between now and January 20 if more harmful waivers are approved. Already, proposed “Good Guidance” rules have been issued in final form; can the proposed “SUNSET” regulation be far behind? The new CMS management will have to do all of this unwinding while trying to bring the coronavirus pandemic under control, help states address the opioid epidemic, reduce maternal mortality and morbidity, and reverse the increase in the number of uninsured children.

And that is just for starters.

It’s likely that the Biden Administration does not lack for free advice, but just in case, here’s some more. First, unwind Trump Administration actions that attempt to harm Medicaid and its beneficiaries by weaponizing red tape and program integrity. After the unlawful State Medicaid Director letters and accompanying waivers have been unwound, and after proposed rules have been launched to unwind the misguided regulations, pivot to making Medicaid work better.

Given that 39 states and the District of Columbia contract with MCOs, that 69 percent of all Medicaid beneficiaries are enrolled in MCOs, and that the federal government alone is projected to spend $194 billion on Medicaid managed care this fiscal year, one important initiative would be to bring greater transparency to Medicaid managed care, using current federal regulations as the base. The new CMS should remind states of the MCO-specific transparency requirements, which have been in effect since July 1, 2017 (there’s been no subregulatory guidance on transparency). Then it should check for compliance.

The key here is that the transparency involves MCO-specific data. Statewide data that aggregates the performance of all the MCOs operating in that state can be helpful as an indicator of how the state’s managed care program is doing overall. For example, there is demonstrable variation in Child Core Set results among states with high managed care penetration. But without performance data specific to individual MCOs, it’s simply not possible for advocates or the public to know which MCOs are performing well for children and which are not. And without that knowledge, it’s not possible for advocates or the public to hold poor performers—and the state agencies contracting with them—accountable for results.

This won’t impose new data collection requirements on MCOs or state agencies, and it won’t entail new costs for the federal government or the states. The information is already available to MCOs, it’s already collected by state agencies and EQROs, and the federal government has already paid for it. Transparency means only that the information be posted on the state Medicaid agency’s website so that the public can access it.

It just doesn’t seem like too much to ask.

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