Medicaid Managed Care Quality Strategy and Quality Rating System

The Medicaid and Children’s Health Insurance Program (CHIP) Managed Care Access, Finance, and Quality final rule makes significant improvements to managed care quality requirements, including boosting transparency and reducing reporting lag times. When fully enacted, these changes will transition states from reporting a single overall quality rating for a managed care plan to rating all mandatory measures individually for each plan. Apart from eliminating primary care case management (PCCM) entities from inclusion with other types of managed care plans, the final rule adopts the provisions of the proposed rule with minor changes for organizational clarity. However, there is a very long timeline on compliance with the new rules. In particular, the new managed care quality rating system (QRS) does not have to be implemented until the end of 2028 and the QRS website display will be at least two years later.

Managed Care State Quality Strategy

The managed care state quality strategy is a foundational tool for states to set goals and objectives relating to the quality of care and access for managed care programs. Under prior rules, each state contracting with managed care organizations (MCOs) was required to implement a written quality strategy for assessing and improving the quality of health care services furnished by an MCO, prepaid inpatient health plan (PIHP), or prepaid ambulatory health plan (PAHP). The new rules increase opportunities for interested parties (e.g., health care providers and consumer advocates) to provide input on the state’s managed care state quality strategy prior to review by the Centers for Medicare & Medicaid Services (CMS). In addition to when there is a significant change in the state’s quality strategy, the strategy must be reviewed every three years or whenever significant changes occur within the state’s Medicaid program. States must post the full evaluation of the effectiveness and results of the triennial review of the quality strategy, not just the state’s proposed plan, on the state’s website. States are also required to submit the results of the review for CMS review and input prior to adopting as final.

External Quality Review

External quality review of health plans must be conducted by an approved independent external quality review (EQR) organization for specific mandatory activities including validation of performance measures and improvement projects, compliance with disenrollment and enrollment requirements, and evaluation of network adequacy, among other standards. States may also conduct certain optional EQR activities, including a new provision allowing states to conduct evaluation of quality strategies, including State Direct Payments (SDP), and In Lieu of Services or Settings (ILOSs) that pertain to outcomes, quality, or access to health care services as an EQR activity. The rule applies to CHIP except the provision relating to SDPs, which are not applicable to CHIP. Of note, the reimbursement of EQR activities qualify for an enhanced 75% federal match. The rule requires EQR technical reports to include data from the mandatory network adequacy validation activity, as well as any outcomes data and results of quantitative assessments, such as the percentage of enrollees who participated in a performance improvement project (PIP) or patient satisfaction based the outcomes of the PIP. States must post the annual EQR technical report by April 30th of each year and notify CMS within 14 days of its posting. Additionally, the proposed rule would require states to maintain at least five years of EQR technical reports on their websites.

Medicaid Managed Care Quality Rating System (QRS)

The QRS is intended to arm enrollees with useful information about plans available to them, and to provide a tool for states to drive improvements in plan performance and the quality of care. Previously states were required to create and maintain a managed care QRS, but it was limited to a single overall star rating for each plan, which was inadequate for beneficiaries to select a plan that meets their needs and for holding states and plans accountable for the quality of care provided. The final rule advances the QRS as a one-stop-shop where enrollees can access information about Medicaid and CHIP eligibility and managed care, and compare plans based on quality and other factors key to plan selection, such as the plan’s drug formulary and provider network. The QRS must include all measures in the mandatory QRS measure set as described in the QRS technical resource manual, regardless of whether the state implements the model Medicaid and CHIP (MAC) QRS methodology or adopts a CMS-approved alternative QRS. States must use their beneficiary support systems – which are required of states – to assist enrollees in using the QRS to make informed health plan enrollment choices taking into consideration their individual healthcare needs. The beneficiary support system must be accessible by phone, in-person, and through the Internet, and provide choice counseling for all beneficiaries, assistance in understanding managed are.

QRS Website Display

As a second phase of the quality rating system, the final rule establishes requirements for a robust, interactive website display, which must comply with accessibility standards and was informed by intensive consultation with prospective users and iterative testing of a QRS website prototype. The display components must include information to help navigate and understand the content of the QRS website, including a statement of the purpose of the QRS, how to use the information to select a plan, how to access the beneficiary support system, and how any requested personal information will be used and whether it is optional or required. The display must allow beneficiaries to identify managed care plans available to them that align with their coverage needs and preferences. This includes identifying all managed care programs and plans for which a user may be eligible based on their age, geographic location, and dually eligible status (if applicable), as well as other demographic data. Additionally, it must include a description of the drug coverage for each managed care plan, including specific formulary information, as well as provider directory information or other provider information specified by CMS. Last, but not least, the display must include quality ratings, including mandatory measures stratified by dual eligibility status, race and ethnicity, and sex.

States will also be required to provide additional standardized information, specified by CMS, for each managed care plan that allows users to compare plans and programs including the plan name, internet hyperlink to the plan’s website, customer service telephone toll-free hot line. Standardized information will also include premium and cost-sharing; a summary of benefits and differences in benefits among available managed care plans including other CMS specifications such as whether prior authorization is required; and other metrics of managed care performance such as the results of secret shopper surveys.  States may choose to display additional non-mandatory website features after obtaining input from prospective users, including beneficiaries, caregivers, and tribal organizations if the state enrolls native populations in managed care. However, CMS approval is not needed to add website features beyond what is mandatory.

Technical Resource Manual

Beginning in calendar year 2027, CMS will publish a Medicaid managed care QRS technical resource manual annually. The manual must include an identification of all Medicaid managed care QRS measures, a list of the mandatory measures, any measures newly added or removed from the prior year, the subset of mandatory measures that must be displayed and stratified by factors such as race and ethnicity, sex, age, rural/urban status, disability, language, and other such factors as may be specified by CMS. It must also provide guidance on the methodology used to calculated and issue quality ratings, as well as the measure steward’s technical specifications for mandatory measures. If interested party input and public comment on mandatory measures are conducted in the calendar year the manual is published, it must also include a discussion of the feedback and recommendations, final modifications and timelines for implementation, and the rationale for not accepting or implementing specific recommendations.

Annual Reporting (§ 438.535)

Upon CMS request, and no more frequently than annually, the state must submit a Medicaid managed care quality rating system report in a form and manner determined by CMS. The report must include the mandatory measures identified in the most recent technical resource manual and the managed care program to which the measure applies. If a mandatory measure is not applicable, the state must provide a brief explanation as to why. The report must also include a list of any additional measures the state chooses to include in the QRS. In the report, the state must attest that all displayed ratings for mandatory measures were calculated and issued in compliance with these rules, as well as any deviations from the methodology. It must include a summary of each alternative QRS rating methodology that has been approved by CMS and the effective date thereof. If all data necessary to calculate a measure as required cannot be provided by the managed care plans, the state’s report must include a description of the data and why it presents an undue burden preventing the state from reporting and how the state plans to address the burden. The report must also include the date the ratings were published or updated, along with a link to the state’s QRS website.

Tricia Brooks is a Research Professor at the Center for Children and Families (CCF), part of the McCourt School of Public Policy at Georgetown University.