Medicaid Program; Medicaid and Children's Health Insurance Program (CHIP) Managed Care Access, Finance, and Quality

Federal RegisterMay 3, 2023

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 430, 438, and 457

[CMS-2439-P]

RIN 0938-AU99

Medicaid Program; Medicaid and Children's Health Insurance Program (CHIP) Managed Care Access, Finance, and Quality

AGENCY:

Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS).

ACTION:

Proposed rule.

SUMMARY:

This proposed rule would advance CMS' efforts to improve access to care, quality and health outcomes, and better address health equity issues for Medicaid and Children's Health Insurance Program (CHIP) managed care enrollees. The proposed rule would specifically address standards for timely access to care and States' monitoring and enforcement efforts, reduce burden for some State directed payments and certain quality reporting requirements, add new standards that would apply when States use in lieu of services and settings (ILOSs) to promote effective utilization and specify the scope and nature of ILOS, specify medical loss ratio (MLR) requirements, and establish a quality rating system for Medicaid and CHIP managed care plans.

DATES:

To be assured consideration, comments must be received at one of the addresses provided below, by July 3, 2023.

ADDRESSES:

In commenting, please refer to file code CMS-2439-P.

Comments, including mass comment submissions, must be submitted in one of the following three ways (please choose only one of the ways listed):

Electronically.

You may submit electronic comments on this regulation to

http://www.regulations.gov.

Follow the “Submit a comment” instructions.

By regular mail.

You may mail written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-2439-P, P.O. Box 8016, Baltimore, MD 21244-8016.

Please allow sufficient time for mailed comments to be received before the close of the comment period.

By express or overnight mail.

You may send written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-2439-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.

For information on viewing public comments, see the beginning of the

SUPPLEMENTARY INFORMATION

section.

FOR FURTHER INFORMATION CONTACT:

John Giles, (410) 786-5545, Medicaid Managed Care.

Laura Snyder, (410) 786-3198, Medicaid Managed Care State Directed Payments.

Tara Caulder, (410) 786-8252, Medicaid Managed Care State Directed Payments Value-Based Initiatives and Evaluation.

Alex Loizias, (410) 786-2435, Medicaid Managed Care State Directed Payments Contract Requirements.

Andrew Wilson, (410) 786-8515, Medicaid Managed Care State Directed Payments Medicare Fee Schedules and Appeals Process.

Carlye Burd, (720) 853-2780, Medicaid Managed Care Quality.

Amanda Paige Burns, (410) 786-8030, Medicaid Quality Rating System.

Joshua Bougie, (410) 786-8117, CHIP.

SUPPLEMENTARY INFORMATION:

Inspection of Public Comments:

All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following website as soon as possible after they have been received:

http://www.regulations.gov.

Follow the search instructions on that website to view public comments. CMS will not post on

Regulations.gov

public comments that make threats to individuals or institutions or suggest that the individual will take actions to harm the individual. CMS continues to encourage individuals not to submit duplicative comments. We will post acceptable comments from multiple unique commenters even if the content is identical or nearly identical to other comments.

Table of Contents

I. Medicaid and CHIP Managed Care

A. Background

B. Provisions of the Proposed Regulations

1. Access

2. State Directed Payments

3. Medical Loss Ratio (MLR) Standards

4. In Lieu of Services and Settings (ILOS)

5. Quality Assessment and Performance Improvement Program, State Quality Strategies and External Quality Review

6. Quality Improvement—Quality Rating System

II. Collection of Information Requirements

III. Regulatory Impact Analysis

IV. Response to Comments

V. Regulation Text

Applicability and Complicace Timeframes

CMS proposes that the proposed new requirements would be applicable, and therefore, States required to comply by the effective date of the final rule or as otherwise specified in regulatory text.

I. Medicaid and CHIP Managed Care

A. Background

As of September 2022, the Medicaid program provided essential health care coverage to more than 83 million

individuals, and, in 2020, had annual outlays of more than $671 billion. In 2021, the Medicaid program accounted for 17 percent of national health expenditures.

The program covers a broad array of health benefits and services critical to underserved populations, including low-income adults, children, parents, pregnant individuals, the elderly, and people with disabilities. For example, Medicaid pays for approximately 42 percent of all births in the U.S.

and is the largest payer of long-term services and supports (LTSS),

services to treat substance use disorder, and services to prevent and treat the Human Immunodeficiency Virus.

September 2022 Medicaid and CHIP Enrollment Snapshot. Accessed at

https://www.medicaid.gov/medicaid/national-medicaid-chip-program-information/downloads/september-2022-medicaid-chip-enrollment-trend-snapshot.pdf.

CMS National Health Expenditure Accounts. National Health Expenditures 2021 Highlights. Accessed at

https://www.cms.gov/files/document/highlights.pdf.

National Center for Health Statistics. Key Birth Statistics (2020 Data. Final 2022 Data forthcoming). Accessed at

https://www.cdc.gov/nchs/nvss/births.htm.

Colello, Kirsten J.

Who Pays for Long-Term Services and Supports?

Congressional Research Service. Updated June 15, 2022. Accessed at

https://crsreports.congress.gov/product/pdf/IF/IF10343.

Dawson, L. and Kates, J. Insurance Coverage and Viral Suppression Among People with HIV, 2018. September 2020. Kaiser Family Foundation. Accessed at

https://www.kff.org/hivaids/issue-brief/insurance-coverage-and-viral-suppression-among-people-with-hiv-2018/.

Ensuring beneficiaries can access covered services is a crucial element of the Medicaid program. Depending on the State and its Medicaid program structure, beneficiaries access their health care services using a variety of care delivery systems; for example, fee-for-service (FFS) and managed care, including through demonstrations and waiver programs. In 2020, 72

percent

of Medicaid beneficiaries were enrolled in comprehensive managed care plans; the remaining individuals received all of their care or some services that have been carved out of managed care through FFS.

MACPAC 2022 Analysis of T-MSIS data February 2022. Exhibit 30. Percentage of Medicaid Enrollees in Managed Care by State and Eligibility

Group

https://www.macpac.gov/wp-content/uploads/2022/12/EXHIBIT-30.-Percentage-of-Medicaid-Enrollees-in-Managed-Care-by-State-and-Eligibility-Group-FY-2020.pdf.

With a program as large and complex as Medicaid, to promote consistent access to health care for all beneficiaries across all types of care delivery systems in accordance with statutory requirements, access regulations need to be multi-factorial. Strategies to enhance access to health care services should reflect how people move through and interact with the health care system. We view the continuum of health care access across three dimensions of a person-centered framework: (1) enrollment in coverage; (2) maintenance of coverage; and (3) access to services and supports. Within each of these dimensions, accompanying regulatory, monitoring, and/or compliance actions may be needed to ensure access to health care is achieved and maintained.

In early 2022, we released a request for information (RFI)

to collect feedback on a broad range of questions that examined topics such as: challenges with eligibility and enrollment; ways we can use data available to measure, monitor, and support improvement efforts related to access to services; strategies we can implement to support equitable and timely access to providers and services; and opportunities to use existing and new access standards to help ensure that Medicaid and Children's Health Insurance Program (CHIP) payments are sufficient to enlist enough providers. Some of the most common feedback we received through the RFI related to promoting cultural competency in access to and the quality of services for beneficiaries across all dimensions of health care and using payment rates as a driver to increase provider participation in Medicaid and CHIP programs. Commenters were also interested in opportunities to align approaches for payment regulation and compliance across Medicaid and CHIP delivery systems and services.

CMS Request for Information: Access to Coverage and Care in Medicaid & CHIP. February 2022. For a full list of question from the RFI, see

https://www.medicaid.gov/medicaid/access-care/downloads/access-rfi-2022-questions.pdf.

As noted above, the first dimension of access focuses on ensuring that eligible people are able to enroll in the Medicaid program. Access to Medicaid enrollment requires that a potential beneficiary know if they are or may be eligible for Medicaid, be aware of Medicaid coverage options, and be able to easily apply for and enroll in coverage. The second dimension of access in this continuum relates to maintaining coverage once the beneficiary is enrolled in the Medicaid program initially. Maintaining coverage requires that eligible beneficiaries are able to stay enrolled in the program without interruption, or that they know how to and can smoothly transition to other health coverage, such as CHIP, Exchange coverage, or Medicare, when they are no longer eligible for Medicaid coverage. In September 2022, we published a proposed rule,

Streamlining the Medicaid, Children's Health Insurance Program, and Basic Health Program Application, Eligibility, Determination,

Enrollment,

and Renewal Processes

(87 FR 54760; hereinafter the “Streamlining Eligibility & Enrollment proposed rule”) to simplify the processes for eligible individuals to enroll and retain eligibility in Medicaid, CHIP, and the Basic Health Program (BHP).

The third dimension, which is the focus of this proposed rule, is access to services and supports. This rule is focused on addressing additional critical elements of access: (1) potential access (for example, provider availability and network adequacy); (2) beneficiary utilization (the use of health care and health services); and (3) beneficiaries' perceptions and experiences with the care they did or did not receive. These terms and definitions build upon our previous efforts to examine how best to monitor access.

Kenney, Genevieve M., Kathy Gifford, Jane Wishner, Vanessa Forsberg, Amanda I. Napoles, and Danielle Pavliv. “Proposed Medicaid Access Measurement and Monitoring Plan.” Washington, DC: The Urban Institute. August 2016. Accessed at

https://www.medicaid.gov/sites/default/files/2019-12/monitoring-plan.pdf.

