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3 key reasons CMS overhauled MCO rule

Managed care market has seen drastic changes since last update to rules in 2002

Although insurers have already begun pushing back against proposed Medicaid managed care organization (MCO) regulations, the Centers for Medicare & Medicaid Services (CMS) released the rule so that it could catch existing regulation up with reality, reported Kaiser Health News.

It's been more than 10 years since CMS updated the MCO rule, and the Medicaid market has drastically changed in that time. With the Affordable Care Act's Medicaid expansion, for example, states increasingly contract with private insurers to administer their Medicaid programs.

This dramatic shift in the Medicaid market, combined with the large boost in enrollment in Medicaid expansion states, means CMS needed to address several other issues in its MCO proposed rule, according to KHN. Here's a summary of three of those issues.

Provider networks. Medicaid plans' provider networks are often incomplete or inaccurate. In fact, the Office of Inspector General for the U.S. Department of Health and Human Services found that about 50 percent of all doctors listed in Medicaid plan networks weren't actually accepting new patients. That's why the proposed MCO rule would require states to certify that enough providers are available in private Medicaid plans' networks.

Member churn. Insurers capitalize on member churn between Medicaid plans and private coverage so they don't lose business when their Medicaid beneficiaries' incomes make them ineligible for the low-income program. They've been motivating those Medicaid members to simply sign up for a private plan sold through the health insurance exchanges. But the MCO rule would require insurers to better educate members and prohibit them from cold calling, spamming or knocking on members' doors.

Quality scores. Quality ratings may be the future of health insurance, especially since the Medicare Advantage five-star rating system has proven so successful. Although the MCO rule hasn't specifically clarified whether it will give Medicaid plans stars, it has said it will establish some sort of new "quality rating" system.

To learn more:
- here's the Kaiser Health News article

Related Articles:
Proposed MCO rule would subject Medicaid managed care plans to quality ratings
MCO rule under fire for introducing medical loss ratio
CMS updates Medicaid managed care organization rules
What to expect from the Medicaid managed care proposal
OIG: Insurers' Medicaid provider directories are inaccurate