United States: Medicaid Managed Care Update: A Middle Ground For Network Adequacy Standards

This article is part of a series that takes an in-depth look at several proposals that would affect managed care organizations, health care providers and other industry stakeholders participating in, and contracting with participants of, state Medicaid and CHIP managed care programs. This installment explores the details of the provider network adequacy proposals.  Click here to read the other articles in the series.

Key Takeaways

  • The CMS's proposed rule would require states to adopt time and distance accessibility standards for seven provider types, but CMS has refrained from mandating these standards.
  • When establishing network adequacy standards, states that have managed LTSS programs would have to account for the unique needs of Medicaid beneficiaries requiring long-term care.
  • When developing network adequacy standards, states would also need to consider additional factors, such as cultural competency.

The national debate regarding the adequacy of provider networks in the post-Affordable Care Act (ACA) period is occurring on a new front, thanks to the Centers for Medicare & Medicaid Services's (CMS's) proposed rule (Proposed Rule) to modernize regulations governing state Medicaid managed care programs and Children's Health Insurance Program (CHIP) managed care arrangements.

Prior to the Proposed Rule's release, patient groups and the Office of the Inspector General (OIG), among others, had grown increasingly concerned that states had taken insufficient steps to ensure that managed care organizations and entities sponsoring prepaid ambulatory health plans and prepaid inpatient health plans for Medicaid and CHIP (collectively, Sponsors) maintained adequate access to covered services. In December 2014, the OIG released a report finding many beneficiaries had encountered significant wait times for physician appointments.  Just last month, California's state auditor released a report criticizing state officials overseeing the state Medicaid managed care program after finding incorrect or missing data on provider networks, inaccurate and outdated information in provider directories and other similar problems.

The Proposed Rule would address some of these issues, in part through requirements that states adopt maximum time and distance standards for select provider types that are frequently used by Medicaid and CHIP enrollees. Also among the proposals is a new set of network adequacy standards for Sponsors participating in state Long-Term Services and Supports (LTSS) programs. Although the Proposed Rule's network adequacy standards are intended to be more rigorous than those in the current regulations applicable to Medicaid managed care and qualified health plans (QHPs) offered on health insurance exchanges, states nonetheless would retain the authority to adopt standards for their respective jurisdiction. This approach seems to reflect an effort by CMS to balance a variety of competing issues, including deference to state agencies to administer their programs, but industry stakeholders are not in agreement as to what the appropriate balance should be.

CMS seeks comment on a variety of the proposals regarding network adequacy, providing an opportunity for stakeholders to raise issues and alternatives for consideration. Comments on the Proposed Rule are due to CMS no later than 5 pm (EDT) on July 27, 2015.

Proposed Time and Distance Standards:  Balancing Federal Concerns over Access to Care with State Autonomy over Network Adequacy

States would need to develop standards allowing Medicaid and CHIP enrollees to have access to certain provider types within a defined distance and/or travel time based on language in the Proposed Rule. Currently, CMS only requires states to "ensure that all services covered under the State plan are available and accessible to enrollees of" Sponsors. (42 C.F.R. § 438.206(a).)

If finalized, the standards set out in the Proposed Rule would require states to ensure that Sponsors' provider networks offer sufficient access to seven provider types:

  • Primary care physicians
  • Obstetricians/gynecologists
  • Pediatric dental
  • Behavioral health providers
  • Hospitals
  • Pharmacies
  • Specialists

Children comprise a significant percentage of Medicaid (and all CHIP) enrollees, so the Proposed Rule expressly provides that pediatric primary care providers, specialists and dentists must be included in states' evaluations of network adequacy.  Although states would be permitted to apply for exceptions to these standards during the waiver process, a state nonetheless would be required to monitor and evaluate access to any provider type that is excepted from these access requirements.

CMS elected not to define the maximum travel time and distance for any provider type, instead preserving states' authority to develop their own standards. CMS explains that it did not adopt a provider-to-enrollee ratio or other standard that states must satisfy because "time and distance standards present a more accurate measure of [members] ability to have timely access to covered services" than provider-to-enrollee ratios. States must nevertheless report whether such exceptions are warranted, on an annual basis, suggesting that CMS may be increasingly reticent to grant exceptions unless justified.

In the preamble to the Proposed Rule, CMS requests comments on whether to permit states to select their own network adequacy criteria or, conversely, whether to adopt even more precise standards for states to follow.

Comparison to Network Adequacy Standards for QHPs and Medicare Advantage

The Proposed Rule represents a middle ground between the detailed Medicare Advantage (MA) network adequacy standards and the more flexible regulations for QHPs. MA Organizations, for example, must maintain maximum travel time and distance standards for each county in which an MA Plan operates. Such standards vary depending on complex formulas factoring in the county's population density and provider mix (e.g., CY2015 MA HSD Provider and Facility Specialties and Network Adequacy Criteria Guidance). QHPs, by contrast, need only ensure that enrollees have access to the "sufficient . . . number and types of providers . . . to assure that all [covered] services will be accessible without unreasonable delay." (45 C.F.R. § 156.230.)

