A Closer Look at Transparency in the Medicaid Managed Care Rule

The Medicaid Managed Care Rule published on May 10 has lots of moving parts. As my colleague Leo Cuello explains, the rule includes provisions to increase the transparency of state directed payments (SDPs). The rule also contains a number of other transparency requirements that are the focus of this blog, most of which are identical to those CMS proposed a year ago. If implemented, these new requirements have the potential for changing the culture of opacity that has long existed in Medicaid managed care and has long undermined its effectiveness. (Transparency requirements in the Medicaid Access rule relating to fee-for-service payment rates are summarized in this blog by my colleague Kelly Whitener).

Transparency matters. In the 42 states (including DC) that contract with managed care organizations (MCOs), Medicaid purchases billions of dollars of services on behalf of tens of millions of enrollees. Oversight of these arrangements is, to say the least, challenging for state Medicaid agencies and CMS. Transparency about the performance of individual MCOs for children and other enrollees is essential to accountability of MCOs, state Medicaid agencies, and CMS alike.

The rule builds upon transparency requirements in current regulations issued in 2016. These begin with the requirement that state Medicaid agencies contracting with MCOs operate a public website that provides content specified in the regulations. In some cases, the requirement could be met by linking to the public websites of individual MCOs. The requirement took effect in 2017. Table 1 below indicates the content that the state agencies were required to post on the website and the dates by which the agencies were required to post that information.

A requirement that content be posted on a state agency website is one thing. Compliance with that requirement is quite another. As CMS notes in the preamble to the new rule:

“A State’s website may be the single most important resource for information about its Medicaid program and there are multiple requirements for information to be posted on a State’s website throughout 42 CFR part 438.…Despite these requirements, we have received input from numerous and varied interested parties since the 2016 final rule about how challenging it can be to locate regulatorily required information on some States’ websites. There is variation in how ‘‘user-friendly’’ States’ websites are, with some States making navigation on their website fairly easy and providing information and links that are readily available and presenting required information on one page. However, we have not found this to be the case for most States.”

As an interested party, we could not agree more.

To address this bureaucratic malpractice, the rule requires that state agency websites (1) place “clear and easy-to-understand labels” on documents and links and (2) include all content on one webpage, either directly or by link to individual MCO websites. The rule further requires that states verify the accurate function of the website and the timeliness of the information presented, at least quarterly. States have until the first rating period for contracts beginning on or after 2 years after July 9, 2024 to comply. For most states, that means 2027.

The rule reaffirms that all of the transparency requirements in Table 1 apply currently. Some of these requirements are already set forth in the section of the current regulations relating to transparency (42 CFR 438.602(g)(1)-(4)). To “help States verify their website’s compliance,” the rule adds the remaining current requirements to this checklist (438.602(g)(5)-(8), (12)-(13)), as well as references to the new information states are required to develop and post over the next five years (438.602(g)(9)-(11)). These additional requirements and their compliance dates are summarized in Table 2 below. The implementation runway is lengthy.

Going Forward

The Managed Care Rule presents advocates with a golden opportunity to use transparency to increase the accountability of individual MCOs (and the state agencies that contract with them) for their performance. Advocates could start by conducting an inventory of their state agency’s website to determine whether all of the information identified in Table 1 is posted as currently required and initiating a conversation with their state agency about any missing items. For extra credit, advocates could urge their state agencies to go beyond the federal minimum and post MCO-specific EPSDT participation data, as Minnesota has done, as well as the Annual Medical Loss Ratio reports that MCOs submit, as several states have done.

As noted, the rule requires that state websites be easily navigable, accurate, and up to date by 2027. Compliance with the current transparency requirements does not depend on whether a state complies with these new website requirements. Nor, for that matter, does the rule prohibit a state from making any necessary improvements to its website before 2027. But the fact is that, in many states, compliance will require a change of agency culture relating to transparency. One case in point: Illinois. And as the ongoing saga over the lack of transparency of Managed Care Program Annual Reports illustrates, that will not happen without sustained and effective state-level advocacy.

[This is part of a blog series on two key federal regulations that aim to improve access to care for people enrolled in Medicaid and CHIP across delivery systems. Learn more about the “Ensuring Access to Medicaid Services” and “Medicaid, CHIP Managed Care Access, Finance, and Quality” rules here.]

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