A Closer Look at the Network Adequacy Provisions of CMS’s Proposed Medicaid Managed Care Rule

Editor’s Note: Since this post was published, CCF submitted formal comments on the Managed Care proposed rule. 

Last week my colleague Kelly Whitener promised readers of the Say Ahhh! Blog a series of blogs on the proposed rules that CMS has published to improve access to care in Medicaid and CHIP.  Promises made, promises kept.  This blog is about the provisions of the proposed managed care rule relating to network adequacy.  There are lots of other moving parts in the proposed rule, so you can expect more blogs, but this should keep you entertained for now.

Medicaid managed care organizations (MCOs) are complicated, but their basic concept is not.  The job of an MCO is to manage care—i.e., to ensure that enrolled beneficiaries receive the care they need under the terms of the MCO’s contract with the state Medicaid agency.   Managing care starts with selecting a network of providers—primary care practitioners, specialists, clinics, hospitals, etc.—to deliver the services the MCO is contracted to furnish to its enrollees.  If an MCO’s provider network is inadequate to that task, its enrollees will not receive the coverage to which they are entitled.

Current CMS regulations governing Medicaid managed care contain standards for provider networks that, judging from research findings, can at best be characterized as ineffective. This in part reflects the successful efforts of the Trump administration in November 2020 to dilute network adequacy requirements by allowing states to adopt any “quantitative standard” of their choosing for primary care, OB/GYN, behavioral health, and other services.   There is no minimum federal quantitative standard and there is no dedicated enforcement mechanism to ensure MCO compliance whatever “quantitative standard” the state has chosen to adopt.

The proposed managed care rule would fundamentally change this approach.  It would require that states both establish appointment wait time standards within federal guidelines and enforce those standards through the use of “secret shopper” surveys.  In doing so, it would more closely align network adequacy standards for Medicaid MCOs with those applying to Qualified Health Plans (QHPs) in the federally-run Marketplaces.  (In the past, these standards differed considerably, resulting in wide variation from state to state and within states).

More specifically, the proposed rule would leave in place the current requirement that states “develop” quantitative network adequacy standards of their choosing but it would add a requirement that they also “establish and enforce” appointment wait time standards.  For routine primary care appointments for both children and adults, the state’s standard could not exceed 15 business days from the date of request.  The same 15 business-day outer bound would apply to requests for obstetrics and gynecological appointments.  In the case of routine appointments for outpatient mental health and substance use disorder services, for both children and adults, appointment wait times could not exceed 10 business days.

An individual MCO’s compliance with this network adequacy standard would be determined by how often enrollees are able to obtain appointments within the wait times specified by the state.  An appointment availability rate of 90 percent or more would be considered compliance; that is, at least nine out of ten times enrollees do not have to wait longer for an appointment than the state’s standard.  This 90 percent compliance standards, along with the federal wait time guidelines, are similar to those for QHPs set forth in the 2023 Final Letter to Issuers (implementation has been postponed until plan years beginning on or after January 1,  2025).

To measure compliance, the proposed rule would require states to contract with independent entities to conduct annual “secret shopper” surveys of each MCO’s compliance with the appointment wait time standards.  “Secret shopper” surveys, in which researchers call the offices of providers and present themselves as consumers seeking to schedule appointments, have proven effective at identifying gaps in the availability and accessibility of network providers as well as the accuracy of provider directories.  (The proposed rule would also require states to use “secret shopper” surveys to determine if the information in MCO provider directories is accurate).

The proposed rule would require state Medicaid agencies to post on their websites the appointment wait time standards that MCOs must meet as well as the results of the “secret shopper” surveys measuring compliance by each MCO with those standards.  This transparency about the performance of individual MCOs should, in and of itself, help to improve the adequacy of provider networks; neither MCO managements nor state agencies should want to be publicly associated with networks of providers found to be unavailable to enrollees.  In addition, the proposed rule provides that if a state Medicaid agency or CMS identifies an area in which an MCO’s access to care “could be improved,” the agency must submit a “remedy plan” to CMS that addresses the access issue within 12 months and submit quarterly reports to CMS on the progress of implementation.

Here’s the catch.  The effective dates for these new requirements are far out in the future.  The appointment wait time standards would not take effect until at least 3 years after the effective date of the final version of this proposed rule.  For the “secret shopper” surveys, the implementation date is even farther out:  4 years after the final rule is effective.  This means these regulatory improvements, if adopted in a final rule issued next spring, would not take effect until 2027 or 2028, respectively.

We’re not even halfway through 2023.  In the four or five years from now until implementation of these new requirements, inadequate MCO provider networks, as measured by appointment wait times, could remain inadequate, and beneficiaries enrolled in those MCOs could have difficulty accessing care.  As noted above, appointment wait time standards will apply to QHPs in the federal Marketplaces beginning in 2025; CMS should align the Medicaid effective dates accordingly. (Of course, nothing prevents states from adopting appointment wait time standards or from conducting “secret shopper” surveys to monitor compliance with those standards, or from posting the standards and the MCO-specific results on their websites before 2027 or 2028.)

Wherever CMS lands—and especially if it retains the excessively long lead times it has proposed—it should deploy transparency to improve access to MCO services while the notice-and-comment process runs its course.  It could do this by posting on its website the performance metrics for individual MCOs that are currently available to it—not just those relating to network adequacy, but all the access and quality metrics that states currently report.  That would not burden states or MCOs with additional data requests and would enlighten us all.

Andy Schneider is a Research Professor at the Georgetown University McCourt School of Public Policy.