On April 22, 2024, the Centers for Medicare & Medicaid Services (“CMS”) submitted for public inspection two final rules amending the regulations governing Medicaid managed care organizations at 42 C.F.R. Part 438. The final rules, Managed Care Access, Finance, and Quality, and Ensuring Access to Medicaid Services, aim to improve access to care and quality outcomes for managed care beneficiaries. The final rules are scheduled to be published in the federal register May 10, 2024, and will become effective July 9, 2024.
Last year, Athene law published a blog series identifying the impact of the proposed rules. This is the second blog of a new series updating those previously published blogs to reflect the final rules.
Background
Most Medicaid managed care plans (“Plans”) are paid on a per member per month basis, resulting in a financial incentive for Plans to seek efficiencies and spend as little as possible for services. This economic pressure can have a deleterious effect on member access to providers and covered services. To ensure access and counterbalance the financial incentives, CMS imposes network adequacy requirements on Plans.
CMS’s overarching network adequacy standard is that Plan’s assure that payments for services are sufficient to enlist enough providers such that Medicaid enrollees have access to care and services, at least to the extent care and services are available to the general population in the geographic area. How CMS chooses to enforce this requirement has vacillated in recent years across different administrations. For example, in 2016, CMS moved to strengthen beneficiary access by imposing new time and distance standards and other network availability requirements on Plans. In 2020, CMS overhauled the determination of network adequacy by replacing the time and distance standard with the quantitative network adequacy standard, giving more flexibility to states to pick their own adequacy standards.
Despite these regulatory changes, several studies, including a 2022 Health Affairs study, concluded that Plans continue to overstate the availability of physicians in Medicaid. These studies found that, within managed care networks, the provision of Medicaid services is highly concentrated amongst a small percentage of physicians, and a lower percentage of primary care and specialty appointments are scheduled under Medicaid compared to private insurance. Accordingly, CMS was persuaded of the need for increased oversight of network adequacy and overall access to care.
As part of this increased oversight, the final rule requires the imposition of certain new quantitative standards. The final rule also requires states to consider the payment rates Plans offer to providers before granting exceptions to the network adequacy standards, including whether low payment rates contribute to a Plan’s inability to meet the network adequacy requirements."
Appointment Wait Time Standards
CMS finalized the new 42 C.F.R. section 438.68(e), which requires states to develop and enforce wait time standards for “routine” appointments. CMS also finalized Section 438.206(c)(1)(i), which requires that the wait time standards be included in Plan contracts with states.
Application: Appointment wait time standards apply to following services:
adult and pediatric outpatient mental health and substance use disorder (SUD);
adult and pediatric primary care;
obstetrics and gynecology (OB/GYN); and
additional type(s) of services determined by the state.
States may grant an exception to the wait time standard, however before doing so the state must consider, among other factors, the payment rates offered by the Plan to that provider type or for that service. This aligns with other “access” policies finalized in these rules that seek to strengthen payment rates for certain covered services. CMS clarified that appointment wait time standards for any additional types of services may only be enforced against Plans that cover those services under contract.
Maximum Wait Times: In alignment with wait time standards for marketplace plans, CMS finalized that routine appointments must be provided within:
10 business days for routine outpatient mental health and substance use disorder appointments;
15 business days for routine primary care appointments;
15 business days for routine OB/GYN appointments;
CMS chose not to define “Routine appointment” and instead encouraged states to create their own definitions. As long as states follow the above requirements, states may vary appointment wait time standards for the same provider type based on various factors like geography or service type. Plan compliance will be verified through secret shopper surveys.
Secret Shopper Surveys
CMS finalized the new 42 C.F.R. section 438.68(f), which requires states to use annual secret shopper surveys to determine Plan compliance with the Appointment Wait Time Standards and assess the accuracy of electronic provider directories. Secret shopper surveys involve a third party pretending to be an enrollee (or their representative) and trying to schedule an appointment with a provider listed on the Plan’s directory. The third party must be independent of both the state and managed care plans and conduct the surveys on random samples. Similar surveys in the past have revealed significant weaknesses in Medicaid access, stemming from listed providers not accepting any Medicaid patients, refusing to accept new Medicaid patients, or limiting the services offered to Medicaid patients due to financial constraints.
Timely Appointment Access: A secret shopper survey will be used to determine each Plan’s compliance with the appointment wait time standards. The surveys must include a random sample and be complete for a statistically valid sample of providers. Appointments offered through telehealth must be identified separately from in-person appointments in survey results and may only be counted toward compliance if the provider being surveyed also offers in-person appointments to the Plan enrollees.
Provider Directory Validation: The secret shopper surveys will also be used to validate electronic provider directory data for each of the provider types that are subject to the appointment wait time standards to the extent any of these services are included in the Plan’s provider directories. In assessing the accuracy of directories, secret shoppers must validate the following data elements:
The active network status with the managed care plan
The street address(es)
The telephone number(s); and
Whether the provider is accepting new enrollees
When a secret shopper identifies any errors, the state must receive this information from the entity conducting the secret shopper survey no later than 3 business days from the identification. The state must then send that data to the applicable Plan within 3 business days of receipt. Alternatively, the state could require the entity conducting the secret shopper survey to forward the information to the Plan. The Plan then has no later than 30 calendar days to update its electronic provider directory.
Compliance: Plans are deemed in compliance when the rate of appointment availability meets state-established standards at least 90 percent of the time.
Other Finalized Changes from CMS Related to Medicaid Managed Care Access
Changes in Operation of Provider Directory: Managed care plan electronic provider directories must now be (1) searchable and (2) include information on whether the provider provides telehealth services.
Changes in Terminology for Behavioral Health: For purposes of network adequacy and provider directories, “behavioral health” providers will now be reclassified as “mental health and substance use disorder” providers.
Assurance of Managed Care Plan Compliance with Network Adequacy Standards: States will now be required to review the secret shopper survey results and the Plans’ payment analysis prior to submitting their assurance of compliance with network adequacy standards to CMS.
As part of the state’s submission to CMS, CMS requires that the state submit their assurance of compliance report using CMS’s Network Adequacy and Access Assurances Report template, which was first published back in July 2022. CMS plans to revise the template so states can report the results of the secret shopper surveys of provider directory data validation and appointment wait time standards.
Remedy Plans When Managed Care Plans Cannot Meet Network Adequacy Standards: Should CMS, a state, or a Plan identify an issue with a Plan’s ability to meet network adequacy standards, including the appointment wait time standard, CMS requires that the state must now submit a twelve-month remedy plan to CMS within 90 calendar days of the state being made aware of the issue.
This remedy plan must provide specific steps, timelines, measurable and sustainable improvements, and responsible parties. CMS suggested a remedy plan could potentially include steps such as changing scope of practice laws or increasing payment rates to providers.
If CMS does not believe the issue is resolved within the twelve months of the remedy plan, CMS could require the state to continue the remedy plan for another 12 months or revise the plan.
A remedy plan will not become applicable until after the first rating period which does not begin until July 9, 2028. This provides States some time to identify existing access issues and remedy them before needing a CMS-required remedy plan.
This rulemaking reflects CMS’ attempt to bolster oversight of member access to covered services, which has been a consistent theme in this administration’s Medicaid policies. CMS has chosen here to focus on what we consider to be granular aspects of network adequacy standards like appointment wait times, secret shopper surveys, and demonstration of payment amounts for a select group of providers. For most requirements, CMS still authorizes states to grant exceptions, which some states use regularly.
For more information on the 2024 Medicaid managed care final rule’s provisions regarding network adequacy, please reach out to Kyle Brierly, Tahvia Jenkins or Kimber Robinson.
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