In addition to the three proposed rules (the Streamlining Eligibility & Enrollment proposed rule, this proposed rule on managed care, and Medicaid Program; Ensuring Access to Medicaid Services proposed rule), we are also engaged in non-regulatory activities (for example, best practices toolkits and technical assistance to States) to improve access to health care services across Medicaid delivery systems. As noted earlier, the Streamlining Eligibility & Enrollment proposed rule addresses the first two dimensions of access to health care: (1) enrollment in coverage and (2) maintenance of coverage. Through that proposed rule, we sought to streamline Medicaid, CHIP and BHP eligibility and enrollment processes, reduce administrative burden on States and applicants toward a more seamless eligibility and enrollment process, and increase the enrollment and retention of eligible individuals. Through the Ensuring Access to Medicaid Services proposed rule, and this proposed rule involving managed care, we outline additional proposed steps to address the third dimension of the health care access continuum: access to services, while also in this rule addressing quality and financing of services in the managed care context. We seek to address a range of access-related challenges that impact how beneficiaries are served by Medicaid across all of its delivery systems.

The use of managed care in Medicaid has grown from 81 percent in 2016 to 84 percent in 2020,

with 72 percent of Medicaid beneficiaries enrolled in comprehensive managed care organizations in 2020. We note that States may implement a Medicaid managed care delivery system using four Federal authorities—sections 1915(a), 1915(b), 1932(a), and 1115(a) of the Social Security Act (the Act); each is described briefly below.

https://www.medicaid.gov/medicaid/managed-care/enrollment-report/index.html.

Under section 1915(a) of the Act, States can implement a voluntary managed care program by executing a contract with organizations that the State has procured using a competitive procurement process. To require beneficiaries to enroll in a managed care program to receive services, a State must obtain approval from CMS under two primary authorities:

• Through a State plan amendment (SPA) that meets standards set forth in section 1932(a) of the Act, States can implement a mandatory managed care delivery system. This authority does not allow States to require beneficiaries who are dually eligible for Medicare and Medicaid (dually eligible beneficiaries), American Indians/Alaska Natives (except as permitted in section 1932(a)(2)(C) of the Act), or children with special health care needs to enroll in a managed care program. State plans, once approved, remain in effect until modified by the State.

• We may grant a waiver under section 1915(b) of the Act, permitting a State to require all Medicaid beneficiaries to enroll in a managed care delivery system, including dually eligible beneficiaries, American Indians/Alaska Natives, or children with special health care needs. After approval, a State may operate a section 1915(b) waiver for a 2-year period (certain waivers can be operated for up to 5

years if they include dually eligible beneficiaries) before requesting a renewal for an additional 2- (or 5-) year period.

We may also authorize managed care programs as part of demonstration projects under section 1115(a) of the Act that include waivers permitting a State to require all Medicaid beneficiaries to enroll in a managed care delivery system, including dually eligible beneficiaries, American Indians/Alaska Natives, and children with special health care needs. Under this authority, States may seek additional flexibility to demonstrate and evaluate innovative policy approaches for delivering Medicaid benefits, as well as the option to provide services not typically covered by Medicaid. Such demonstrations are approvable only if it is determined that the demonstration would promote the objectives of the Medicaid statute and the demonstration is subject to evaluation.

The above authorities all permit States to operate their Medicaid managed care programs without complying with the following standards of Medicaid law outlined in section of 1902 of the Act:

•

Statewideness

(section 1902(a)(1) of the Act): States may implement a managed care delivery system in specific areas of the State (generally counties/parishes) rather than the whole State;

•

Comparability of Services

(section 1902(a)(10)(B) of the Act): States may provide different benefits to people enrolled in a managed care delivery system; and

•

Freedom of Choice

(section 1902(a)(23)(A) of the Act): States may generally require people to receive their Medicaid services only from a managed care plan's network of providers or primary care provider.

States that elect to operate a separate CHIP within a managed care delivery system do not need specific statutory authority to offer benefits through a managed care program. However, sections 2103(f)(3) and 2107(e)(1)(N) and (R) of the Act apply certain provisions of sections 1903 and 1932 of the Act related to Medicaid managed care to separate CHIPs. States that elect a Medicaid expansion CHIPs that operate within a managed care delivery system are subject to all requirements under section 1932 of the Act.

In the May 6, 2016

Federal Register

(81 FR 27498), we published the “Medicaid and Children's Health Insurance Program (CHIP) Programs; Medicaid Managed Care, CHIP Delivered in Managed Care, and Revisions Related to Third Party Liability” final rule (hereinafter referred to as “the 2016 final rule”) that modernized the Medicaid and CHIP managed care regulations to reflect changes in the use of managed care delivery systems. The 2016 final rule aligned many of the rules governing Medicaid and CHIP managed care with those of other major sources of coverage; implemented applicable statutory provisions; strengthened actuarial soundness payment provisions to promote the accountability of managed care program rates; strengthened efforts to reform delivery systems that serve Medicaid and CHIP beneficiaries; and enhanced policies related to program integrity. The 2016 final rule applied many of the Medicaid managed care rules to separate CHIP, particularly in the areas of access, finance, and quality through cross-references to 42 CFR part 438.

In the January 18, 2017

Federal Register

(82 FR 5415), we published the “Medicaid Program; The Use of New or Increased Pass-Through Payments in Medicaid Managed Care Delivery Systems” final rule (hereinafter referred to as “the 2017 final rule”). In the 2016 final rule, we defined pass-through payments at § 438.6(a) as any amount required by the State (and considered in calculating the actuarially sound capitation rate) to be added to the contracted payment rates paid by the MCO, PIHP, or PAHP to hospitals, physicians, or nursing facilities that is not for the following purposes: a specific service or benefit provided to a specific enrollee covered under the contract; a provider payment methodology permitted under § 438.6(c)(1)(i) through (iii) for services and enrollees covered under the contract; a subcapitated payment arrangement for a specific set of services and enrollees covered under the contract; graduate medical education (GME) payments; or Federally-qualified health center (FQHC) or rural health clinic (RHC) wrap around payments. On June 29th, 2016, we also published the CMCS Informational Bulletin (CIB) concerning “The Use of New or Increased Pass-Through Payments in Medicaid Managed Care Delivery Systems.” The 2017 final rule codified the information in the CIB as well as gave States the option to eliminate physician and nursing facility payments immediately or phase down these payments over the 5-year transition period if they prefer and specified the maximum amount of pass-through payments permitted annually during the transition periods under Medicaid managed care contract(s) and rate certification(s). That final rule prevented increases in pass-through payments and the addition of new pass-through payments beyond those in place when the pass-through payment transition periods were established in the 2016 final rule.

In the November 13, 2020

Federal Register

(85 FR 72754), we published the “Medicaid Program; Medicaid and Children's Health Insurance Program (CHIP) Managed Care” final rule (hereinafter referred to as the “2020 final rule”) which streamlined the Medicaid and CHIP managed care regulatory framework to relieve regulatory burdens; support State flexibility and local leadership; and promote transparency, flexibility, and innovation in the delivery of care. The rule was intended to ensure that the regulatory framework was efficient and feasible for States to implement in a cost-effective manner and ensure that States can implement and operate Medicaid and CHIP managed care programs without undue administrative burdens.

Since publication of the 2020 final rule, the COVID-19 public health emergency (PHE) challenged States' ability to ensure beneficiaries' access to high-quality care, ensure adequate provider payment during extreme workforce challenges, and provide adequate program monitoring and oversight. On January 28, 2021, Executive Order (E.O.) 14009,

Strengthening Medicaid and the Affordable Care Act,

was signed and established the policy objective to protect and strengthen Medicaid and the Affordable Care Act (ACA) and to make high-quality health care accessible and affordable for every American, and directed executive departments and agencies to review existing regulations, orders, guidance documents, and policies to determine whether such agency actions are inconsistent with this policy. On April 25, 2022, Executive Order 14070 directed agencies with responsibilities related to Americans' access to health coverage to review agency actions to identify ways to continue to expand the availability of affordable health coverage, to improve the quality of coverage, to strengthen benefits, and to help more Americans enroll in quality health coverage. This proposed rule aims to fulfill Executive Orders 14009 and 14070 by helping States to use lessons learned from the PHE and build stronger managed care programs to better meet the needs of the Medicaid and CHIP populations by improving access to and quality of care provided.

In addition, this rule proposes new standards to help States improve their monitoring of access to care by requiring establishment of new standards for appointment wait times, use of secret shopper surveys, use of enrollee experience surveys, and requiring States to submit a managed care plan analysis of payments made by plans to providers, for specific services, to more closely monitor plans' network adequacy. It also proposes provisions that would reduce burden for States that choose to direct MCOs, PIHPs, or PAHPs in certain ways to use their capitation payments to pay specified providers specified amounts, address impermissible redistribution arrangements related to State directed payments, and add clarity to the requirements related to medical loss ratio calculations. To improve transparency and provide valuable information to enrollees, providers, and CMS, this rule proposes to enhance existing State website requirements for content and ease of use. Lastly, this proposed rule would make quality reporting more transparent and meaningful for driving quality improvement, reduce burden on certain quality reporting requirements, and establish State requirements for implementing a Medicaid and CHIP quality rating system aimed at ensuring monitoring of performance by Medicaid and CHIP managed care plans and empowering beneficiary choice in managed care.

Finally, we believe it is important to acknowledge the role of health equity within this proposed rule. Medicaid and CHIP are the primary source of health care coverage for over one in three people of color in this country. Consistent with Executive Order 13985

which calls for advancing equity for underserved populations, we are working to advance health equity across CMS programs consistent with the goals and objectives we have outlined in the CMS Framework for Health Equity 2022-2032

and the HHS Equity Action Plan.

That effort includes increasing our understanding of the needs of those we serve to ensure that all individuals have access to equitable care and coverage.

Executive Order 13985,

https://www.whitehouse.gov/briefing-room/presidentialactions/2021/01/20/executive-order-advancingracial-equity-and-support-or-underservedcommunities-through-the-federal-government/.

CMS Framework for Health Equity 2022-2032:

https://www.cms.gov/files/document/cmsframework-health-equity.pdf.

HHS Equity Action Plan,

https://www.hhs.gov/sites/default/files/hhs-equity-action-plan.pdf.

A key part of our approach will be to work with States to improve measurement of health disparities through the stratification of State reporting on certain measures to identify potential differences in access, quality, and outcomes based on demographic factors like race, ethnicity, age, rural/urban status, disability, language, sex, sexual orientation, and gender identity, as well as social determinants of health.