With the Proposed Rule, CMS appears to be moving away from more general network adequacy standards such as those for QHPs, but without going so far as to adopt the prescriptive MA network adequacy regulations that are applicable to Sponsors. Inherent in CMS's decision is the recognition of states' historical role in overseeing provider networks for their Medicaid and CHIP managed care programs, as well as for the commercial insurance.

Practical Considerations

  • Although standardized network access requirements would provide some consistency among states' respective Medicaid requirements, waivers and other modifications may undermine the value of national standards. Moreover, many Sponsors also offer QHPs on state or federal exchanges subject to states' network adequacy requirements. States' authority to adopt network adequacy standards for Sponsors and QHPs, however, may preserve continuity of care and consistency in operations, notwithstanding state-by-state variation.
  • The appropriateness of national network adequacy standards for specific provider types raises questions about the ability of Sponsors to satisfy these requirements in the absence of a state's waiver, particularly in rural areas and given the potential negotiating power of providers that meet one or more of these types of provider categories and that have a significant market share.
  • What is unclear is the extent to which perceived deficiencies in network adequacy may be the result of states' insufficient resources to verify Sponsor compliance with existing requirements, and thus, whether heightened requirements for provider networks would help to resolve current concerns.

Ensuring Access to Culturally Competent Care and Other Factors For Network Sufficiency

CMS, in the Proposed Rule, retains many of the current factors states must use to evaluate Sponsor plan networks. For example, when performing network adequacy assessments, states would still need to consider anticipated enrollment, utilization, provider mix, geographic location and providers' acceptance of new Medicaid members.

The Proposed Rule would require states to focus on culturally competent care by explicitly requiring them to consider each Sponsor's ability to serve limited English language-proficient enrollees and to provide care in a culturally competent manner.

Variation from Existing Regulations

Existing regulations already require states to monitor providers' cultural competency. Currently, states must ensure that "[e]ach [Sponsor] ... participates in the State's efforts to promote the delivery of services in a culturally competent manner to all enrollees, including those with limited English proficiency ..." (42 C.F.R. § 438.206(c)(2).) Additionally, any waiver application submitted by a state would need to address Sponsors' efforts to provide culturally competent services.

Practical Considerations

  • It is unclear whether states may factor in the particular cultural needs of their Medicaid and CHIP members when assessing network adequacy (although states may also consider "the anticipated Medicaid enrollment."). More explicit language permitting states to consider the extent to which beneficiaries require language assistance and other culturally competent services may be helpful to states and Sponsors with regard to states' evaluation of Sponsors' provider networks. Conversely, a national standard could provide less flexibility to states and Sponsors in evaluating the most appropriate way to proceed.

Further Input Requested for LTSS Network Adequacy Standards

For LTSS providers, CMS proposes time and distance standards that take into account the limited mobility of beneficiaries requiring long-term care services. Under the Proposed Rule, states would need to implement travel time and distance standards for any LTSS providers who travel to beneficiaries to provide services (e.g., home health), and separate standards for LTSS providers where the members travel to be treated by LTSS providers.

The proposed regulations applicable to LTSS network adequacy appear to offer states greater flexibility than the proposed time and distance standards for Sponsors generally.  For example, CMS does not propose to define the types of LTSS providers to which states must ensure access.  Because the federal government has not previously adopted network adequacy standards for LTSS, CMS appears to be providing states with the opportunity to tailor such standards in order to identify what approaches work best.

Encouraging Community Integration

States would need to develop LTSS network adequacy standards that encourage community integration under the Proposed Rule. States would be required to consider whether a Sponsor is preserving enrollee choice of provider as well as whether the Sponsor is "ensur[ing] the health and welfare of the enrollee and support[ing] community integration ..." Current Medicaid managed care regulations do not discuss community integration for enrollees requiring long-term care.  The Proposed Rule does not define what steps a Sponsor must take to promote community integration, and requests further comment on what factors should be considered, although CMS does identify the cost of outreach and coordination of care as potential salient factors.

Practical Considerations

  • When the Proposed Rule is finalized, Sponsors may need to develop, or at least re-evaluate, policies and procedures to ensure community integration. States and Sponsors may need to consider commenting on whether states should retain the authority to define and assess community integration efforts, as outreach will necessarily vary due do variations among states' Medicaid and CHIP populations and provider communities.

Considerations and Next Steps

CMS has emphasized throughout the Proposed Rule that CMS is open to changes that could increase or decrease states' authority to develop their own network adequacy requirements.  States and Sponsors may wish to consider submitting comments regarding whether states should retain greater control over network adequacy standards.

Medicaid Managed Care Update: A Middle Ground for Network Adequacy Standards

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Emails

From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.