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CMS updates Medicaid managed care organization rules

First update since 2002 seeks better alignment with Medicare Advantage, CHIP, private insurance market

The Centers for Medicare & Medicaid Services (CMS) has released its long-awaited proposed rule that updates its Medicaid managed care organization (MCO) regulations.

"A lot has changed in terms of best practices and the delivery of important health services in the managed care field over the last decade,"  Andy Slavitt, acting administrator of CMS, said in a statement. "This proposal will better align regulations and best practices to other health insurance programs, including the private market and Medicare Advantage plans, to strengthen federal and state efforts at providing quality, coordinated care to millions of Americans with Medicaid or [Children's Health Insurance Program] insurance coverage."

CMS last updated the MCO rules in 2002. As such, the proposed rule covers a lot of ground.

Consultant John Gorman told Bloomberg that the rule is "literally the biggest healthcare regulation in a dozen years"--adding that, since it also touches Medicare, it's really an "omnibus rule" and not just a "Medicaid rule."

Out of 70 million Medicaid beneficiaries in the United States, about 46 million Medicaid receive coverage through MCOs, according to Avalere Health. That's a 48 percent increase in just the last four years.

The rule will likely add fuel to the debate about the efficacy of Medicaid managed care. Some suggest that MCOs achieves cost savings because they primarily cover women and children--a model that may not translate to older or sicker patients with multiple chronic conditions.

The proposed rule will be posted in the Federal Register on June 1. The deadline to submit comments is July 27.

For more:
here's the proposed rule (.pdf) and CMS statement
here's the Bloomberg article
read the Avalere Health analysis

Related Articles:
What to expect from the Medicaid managed care proposal
CMS to tighten Medicaid managed care organization regulations
Managed care continues to spark debate