The “Medicaid Program and CHIP; Mandatory Medicaid and Children's Health Insurance Program (CHIP) Core Set Reporting” proposed rule appeared in the August 22, 2022

Federal Register

(87 FR 51303) (hereinafter referred to as the“Mandatory Medicaid and CHIP Core Set Reporting proposed rule”). In that proposed rule, we proposed that the Secretary would specify, through annual subregulatory guidance, which measures in the Medicaid and CHIP Child Core Set, the behavioral health measures of the Medicaid Adult Core Set, and the Health Home Core Sets, States would be required to stratify, and by which factors, such as race, ethnicity, sex, age, rural/urban status, disability, language or other factors specified by the Secretary. CMS also proposed a phased-in timeline for stratification of measures in these Core Sets. In the Medicaid Program; Ensuring Access to Medicaid Services proposed rule, published elsewhere in the

Federal Register

, we also proposed a similar phased-in timeline and process for mandatory reporting and stratification of the Home and Community-Based Services (HCBS) Quality Measure Set.

Measuring health disparities, reporting these results, and driving improvements in quality are cornerstones of the CMS approach to advancing health equity and also align with the CMS Strategic Priorities.

In this proposed rule, we establish our intent to align with the stratification factors required for Core Set measure reporting, which we believe would minimize State and health plan burden to report stratified measures. To further reduce burden on States, we would permit States to report, if finalized, the same measurement and stratification methodologies and classifications as those proposed in the Mandatory Medicaid and CHIP Core Set Reporting proposed rule and the Ensuring Access to Medicaid Services proposed rule. We believe these measures and methodologies would be appropriate to include in States' Managed Care Program Annual Report (MCPAR) because § 438.66(e)(2)(vii) requires information on and an assessment of the operation of each managed care program and an evaluation of managed care plan performance on quality measures. Reporting these measures in MCPAR would minimize State and provider burden while allowing more robust CMS monitoring and oversight of the quality of the health care provided at a managed care plan and program level. We would also anticipate publishing additional subregulatory guidance and adding specific fields in MCPAR that would accommodate this measure and data stratification reporting to simplify the process for States.

CMS Strategic Plan 2022,

https://www.cms.gov/cms-strategic-plan.

B. Provisions of the Proposed Regulations

Throughout this document, the term “PAHP” is used to mean a prepaid ambulatory health plan that does not exclusively provide non-emergency medical transportation services. Whenever this document is referencing a PAHP that exclusively provides non-emergency medical transportation services, it is specifically addressed as a “Non-Emergency Medical Transportation (NEMT) PAHP.” Throughout this document, the use of the term “managed care plan” includes managed care organizations (MCOs), prepaid inpatient health plans (PIHPs), and prepaid ambulatory health plans (PAHPs) and is used only when the provision under discussion applies to all three arrangements. An explicit reference is used in the preamble if the provision applies to primary care case management (PCCMs) or PCCM entities.

For CHIP, the preamble uses “CHIP” when referring collectively to separate child health programs and Medicaid expansion programs. We use “separate CHIP” specifically in reference to separate child health programs and also in reference to any proposed changes in subpart L of part 457, which are only applicable to separate child health programs operating in a managed care delivery system. Also note in this proposed rule, all proposed changes to Medicaid managed care regulations are equally applicable to Medicaid expansion managed care programs as described at § 457.1200(c).1. Access (42 CFR 438.2, 438.10, 438.66, 438.68, 438.206, 438.207, 438.214, 438.602, 457.1207, 457.1218, 457.1230, 457.1250, 457.1285)

a. Enrollee Experience Surveys (§§ 438.66(b) and (c), 457.1230(b))

In the 2016 final rule, we renamed and expanded § 438.66

State Monitoring Requirements

to ensure that States had robust systems to monitor their

managed care programs, utilize the monitoring results to make program improvements, and report to CMS annually the results of their monitoring activities. Existing regulations at § 438.66(c)(5) require States to use the data collected from their monitoring activities to improve the performance of their managed care programs, including results from any enrollee or provider satisfaction surveys conducted by the State or managed care plan. Some States currently use surveys to gather direct input from their managed care enrollees, which we believe is a valuable source of information on enrollees' actual and perceived access to services. As a general matter, disparities in access to care related to demographic factors such as race, ethnicity, language, or disability status are, in part, a function of the availability of the accessible providers who are willing to provide care and are competent in meeting the needs of populations in medically underserved communities. Surveys can focus on matters that are important to enrollees and for which they are the best and, sometimes, only source of information. Patient experience surveys can also focus on how patients experienced or perceived key aspects of their care, not just on how satisfied they were with their care. For example, experience surveys can focus on asking patients whether or how often they accessed health care, barriers they encountered in accessing health care, and their experience including communication with their doctors, understanding their medication instructions, and the coordination of their health care needs. Some States already use enrollee experience surveys and report that the data is an asset in their efforts to assess whether the managed care program is meeting its enrollees' needs.

One of the most commonly used enrollee experience survey in the health care industry, including for Medicare Advantage organizations, is the Consumer Assessment of Healthcare Providers and Systems (CAHPS®).

CAHPS experience surveys are available for health plans, dental plans, and home and community-based services (HCBS) programs, as well as for patient experience with providers such as home health, condition specific care such as behavioral health, or facility-based care such as in a nursing home. A survey specially designed to measure the impact of long-term services and supports (LTSS) on the quality of life and outcomes of enrollees is the National Core Indicators-Aging and Disabilities (NCI-AD®) Adult Consumer Survey

Whichever survey is chosen by a State, it should complement data gathered from other network adequacy and access monitoring activities to provide the State with a more complete assessment of their managed care programs' success at meeting their enrollees' needs. To ensure that States' managed care program monitoring systems, required at § 438.66(a), appropriately capture the enrollee experience, we propose to revise § 438.66(b)(4) to explicitly include “enrollee experience.” Section 438.66(c)(5) currently requires States to use the results from any enrollee or provider satisfaction surveys they choose to conduct to improve the performance of its managed care program. To ensure that States have the data from an enrollee experience survey to include in their monitoring activities and improve the performance of their managed care programs, we propose to revise § 438.66(c)(5) to require that States conduct an annual enrollee experience survey. To reflect this, we propose to revise § 438.66(c)(5) to add “an annual” before “enrollee” and add “experience survey conducted by the State” after “enrollee.” We also propose to replace “or” with “and” to be explicit that use of provider survey results alone would not be sufficient to comply with § 438.66(c)(5). While we encourage States and managed care plans to utilize provider surveys, we are not proposing to mandate them at this time. We believe other proposals in this rule, such as enrollee surveys and secret shopper surveys, may yield information that would inform our decision on the use of provider surveys in the future. We invite comment on whether we should mandate the use of a specific enrollee experience survey, define characteristics of acceptable survey instruments, and the operational considerations of enrollee experience surveys States use currently.

The acronym “CAHPS” is a registered trademark of the Agency for Healthcare Research and Quality.

NCI-AD Adult Consumer Survey

is a copyrighted tool.

To reflect these proposals in the annual assessment of the operation of the managed care program report called the Managed Care Program Annual Report (MCPAR) required at § 438.66(e), we propose conforming edits in § 438.66(e)(2)(vii). We propose to include the results of an enrollee experience survey to the list of items that States must evaluate in their report and add “provider” before “surveys” to distinguish them from enrollee experience surveys. Additionally, consistent with the transparency proposals described in section I.B.1.f. of this section, we propose to revise § 438.66(e)(3)(i) to require that States post the report required in § 438.66(e)(1) on their website within 30 calendar days of submitting it to CMS. Currently § 438.66(e)(3)(i) only requires that the report be posted on the State's website but does not specify a timeframe; we believe that adding further specificity about the timing of when the report should be posted would be helpful to interested parties and bring consistency to this existing requirement. This proposal is authorized by section 1902(a)(6) of the Act which requires that States provide reports, in such form and containing such information, as the Secretary may from time to time require.

For an enrollee experience survey to yield robust, usable results, it should be easy to understand, simple to complete, and readily accessible for all enrollees that receive it; therefore, we believe they should meet the interpretation, translation, and tagline criteria in § 438.10(d)(2). Therefore, we propose to add enrollee experience surveys as a document subject to the requirements in § 438.10(d)(2). This would ensure that enrollees that receive a State's enrollee experience survey would be fully notified that oral interpretation in any language and written translation in the State's prevalent languages would be readily available, and how to request auxiliary aids and services, if needed.

These proposals are authorized by section 1932(b)(5) of the Act which requires managed care organizations to demonstrate adequate capacity and services by providing assurances to the State and CMS that it has the capacity to serve the expected enrollment in its service area, including assurances that it offers an appropriate range of services and access to preventive and primary care services for the population expected to be enrolled in such service area, and maintains a sufficient number, mix, and geographic distribution of providers of services. The authority for our proposals is extended to prepaid inpatient health plans (PIHPs) and prepaid ambulatory health plans (PAHPs) through regulations based on our authority under section 1902(a)(4) of the Act. Because enrollee experience survey results would provide direct and candid input from enrollees, States and managed care plans could use the results to determine if their networks offer an appropriate range of services and access as well as if it provides a sufficient number, mix, and geographic distribution of providers to meet their enrollees' needs. Enrollee experience survey data would enable managed care plans to assess whether their networks

are providing sufficient capacity as experienced by their enrollees and that assessment would inform the assurances that the plan is required to provide to the State and CMS. These proposals are also authorized by section 1932(c)(1)(A)(i) and (iii) of the Act which require States that contract with MCOs to develop and implement a quality assessment and improvement strategy that includes: standards for access to care so that covered services are available within reasonable timeframes and in a manner that ensures continuity of care and adequate primary care and specialized services capacity and procedures for monitoring and evaluating the quality and appropriateness of care and services to enrollees and requirements for provision of quality assurance data to the State. Data from enrollee experience surveys would enable States to use the results to evaluate whether their plans' networks are providing access to covered services within reasonable timeframes and in a manner that ensures continuity of care. These data would also inform the development and maintenance of States' quality assessment and improvement strategies and would be critical to States' monitoring and evaluation of the quality and appropriateness of care and services provided to enrollees.

We remind States that in addition to the mandatory external quality review (EQR) activities under § 438.358(b), there is an existing optional EQR activity under § 438.358(c)(2) for the administration or validation of consumer or provider surveys of quality of care. States that contract with MCOs and use external quality review organizations (EQROs) to administer or validate the proposed enrollee experience surveys may be eligible to receive up to a 75 percent enhanced Federal match, pursuant to § 438.370, to reduce the financial burden of conducting or validating the proposed enrollee survey(s).

We request comment on the cost and feasibility of implementing enrollee experience surveys for each managed care program as well as the extent to which States already use enrollee experience surveys for their managed care programs.

We propose that States would have to comply with § 438.66(b) and (c) no later than the first managed care plan rating period that begins on or after 3 years after the effective date of the final rule as we believe this is a reasonable timeframe for compliance. We have proposed this applicability date in § 438.66(f).

We did not adopt the managed care State monitoring requirements described at § 438.66 in the 2016 final rule for separate CHIPs because we wished to limit administrative burden on separate CHIP managed care plans, which typically serve smaller populations. Since we did not adopt MCPAR, we do not plan to adopt the new Medicaid enrollee experience survey requirements proposed at § 438.66(b) and (c) for separate CHIPs. However, States currently collect enrollee experience data for CHIP through annual CAHPS surveys as required at section 2108(e)(4) of the Act. Currently, there are no requirements for States to use these data to evaluate their separate CHIP managed care plans network adequacy or to make these survey results available to beneficiaries to assist in selecting a managed care plan. We believe that enrollee experience data can provide an invaluable window into the performance of managed care plans and assist States in their annual review and certification of network adequacy for separate CHIP MCOs, PIHPs, and PAHPs. For this reason, we propose to amend § 457.1230(b) to require States to evaluate annual CAHPS survey results as part of the State's annual analysis of network adequacy as described in § 438.207(d). Since States already collect CAHPS survey data for CHIP and would likely not need the same timeframe to implement as needed for implementing the proposed Medicaid enrollee experience surveys requirement, we propose for the provision at § 457.1230(b) to be applicable 60 days after the effective date of the final rule. However, we are open to a later applicability date such as 1, 2, or 3 years after the effective date of the final rule. We invite comment on the appropriate applicability date for this provision.

We also believe that access to enrollee experience data is critical in affording separate CHIP beneficiaries the opportunity to make informed decisions when selecting their managed care plan(s). To this end, we propose at § 457.1207 to require States to post comparative summary results of CAHPS surveys by managed care plan annually on State websites as described at § 438.10(c)(3). The posted summary results must be updated annually and allow for easy comparison between the managed care plans available to separate CHIP beneficiaries. We seek public comment on other approaches to including CHIP CAHPS survey data for the dual purposes of improving access to managed care services and enabling beneficiaries to have useful information when selecting a managed care plan.

b. Appointment Wait Time Standards (§§ 438.68(e), 457.1218)

In the 2020 final rule, we revised § 438.68(b)(1) and (2) by replacing the requirement for States to set time and distance standards with a more flexible requirement that States set a quantitative network adequacy standard for specified provider types. We explained that quantitative network adequacy standards that States may elect to use included minimum provider-to-enrollee ratios; maximum travel time or distance to providers; a minimum percentage of contracted providers that are accepting new patients; maximum wait times for an appointment; hours of operation requirements (for example, extended evening or weekend hours); and combinations of these quantitative measures. We encouraged States to use the quantitative standards in combination- not separately- to ensure that there are not gaps in access to, and availability of, services for enrollees. (85 FR 72802)

Key to the effectiveness of the Medicaid and CHIP program is ensuring that it provides timely access to high-quality services in a manner that is equitable and consistent. During the COVID-19 public health emergency (PHE), managed care plans have faced many challenges ensuring access to covered services and those challenges shed light on opportunities for improvement in monitoring timely access. These challenges include workforce shortages, changes in providers' workflows and operating practices, providers relocating leaving shortages in certain areas, and shifts in enrollee utilization such as delaying or forgoing preventive care. Some of these challenges may become permanent and thus, States and managed care plans need to adjust their monitoring, evaluation, and planning strategies to ensure equitable access to all covered services.

On February 17, 2022, we issued a request for information

(RFI) soliciting public input on improving access in Medicaid and CHIP, including ways to promote equitable and timely access to providers and services. Barriers to accessing care represented a significant portion of comments received, with common themes related to providers not accepting Medicaid and

recommendations calling for us to set specific quantitative access standards. Many commenters urged us to consider developing a Federal standard for timely access to providers and services, but giving State Medicaid and CHIP agencies the flexibility to impose more stringent requirements. A recently published study

examined the extent to which Medicaid managed care plan networks may overstate the availability of physicians in Medicaid, and evaluated the implications of discrepancies in the “listed” and “true” networks for beneficiary access. The authors concluded that findings suggest that current network adequacy standards might not reflect actual access and that new methods are needed that account for physicians' willingness to serve Medicaid patients. Another review of 34 audit studies demonstrated that Medicaid is associated with a 1.6-fold lower likelihood in successfully scheduling a primary care appointment and a 3.3-fold lower likelihood in successfully scheduling a specialty appointment when compared with private insurance.

CMS Request for Information: Access to Coverage and Care in Medicaid & CHIP. February 2022. For a full list of question from the RFI, see

https://www.medicaid.gov/medicaid/access-care/downloads/access-rfi-2022-questions.pdf.

https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2021.01747.

W. Hsiang, A. Lukasiewicz, and M. Gentry, “Medicaid Patients Have Greater Difficulty Scheduling Health Care Appointments Compared With Private Insurance Patients: A Meta-Analysis,” SAGE Journals, April 5, 2019, available at

https://journals.sagepub.com/doi/full/10.1177/0046958019838118.

Based on the RFI comments received, research, engagement with interested parties, and our experience in monitoring State managed care programs, we are persuaded about the need for increased oversight of network adequacy and overall access to care, and propose a new quantitative network adequacy standard. Specifically, we propose to redesignate existing § 438.68(e) regarding publication of network adequacy standards to § 438.68(g) and create a new § 438.68(e) titled “Appointment wait time standards.”

In § 438.68(e)(1)(i) through (iv), we propose that States develop and enforce wait time standards for routine appointments for four types of services: outpatient mental health and substance use disorder (SUD)-adult and pediatric, primary care- adult and pediatric, obstetrics and gynecology (OB/GYN), and an additional type of service determined by the State (in addition to the three listed) in an evidence-based manner for Medicaid. We include “If covered in the MCO's, PIHP's, or PAHP's contract” before the first three service types (paragraphs (e)(1)(i) through (iii)) to be clear that standards only need to be developed and enforced if the service is covered by the managed care plan's contract, but the forth service (paragraph (e)(1)(iv)) must be one that is covered by the plan's contract. For example, we understand that primary care and OB/GYN is likely not covered by a behavioral health PIHP; therefore, a State would not be required to set appointment wait time standards for primary care and OB/GYN for the behavioral health PIHP and would only have to set appointment wait time standards for mental health and SUD as well as one State-selected provider type. To ensure that our proposal to have States set appointment wait time standards for mental health and SUD as well as one State-selected provider type for behavioral PIHPs and PAHPs is feasible, we request comment on whether behavioral health PIHPs and PAHPs include provider types other than mental health and SUD in their networks. Although we believe behavioral health PIHPs and PAHPs may include other provider types, we want to validate our understanding. We propose to adopt the proposed wait time standards for separate CHIP through an existing cross-reference at § 457.1218. We are proposing primary care, OB/GYN, and mental health and SUD because they are indicators of core population health; therefore, we believe proposing to require States to set appointment wait time standards for them would have the most impact on access to care for Medicaid and CHIP managed care enrollees.

At § 438.68(e)(1)(iv), we propose that States select a provider type in an evidence-based manner to give States the opportunity to use an appointment wait time standard to address an access challenge in their local market. We are not proposing to specify the type of evidence to be used in this rule; rather, we defer to States to consider multiple sources, such as encounter data, appeals and grievances, and provider complaints, as well as to consult with their managed care plans to select a provider type. We believe proposing that States select one of the provider types subject to an appointment wait time standard would encourage States and managed care plans to analyze network gaps effectively and then innovate new ways to address the challenges that impede timely access. States would identify the provider type(s) they choose in existing reporting in MCPAR, per § 438.66(e), and the Network Adequacy and Access Assurances Report, per § 438.207(d).

To be clear that the appointment wait time standards proposed in § 438.68(e) cannot be the quantitative network adequacy standard required in § 438.68(b)(1), we propose to add “. . . , other than for appointment wait times . . .” in § 438.68(b)(1). We are not proposing to define routine appointments in this rule; rather, we defer to States to define it as they deem appropriate. We encourage States to work with their managed care plans and their network providers to develop a definition of “routine” that would reflect usual patterns of care and current clinical standards. We acknowledge that defining “urgent” and “emergent” for appointment wait time standards could be much more complex given the standards of practice by specialty and the patient-specific considerations necessary to determine those situations. We invite comments on defining these terms should we undertake additional rulemaking in the future. We clarify that setting appointment wait time standards for routine appointments as proposed at § 438.68(e)(1) would be a minimum; States are encouraged to set additional appointment wait time standards for other types of appointments. For example, States may consider setting appointment wait time standards for emergent or urgent appointments as well.

To provide States with flexibility to develop appointment wait time standards that reflect the needs of their Medicaid and CHIP managed care populations and local provider availability while still setting a level of consistency, we propose maximum appointment wait times at § 438.68(e)(1): State developed appointment wait times must be no longer than 10 business days for routine outpatient mental health and substance use disorder appointments in § 438.68(e)(1)(i) and no longer than 15 business days for routine primary care in § 438.68(e)(1)(ii) and OB/GYN appointments in § 438.68(e)(1)(iii). We are not proposing a maximum appointment wait time standard for the State-selected provider type. These proposed maximum timeframes were informed by standards for the individual insurance Marketplace established under the Affordable Care Act that will begin in 2024 of 10 business days for behavioral health and 15 business days for primary care services; we note that we elected not to adopt the Marketplace's appointment wait time standard of 30 business days for non-urgent specialist appointments as we believe focusing on primary care, OB/GYN, and mental health and SUD is the most appropriate starting place for Medicaid managed care standards. These proposed timeframes were also

informed by engagement with interested parties, including comments in response to the RFI. We are proposing to require appointment wait times for routine appointments only in this rule as we believe that providers utilize more complex condition and patient-specific protocols and clinical standards of care to determine scheduling for urgent and emergent care. We may address standards for other types of appointments in future rulemaking and hope that information from the use of appointment wait time standards for routine appointments may inform future proposals.

In developing this proposal, we considered appointment wait time standards between 30-calendar days and 45-calendar days. Some interested parties stated that these standards would be more appropriate for routine appointments and would more accurately reflect current appointment availability for most specialties. However, we believe 30-calendar days and 45-calendar days as the maximum wait time may be too long as a standard; we understand it may be a realistic timeframe currently for some specialist appointments but we were not convinced that they should be the standard for outpatient mental health and substance use disorder, primary care, and OB/GYN appointments. We invite comment on aligning with the Marketplace standards at 10- and 15-business days, or whether wait time standards should differ, and if so, what standards would be the most appropriate.

To make the appointment wait time standards as effective as possible, we defer to States on whether and how to vary appointment wait time standards for the same provider type; for example, by adult versus pediatric, telehealth versus in-person, geography, service type, or other ways. However, wait time standards must, at a minimum, reflect the timing proposed in § 438.68(e)(1). We encourage States to consider the unique access needs of certain enrollees when setting their appointment wait time standards to facilitate obtaining meaningful results when assessing managed care plan compliance with the standards.

As a general principle, we seek to align across Medicaid managed care, CHIP managed care, the Marketplace, and Medicare Advantage (MA) when reasonable to build consistency for individuals that may change coverage over time and to enable more effective and standardized comparison and monitoring across programs. Proposing 90 percent compliance with 10- and 15- business day maximum appointment wait time standards would be consistent with standards set for Marketplace plans for plan year 2024.

However, we note that for MA, CMS expects MA plans to set reasonable standards for primary care services for urgently needed services or emergencies immediately; services that are not emergency or urgently needed, but in need of medical attention within one week; and routine and preventive care within 30 days.

https://www.cms.gov/sites/default/files/2022-04/Final-2023-Letter-to-Issuers_0.pdf.

MCM Chapter 4 (

www.cms.gov

To ensure that managed care plans' contracts reflect their obligation to comply with the appointment wait time standards, we propose to revise § 438.206(c)(1)(i) to include appointment wait time standards as a required provision in MCO, PIHP, and PAHP contracts for Medicaid, which is included in separate CHIP regulations through an existing cross-reference at § 457.1230(a). We believe this is necessary since our proposal at § 438.68(e)(1) to develop and enforce appointment wait time standards is a State responsibility; proposing this revision to § 438.206(c)(1)(i) would specify the corresponding managed care plan responsibility.

We propose to revise the existing applicability date in § 438.206(d) for Medicaid, which is applicable for separate CHIPs through an existing cross-reference at § 457.1230(a) and a proposed cross-reference at § 457.1200(d), to reflect that States would have to comply with § 438.206(c)(1)(i) no later than the first managed care plan rating period that begins on or after 4 years after the effective date of the final rule. We believe this is a reasonable timeframe for compliance.

Current requirements at § 438.68(c)(1) and (2) for Medicaid, and through a cross-reference at § 457.1218 for separate CHIP, direct States to consider twelve elements when developing their network adequacy standards. We remind States that § 438.68(c)(1)(ix) includes the availability and use of telemedicine, e-visits, and/or other evolving and innovative technological solutions as an element that States must consider when developing their network adequacy standards. Services delivered via telehealth seek to improve a patient's health through two-way, real time interactive communication between the patient, and the provider. Services delivered in this manner can, for example, be used for assessment, diagnosis, intervention, consultation, and supervision across distances. Services can be delivered via telehealth across all populations served in Medicaid including, but not limited to children, individuals with disabilities, and older adults. States have broad flexibility to cover telehealth through Medicaid and CHIP, including the methods of communication (such as telephonic or video technology commonly available on smart phones and other devices) to use.

States need to balance the use of telehealth with the availability of providers that can provide in-person care and enrollees' preferences for receiving care to ensure that they establish network adequacy standards under § 438.68 that accurately reflect the practical use of both types of care in their State. Therefore, States should review encounter data to gauge telehealth use by enrollees over time and the availability of telehealth appointments by providers and account for that information when developing their appointment wait time standards. We also remind States that they have broad flexibility with respect to covering services provided via telehealth and may wish to include quantitative network adequacy standards or specific appointment wait time standards for telehealth

in addition

to in-person appointment standards, as appropriate based on current practices and the extent to which network providers offer telehealth services. Although States have broad flexibility in this area, we remind States of their responsibility under section 504 of the Rehabilitation Act and section 1557 of the Affordable Care Act to ensure effective communications for patients with disabilities for any telehealth services that are offered and to provide auxiliary aids and services at no cost to the individual to ensure that individuals with disabilities are able to access and utilize services provided via telehealth; we also remind States of their responsibilities under Title VI of the Civil Rights Act of 1964, including the obligation to take reasonable steps to ensure meaningful language access for persons with limited English proficiency when providing telehealth services.

https://www.medicaid.gov/medicaid/benefits/downloads/medicaid-chip-telehealth-toolkit.pdf.

US Department of Justice, Civil Rights Division and Department of Health and Human Services, Office for Civil Rights, “Guidance on Nondiscrimination in Telehealth: Federal Protections to Ensure Accessibility to People with Disabilities and Limited English Proficient Persons,” July 29, 2022, available online at

https://www.hhs.gov/civil-rights/for-individuals/disability/guidance-on-nondiscrimination-in-telehealth/index.html.

Current Medicaid regulations at § 438.68(e), and through a cross-reference at § 457.1218 for separate

CHIP, require States to publish the network adequacy standards required by § 438.68(b)(1) and (2) on their websites and to make the standards available upon request at no cost to enrollees with disabilities in alternate formats or through the provision of auxiliary aids and services. To ensure transparency and inclusion of the new proposed appointment wait time standards in this provision, we propose several revisions: to redesignate § 438.68(e) to § 438.68(g); to replace “and” with a comma after “(b)(1);” add “(b)” before “(2)” for clarity; and add a reference to (e) after “(b)(2).” We believe these changes make the sentence clearer and easier to read. Lastly, § 438.68(e) currently includes “. . . the website required by § 438.10.” For additional clarity in redesignated § 438.68(g), we propose to replace “438.10” with “§ 438.10(c)(3)” to help readers more easily locate the requirements for State websites. These proposed changes apply equally to separate CHIP managed care through existing cross-references at §§ 457.1218 and 457.1207.

At § 438.68(e)(2), which is included in separate CHIP regulations through an existing cross-reference at § 457.1218, we propose that managed care plans would be deemed compliant with the standards established in paragraph (e)(1) when secret shopper results, described in section I.B.1.c. of this rule, reflect a rate of appointment availability that meets State established standards at least 90 percent of the time. By proposing a minimum compliance rate for appointment wait time standards, we would provide States with leverage to hold their managed care plans accountable for ensuring that their network providers offer timely appointments. Further, ensuring timely appointment access 90 percent of the time would be an important step toward helping States ensure that the needs of their Medicaid and CHIP populations are being met timely. As with any provision of part 438 and subpart L of part 457, we may require States to take corrective action to address noncompliance.

To ensure that appointment wait time standards would be an effective measure of network adequacy, we believe we need some flexibility to add provider types to address new access or capacity issues at the national level. Therefore, at § 438.68(e)(3), which is included in separate CHIP regulations through an existing cross-reference at § 457.1218, we propose that CMS may select additional types of appointments to be added to § 438.68(e)(1) after consulting with States and other interested parties and providing public notice and opportunity to comment. From our experience with the COVID-19 PHE as well as multiple natural disasters in recent years, we believe it prudent to explicitly state that we may utilize this flexibility as we deem appropriate in the future.

We recognize that situations may arise when an MCO, PIHP, or PAHP may need an exception to the State established provider network standards, including appointment wait times. Section 438.68(d) currently provides that, to the extent a State permits an exception to any of the provider-specific network standards, the standard by which an exception would be evaluated and approved must be specified in the MCO, PIHP, or PAHP contract and must be based, at a minimum, on the number of providers in that specialty practicing in the MCO's, PIHP's, or PAHP's service area. We propose to make minor grammatical revisions to § 438.68(d)(1) by deleting “be” before the colon and inserting “be” as the first word of § 438.68(d)(1)(i) and (ii), which is included in separate CHIP regulations through an existing cross-reference at § 457.1218. We also propose to add a new standard at § 438.68(d)(1)(iii) for Medicaid, and through an existing cross-reference at § 457.1218 for separate CHIP, for reviews of exception requests, which would require States to consider the payment rates offered by the MCO, PIHP, or PAHP to providers included in the provider group subject to the exception. Managed care plans sometimes have difficulty building networks that meet network adequacy standards due to low payment rates. We believe that States should consider whether this component is a contributing factor to a plan's inability to meet the standards required by § 438.68(b)(1) and (2) and (e), when determining whether a managed care plan should be granted an exception. We remind States of their obligation at § 438.68(d)(2) to monitor enrollee access on an ongoing basis to the provider types in managed care networks that operate under an exception and report their findings as part of the annual Medicaid MCPAR required at § 438.66(e).

Our proposal for States to develop and enforce appointment wait time standards proposed at § 438.68(e) and the accompanying secret shopper surveys of plan's compliance with them (described in section I.B.1.c. of this proposed rule) proposed at § 438.68(f) are authorized by section 1932(b)(5) of the Act, and is extended to PIHPs and PAHPs through regulations based on our authority under section 1902(a)(4) of the Act, and authorized for CHIP through section 2103(f)(3) of the Act. We believe that secret shopper surveys could provide unbiased, credible, and representative data on how often network providers are offering routine appointments within the State's appointment wait time standards and these data would aid managed care plans as they assess their networks, pursuant to § 438.207(b), and provide an assurance to States that their networks have the capacity to serve the expected enrollment in their service area and that it offers appropriate access to preventive and primary care services for their enrollees. States should find the results of the secret shopper surveys a rich source of information to assess compliance with the components of their quality strategy that address access to care and determine whether covered services are available within reasonable timeframes, as required in section 1932(c)(1)(A)(i) of the Act and required for CHIP through section 2103(f)(3) of the Act.

Section 1932(d)(5) of the Act requires that, no later than July 1, 2018, contracts with MCOs and PCCMs, as applicable, must include a provision that providers of services or persons terminated (as described in section 1902(kk)(8) of the Act) from participation under this title, title XVIII, or title XXI must be terminated from participating as a provider in any network. Although States have had to comply with this provision for several years, we believe we should reference this important provision in 42 CFR part 438, as well as use our authority under section 1902(a)(4) of the Act to apply it to PIHPs and PAHPs. To do this, we propose a new § 438.214(d)(2) to reflect that States must ensure through their MCO, PIHP, and PAHP contracts that providers of services or persons terminated (as described in section 1902(kk)(8) of the Act) from participation under this title, title XVIII, or title XXI must be terminated from participating as a provider in any Medicaid managed care plan network.

We propose that States would have to comply with § 438.68(b)(1), (e), and (g) no later than the first MCO, PIHP, or PAHP rating period that begins on or after 3 years after the effective date of the final rule as we believe this is a reasonable timeframe for compliance. We propose that States would have to comply with § 438.68(f) no later than the first MCO, PIHP, or PAHP rating period that begins on or after 4 years after the effective date of the final rule. We propose that States would have to comply with § 438 (d)(1)(iii) no later than the first MCO, PIHP, or PAHP rating period that begins on or after 2

years after the effective date of the final rule. We have proposed these applicability dates in § 438.68(h) for Medicaid, and for separate CHIPs through an existing cross-reference at § 457.1218 and a proposed cross-reference at § 457.1200(d).

c. Secret Shopper Surveys (§§ 438.68(f), 457.1207, 457.1218)

We recognize that in some States and for some services, Medicaid beneficiaries face significant gaps in access to care. Evidence suggests that in some localities and for some services, it takes Medicaid beneficiaries longer to access medical appointments compared to individuals with other types of health coverage.

This may be exacerbated by difficulties in accessing accurate information about managed care plans' provider networks; although Medicaid and CHIP managed care plans are required to make regular updates to their online provider directories in accordance with §§ 438.10(h)(3) and 457.1207 respectively, analyses of these directories suggest that a significant share of provider listings include inaccurate information on, for example, how to contact the provider, the provider's network participation, and whether the provider is accepting new patients.

Relatedly, analyses have shown that the vast majority of services delivered to Medicaid beneficiaries are provided by a small subset of health providers listed in managed care plan provider directories, with a substantial share of listed providers delivering little or no care for Medicaid beneficiaries.

Some measures of network adequacy may not be as meaningful as intended if providers are “network providers” because they have a contract with a managed care plan, but in practice are not actually accepting new Medicaid enrollees or impose a cap on the number of Medicaid enrollees they will see.

https://journals.sagepub.com/doi/full/10.1177/0046958019838118.

A. Burman and S. Haeder, “Directory Accuracy and Timely Access in Maryland's Medicaid Managed Care Program,” Journal of Health Care for the Poor and Underserved, available at

https://pubmed.ncbi.nlm.nih.gov/35574863/;

A. Bauman and S. Haeder, “Potemkin Protections: Assessing Provider Directory Accuracy and Timely Access for Four Specialties in California,” Journal of Health Politics, Policy and Law, 2022, available at

https://pubmed.ncbi.nlm.nih.gov/34847230/.

A. Ludomirsky, et. al., “In Medicaid Managed Care Networks, Care is Highly Concentrated Among a Small Percentage of Physicians,” Health Affairs, May 2022, available at

https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2021.01747.

To add a greater level of validity and accuracy to States' efforts to measure network adequacy and access, we propose to require States to use secret shopper surveys as part of their monitoring activities. Secret shopper surveys are a form of research that can provide high-quality data and actionable feedback to States and managed care plans and can be performed either as “secret” meaning the caller does not identify who they are performing the survey for or “revealed” meaning the caller identifies the entity for which they are performing the survey. While both types of surveys can produce useful results, we believe the best results are obtained when the survey is done as a secret shopper and the caller pretends to be an enrollee (or their representative) trying to schedule an appointment. Results from these surveys should be unbiased, credible, and reflect what it is truly like to be an enrollee trying to schedule an appointment, which is a perspective not usually provided by, for example, time and distance measures or provider-to-enrollee ratios. Many States and managed care plans currently use some type of survey to monitor access; however, we believe there should be some consistency to their use for Medicaid managed care programs to enable comparability.

To ensure consistency, we propose a new § 438.68(f), and propose to require that States use independent entities to conduct annual secret shopper surveys of managed care plan compliance with appointment wait time standards proposed at § 438.68(e) and the accuracy of certain data in all managed care plans' electronic provider directories required at § 438.10(h)(1). These proposed changes apply equally to separate CHIPs through existing cross-references at §§ 457.1218 and 457.1207. We believe that the entity that conducts these surveys must be independent of the State Medicaid or CHIP agency and its managed care plans subject to the survey to ensure unbiased results. Therefore, at § 438.68(f)(3)(i), we propose to consider an entity to be independent of the State if it is not part of the State Medicaid agency and, at § 438.68(f)(3)(ii), to consider an entity independent of a managed care plan subject to a secret shopper survey if the entity is not an MCO, PIHP, or PAHP; is not owned or controlled by any of the MCOs, PIHPs, or PAHPs subject to the surveys; and does not own or control any of the MCOs, PIHPs, or PAHPs subject to the surveys. Given the valuable data the proposed secret shopper surveys could provide States, we believe requiring the use of an independent entity to conduct the surveys would be critical to ensure unbiased results.

We also propose to require States to use secret shopper surveys to determine the accuracy of certain provider directory information in MCOs', PIHPs', and PAHPs' most current electronic provider directories at § 438.68(f)(1)(i). Since we believe that paper directory usage is dwindling due to the ever-increasing use of electronic devices and because electronic directory files are usually used to produce paper directories, we are not requiring secret shopper validation of paper directories. Rather, we propose in § 438.68(f)(1)(i)(A) through (C) to require surveys of electronic provider directory data for primary care providers, OB/GYN providers, and outpatient mental health and substance use disorder providers, if they are included in the managed care plan's provider directories. We are proposing these provider types because they are the provider types with the highest utilization in many Medicaid managed care programs.

To ensure that a secret shopper survey can be used to validate directory data for every managed care plan, we propose in § 438.68(f)(1)(i)(D) to require secret shopper surveys for provider directory data for the provider type selected by the State for its appointment wait time standards in § 438.68(e)(1)(iv). We recognize that the State-chosen provider type may vary across managed care plan types and thus, States may have to select multiple provider types to accommodate all of their managed care programs. For example, a State may select a provider type from their MCOs' directories that is not a provider type included in their mental health PIHP's directories; just as the State may select a provider type from their behavioral health PIHPs' directories that is not a provider type included in their dental PAHPs' directories. We note that the State-chosen provider type cannot vary among plans of the same type within the same managed care program. Although this degree of variation between States would limit comparability, we believe that the value of validating provider directory data outweighs this limitation and that having results for provider types that would be important to State specific access issues would be a rich source of data for States to evaluate managed care plan performance and require the impacted plan to implement timely remediation, if needed.

At § 438.68(f)(1)(ii)(A) through (D), we propose to require that States use

independent entities to conduct annual secret shopper surveys to verify the accuracy of four pieces of data in each MCO, PIHP, or PAHP electronic provider directory required at § 438.10(h)(1): the active network status with the MCO, PIHP, or PAHP; the street address as required at § 438.10(h)(1)(ii); the telephone number as required at § 438.10(h)(1)(iii); and whether the provider is accepting new enrollees as required at § 438.10(h)(1)(vi). We believe these are the most critical pieces of information that enrollees rely on when seeking network provider information. Inaccuracies in this information can have a tremendously detrimental effect on enrollees' ability to access care since finding providers that are not in the managed care plan's network, have inaccurate addresses and phone numbers, or finding providers that are not accepting new patients listed in a plan's directory can delay their ability to contact a network provider and ultimately, receive care.

To maximize the value of using secret shopper surveys to validate provider directory data, identified errors must be corrected as quickly as possible. Therefore, at § 438.68(f)(1)(iii) and (iv) respectively, we propose that States must receive information on all provider directory data errors identified in secret shopper surveys no later than 3 business days from identification by the entity conducting the secret shopper survey and that States must then send that data to the applicable managed care plan within 3 business days of receipt. We also propose in § 438.68(f)(1)(iii) that the information sent to the State must be “sufficient to facilitate correction” to ensure that enough detail is provided to enable the managed care plans to quickly investigate the accuracy of the data and make necessary corrections. We note that States could delegate the function of forwarding the information to the managed care plans to the entity conducting the secret shopper surveys so that the State and managed care plans receive the information at the same time. This would hasten plans' receipt of the information as well as alleviate State burden. To ensure that managed care plans use the data to update their electronic directories, we propose at § 438.10(h)(3)(iii) to require MCOs, PIHPs, and PAHPs to use the information from secret shopper surveys required at § 438.68(f)(1) to obtain corrected information and update provider directories no later than the timeframes specified in § 438.10(h)(3)(i) and (ii), and included in separate CHIP regulations through an existing cross-reference at § 457.1207. While updating provider directory data after it has been counted as an error in secret shopper survey results would not change a managed care plan's compliance rate, it would improve provider directory accuracy more quickly and thus, improve access to care for enrollees.

To implement section 5123 of the Consolidated Appropriations Act of 2023,

we propose to revise § 438.10(h)(1) by adding “searchable” before “electronic form” to require that managed care plan electronic provider directories be searchable. We also propose to add paragraph (ix) to § 438.10(h)(1) to require that managed care plan provider directories include information on whether each provider offers covered services via telehealth. These proposals would align the text in § 438.10(h) with section 1932(a)(5) of the Act, as amended by section 5123 of the Consolidated Appropriations Act of 2023. Section 5123 of the Consolidated Appropriations Act of 2023 specifies that the amendments to section 1932(a)(5) of the Act will take effect on July 1, 2025; therefore, we propose that States would have to comply with the revisions to § 438.10(h)(1) and new (h)(1)(ix) by July 1, 2025.

BILLS-117hr2617enr.pdf

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congress.gov

Our proposals for a secret shopper survey of provider directory data proposed at § 438.68(f)(1) are authorized by section 1932(a)(5)(B)(i) of the Act for Medicaid and through section 2103(f)(3) of the Act for CHIP, which require each Medicaid MCO to make available the identity, locations, qualifications, and availability of health care providers that participate in their network. The authority for our proposals is extended to PIHPs and PAHPs through regulations based on our authority under section 1902(a)(4) of the Act. We propose that secret shopper surveys include verification of certain providers' active network status, street address, telephone number, and whether the provider is accepting new enrollees; these directory elements reflect the identity, location, and availability, as required for Medicaid in section 1932(a)(5)(B)(i) of the Act and required for CHIP through section 2103(f)(3) of the Act. Although the statute does not explicitly include “accurate” to describe “the identity, locations, qualifications, and availability of health care providers,” we believe it is the intent of the text and therefore, utilizing secret shopper surveys to identify errors in provider directories would help managed care plans ensure the accuracy of the information in their directories. Further, our proposal at § 438.10(h)(3)(iii) for managed care plans to use the data from secret shopper surveys to make timely corrections to their directories would also be consistent with statutory intent to reflect accurate identity, locations, qualifications, and availability information. Secret shopper survey results would provide vital information to help managed care plans fulfill their obligations to make the identity, locations, qualifications, and availability of health care providers that participate in the network available to enrollees and potential enrollees.

We believe using secret shopper surveys could also be a valuable tool to help States meet their enforcement obligations of appointment wait time standards, required in § 438.68(e). Secret shopper surveys are perhaps the most commonly used tool to assess health care appointment availability and can produce unbiased, actionable results. At § 438.68(f)(2), we propose to require States to determine each MCO's, PIHP's, and PAHP's rate of network compliance with the appointment wait time standards proposed in § 438.68(e)(1). We also propose in § 438.68(f)(2)(i) that, after consulting with States and other interested parties and providing public notice and opportunity to comment, we may select additional provider types to be added to secret shopper surveys of appointment wait time standards. We believe that after reviewing States' assurances of compliance and accompanying analyses of secret shopper survey results as proposed at § 438.207(d), and through an existing cross-reference at § 457.1230(b) for separate CHIP, we may propose additional provider types be subject to secret shopper surveys in future rulemaking.

In section I.B.1.b. of this proposed rule, we explained that States need to balance the use of telehealth with the availability of providers that can provide in-person care and enrollees' preferences for receiving care to ensure that they establish network adequacy standards under § 438.68(e) that accurately reflect the practical use of telehealth and in-person appointments in their State. To ensure that States reflect this, in § 438.68(f)(2)(ii), we propose that appointments offered via telehealth only be counted towards compliance with appointment wait time standards if the provider also offers in-person appointments and that telehealth visits offered during the secret shopper survey be separately identified in the survey results. We believe it would be appropriate to prohibit managed care plans from meeting appointment wait time standards with telehealth

appointments alone and by separately identifying telehealth visits in the results because this would help States determine if the type of appointments being offered by providers is consistent with expectations and enrollees' needs. We note that this proposal is consistent with the requirement for QHPs beginning in 2024.

Managed care encounter data in Transformed Medicaid Statistical Information system (T-MSIS) reflects that most care is still provided in-person and that use of telehealth has quickly returned to near pre-pandemic levels. We believe by explicitly proposing to limit the counting of telehealth visits to meet appointment wait time standards, as well as the segregation of telehealth and in-person appointment data, secret shopper survey results would produce a more accurate reflection of what enrollees actually experience when attempting to access care. We considered aligning appointment wait times and telehealth visits with the process used by MA for demonstrating overall network adequacy, which permits MA organizations to receive a 10-percentage point credit towards the percentage of beneficiaries residing within published time and distance standards for the applicable provider specialty type and county when the plan includes one or more telehealth providers that provide additional telehealth benefits. However, we believe our proposal would provide States and CMS with more definitive data to assess the use of telehealth and enrollee preferences and would be the more appropriate method to use at this time. We request comment on this proposal.

https://www.cms.gov/sites/default/files/2022-04/Final-2023-Letter-to-Issuers_0.pdf.

Our proposal for secret shopper surveys of plans' compliance with appointment wait time standards proposed at § 438.68(f)(2) is authorized by section 1932(b)(5) of the Act for Medicaid and through section 2103(f)(3) of the Act for CHIP, because secret shopper surveys could provide unbiased, credible, and representative data on how often network providers are offering routine appointments within the State's appointment wait time standards. This data should aid managed care plans as they assess their networks, pursuant to § 438.207(b), and provide an assurance to States that their networks have the capacity to serve the expected enrollment in their service area. States should find the results of the secret shopper surveys a rich source of information to assess compliance with the components of their quality strategy that address access to care and determine whether covered services are available within reasonable timeframes, as required in section 1932(c)(1)(A)(i) of the Act for Medicaid and section 2103(f)(3) of the Act for CHIP.

It is critical that secret shopper survey results be obtained in an unbiased manner using professional techniques that ensure objectivity. To reflect this, we propose at § 438.68(f)(3) that any entity that conducts secret shopper surveys must be independent of the State Medicaid agency and its managed care plans subject to a secret shopper survey. In § 438.68(f)(3)(i) and (ii), we propose the criteria for an entity to be considered independent: Section 438.68(f)(3)(i) proposes that an entity cannot be a part of any State governmental agency to be independent of a State Medicaid agency and § 438.68(f)(3)(ii) proposes that to be independent of the managed care plans subject to the survey, an entity would not be an MCO, PIHP, or PAHP, would not be owned or controlled by any of the MCOs, PIHPs, or PAHPs subject to the surveys, and would not own or control any of the MCOs, PIHPs, or PAHPs subject to the surveys. We propose to define “independent” by using criteria that is similar, but not as restrictive, as the criteria used for independence of enrollment brokers and specified at § 438.810(b)(1). We believe this consistency in criteria would make it easier for States to evaluate the suitability of potential survey entities. We remind States that the optional EQR activity at § 438.358(c)(5) could be used to conduct the secret shopper surveys proposed at § 438.68(f) and for secret shopper surveys conducted for MCOs, States may be able to receive enhanced Federal financial participation (FFP), pursuant to § 438.370.

Secret shopper surveys can be conducted in many ways, using varying levels of complexity and gathering a wide range of information. We want to give States flexibility to design their secret shopper surveys to produce results that not only validate managed care plans' compliance with provider directory data accuracy as proposed at § 438.68(f)(1) and appointment wait time standards at § 438.68(f)(2), but also provide States the opportunity to collect other information that would assist them in their program monitoring activities and help them achieve programmatic goals. To provide this flexibility, we are proposing a limited number of methodological standards for the required secret shopper surveys. In § 438.68(f)(4), we propose that secret shopper surveys would have to be completed for a statistically valid sample of providers and: (1) use a random sample; and (2) include all areas of the State covered by the MCO's, PIHP's, or PAHP's contract. We believe these would be the most basic standards that all secret shopper surveys would have to meet to produce useful results that enable comparability between plans and among States. We propose in § 438.68(f)(4)(iii) that secret shopper surveys to determine plan compliance with appointment wait time standards would have to be completed for a statistically valid sample of providers to be clear that a secret shopper surveys must be administered to the number providers identified as statistically valid for each plan. To ensure consistency, equity, and context to the final compliance rate for each plan, we believe it would be important that inaccurate provider directory data not reduce the number of surveys administered. Therefore, as a practical matter, if the initial data provided by a State to the entity performing the survey does not permit surveys to be completed for a statistically valid sample, the State would need to provide additional data to enable completion of the survey for an entire statistically valid sample. We do not believe this provision would need to apply to secret shopper surveys of provider directory data proposed in paragraph (f)(1) since the identification of incorrect directory data is the intent of those surveys and should be reflected in a plan's compliance rate.

Because we believe secret shopper survey results can produce valuable data for States, managed care plans, enrollees and other interested parties, we propose at § 438.68(f)(5), that the results of these surveys would be reported to CMS and posted on the State's website. Specifically, at § 438.68(f)(5)(i), we propose that the results of the secret shopper surveys of provider directory data validation at § 438.68(f)(1) and appointment wait time standards at § 438.68(f)(2) would be reported to CMS annually using the content, form, and submission times proposed in § 438.207(d). At § 438.68(f)(5)(ii), we propose that States post the results on the State's website required at § 438.10(c)(3) within 30 calendar days of the State submitting them to CMS. We believe using the existing report required at § 438.207(d) would lessen burden on States, particularly since we published the Network Adequacy and Access Assurances Report template

in July 2022 and are also developing an electronic reporting portal to facilitate States' submissions. We anticipate

revising the data fields in the Network Adequacy and Access Assurances Report

to include specific fields for secret shopper results, including the provider type chosen by the State as required in § 438.68(e)(1)(iv) and (f)(1)(i)(D). This proposal is authorized by section 1902(a)(6) of the Act which requires that States provide reports, in such form and containing such information, as the Secretary may from time to time require.

https://www.medicaid.gov/medicaid/managed-care/downloads/network-assurances-template.xlsx.

https://www.medicaid.gov/medicaid/managed-care/guidance/medicaid-and-chip-managed-care-reporting/index.html#NETWORK:~:text=Report.%20%C2%A0The%20current-,excel%20template,-(XLSX%2C%20218.99%20KB.

We recognize that implementing secret shopper surveys would be a significant undertaking, especially for States not already using them; but we believe that the data produced by successful implementation of them would be a valuable addition to States' and CMS' oversight efforts. As always, technical assistance would be available to help States effectively implement and utilize secret shopper surveys. We invite comment on the type of technical assistance that would be most useful for States as well as States' best practices and lessons learned from using secret shopper surveys.

We also propose that States would have to comply with § 438.68(f) no later than the first MCO, PIHP, or PAHP rating period that begins on or after 4 years after the effective date of the final rule.

d. Assurances of Adequate Capacity and Services—Provider Payment Analysis (§§ 438.207(b), 457.1230(b))

We believe there needs to be greater transparency in Medicaid and CHIP provider payment rates in order for States and CMS to monitor and mitigate payment-related access barriers. There is considerable evidence that Medicaid payment rates, on average, are lower than Medicare and commercial rates for the same services and that provider payment influences access, with low rates of payment limiting the network of providers willing to accept Medicaid patients, capacity of those providers who do participate in Medicaid, and investments in emerging technology among providers that serve large numbers of Medicaid beneficiaries. However, there is no standardized, comprehensive, cross-State comparative data source available to assess Medicaid and CHIP payment rates across clinical specialties, health plans, and States. Given that a critical component of building a managed care plan network is payment, low payment rates can harm access to care for Medicaid and CHIP enrollees in a number of ways. Evidence suggests that low Medicaid physician fees limit physicians' participation in the program, particularly for behavioral health and primary care providers.

30 31

Relatedly, researchers have found that increases in the Medicaid payment rates are directly associated with increases in provider acceptance of new Medicaid patients. In short, two key drivers of access—provider network size and capacity—are inextricably linked with Medicaid provider payment levels and acceptance of new Medicaid patients.

32 33

While many factors affect provider participation, given the important role rates play in assuring access, greater transparency is needed to understand when and to what extent provider payment may influence access in State Medicaid and CHIP programs to specific provider types or for Medicaid and CHIP beneficiaries enrolled in specific plans.

Holgash K, Heberlein M. Physician acceptance of new Medicaid patients. Washington (DC): Medicaid and CHIP Payment and Access Commission; 2019 Jan 24. Available from

https://www.macpac.gov/wp-content/uploads/2019/01/Physician-Acceptance-of-New-Medicaid-Patients.pdf.

Zuckerman S, Skopec L, and Aarons J. Medicaid Physician Fees Remained Substantially Below Fees Paid by Medicare in 2019.

Health Aff (Millwood).

2021;40(2). doi:10.1377/hlthaff.2020.00611.

National Bureau of Economic Research, “Increased Medicaid Reimbursement Rates Expand Access to Care,” October 2019, available at

https://www.nber.org/bh-20193/increased-medicaid-reimbursement-rates-expand-access-care.

Zuckerman S, Skopec L, and Aarons J. Medicaid Physician Fees Remained Substantially Below Fees Paid by Medicare in 2019.

Health Aff (Millwood).

2021;40(2). doi:10.1377/hlthaff.2020.00611.

We also believe that greater transparency and oversight is warranted as managed care payments have grown significantly as a share of total Medicaid payments; in FY 2021, the Federal government spent nearly $250 billion on payments to managed care plans.

With this growth, we seek to develop, use, and facilitate State use of data to generate insights into important, provider rate related indicators of access. Unlike fee-for-service (FFS) Medicaid and CHIP programs, managed care plans generally have the ability to negotiate unique reimbursment rates for individual providers. Generally, unless imposed by States through a State directed payment or mandated by statute (such as Federally qualified health centers payment requirements established under section 1902(bb) of the Act), there are no Federal regulatory or statutory minimum or maximum limits on the payment rates a managed care plan can negotiate with a network provider. As such, there can be tremendous variation among plans' payment rates, and we often do not have sufficient visibility into those rates to perform analyses that would promote a better understanding of how these rates are impacting access. Section 438.242(c)(3) for Medicaid, and through cross-reference at § 457.1233(d) for separate CHIP, requires managed care plans to submit to the State all enrollee encounter data, including allowed amounts and paid amounts, that the State is required to report to CMS. States are then required to submit those data to T-MSIS as required in § 438.818 for Medicaid, and through cross-reference at § 457.1233(d) for separate CHIP. However, variation in the quantity and quality of T-MSIS data, particularly for data on paid amounts, remains. We believe that provider payment rates in managed care are inextricably linked with provider network sufficiency and capacity and seek to propose a process through which managed care plans must report, and States must review and analyze, managed care payment rates to providers as a component of States' responsibility to ensure network adequacy and enrollee access consistent with State and Federal standards. Linking payment levels to quality of care is consistent with a strategy that we endorsed in our August 22, 2022 CIB

urging States to link Medicaid payments to quality measures to improve the safety and quality of care.

Congressional Budget Office, “Baseline Projections—Medicaid,” May 2022, available at

https://www.cbo.gov/system/files/2022-05/51301-2022-05-medicaid.pdf.

https://www.medicaid.gov/federal-policy-guidance/downloads/cib08222022.pdf.

To ensure comparability in managed care plans' payment analyses, we propose to require a payment analysis that managed care plans would submit to States per § 438.207(b)(3) and States would review and include in the assurance and analysis to CMS per § 438.207(d). Specifically, we propose to replace the periods at the end of § 438.207(b)(1) and (2) with semi-colons and add “and” after § 438.207(b)(2) to make clear that (b)(1) through (3) would all be required for Medicaid managed care, and for separate CHIP through an existing cross-reference at § 457.1230(b).

At § 438.207(b)(3) for Medicaid, and for separate CHIP through an existing cross-reference at § 457.1230(b), we propose to require that MCOs, PIHPs, and PAHPs submit annual documentation to the State that demonstrates a payment analysis showing their level of payment for certain services, if covered by the managed care plan's contract. We

propose that the analysis would use paid claims data from the immediate prior rating period to ensure that all payments are captured, including those that are negotiated differently than a plan's usual fee schedule. We also believe it is important to use claims data to ensure that utilization would be considered to prevent extremely high or low payments from inappropriately skewing the results. We acknowledge that paid claims data would likely not be complete within 180 days of the end of a rating period, which is when this analyis is proposed to be reported by the State in § 438.207(d)(3)(ii). However, we believe that the data would be sufficiently robust to produce a reasonable percentage that reflects an appropriate weighting to each payment based on actual utilization and could be provided to the State far enough in advance of the State submitting its reporting to CMS to be incorporated. We believe this analysis of payments would provide States and CMS with vital information to assess the adequacy of payments to providers in managed care programs, particularly when network deficiencies or quality of care issues are identified or grievances are filed by enrollees regarding access or quality.

In § 438.207(b)(3)(i) for Medicaid, and for separate CHIP through an existing cross-reference at § 457.1230(b), we propose to require that each MCO, PIHP, and PAHP would use paid claims data from the immediate prior rating period to determine the total amount paid for evaluation and management current procedural terminology (CPT) codes for primary care, OB/GYN, mental health, and SUD services. Due to the unique payment requirements in section 1902(bb) of the Act for Federally qualified health centers and rural health clinics, we propose in § 438.207(b)(3)(iv) to exclude these provider types from the analysis. We further propose that this analysis provide the percentage that results from dividing the total amount the managed care plan paid by the published Medicare payment rate for the same codes on the same claims. Meaning, the payment analysis would reflect the comparison of how much the managed care plan paid for the evaluation and managment CPT codes to the published Medicare payment rates including claim-specific factors such as provider type, geographic location where the service was rendered, and the site of service. In § 438.207(b)(3)(i)(A) for Medicaid, and for separate CHIP through an existing cross-reference at § 457.1230(b), we also propose that the plans would include in the analysis separate total amounts paid and separate comparison percentages to Medicare for primary care, OB/GYN, mental health, and substance use disorder services for ease of analysis and clarity. Lastly in § 438.207(b)(3)(i)(B) for Medicaid, and for separate CHIP through an existing cross-reference at § 457.1230(b), we propose that the percentages would have to be reported separately if they differ between adult and pediatric services. We believe the proposals in § 438.207(b)(3)(i)(A) and (B) would ensure sufficient detail in the data to enable more granular analysis across plans and States as well as to prevent some data from obscuring issues with other data. For example, if payments for adult primary care are significantly lower than pediatric primary care, providing separate totals and comparison percentages would prevent the pediatric data from artificially inflating the adult totals and percentages. We believe this level of detail would be necessary to prevent misinterpretation of the data.

We propose in § 438.207(b)(3)(ii) for Medicaid, and for separate CHIP through an existing cross-reference at § 457.1230(b), to require that the payment analysis provide the total amount paid for homemaker services, home health aide services, and personal care services and the percentage that results from dividing the total amount paid by the amount the State's Medicaid or CHIP FFS program would have paid for the same claims. We propose two differences between this analysis and the analysis in § 438.207(b)(3)(i): first, this analysis would use all codes for the services as there are no evaluation and management CPT codes for these LTSS; and second, we propose the comparison be to Medicaid or CHIP FFS payment rates, as applicable, due to the lack of comparable Medicare rates for these services. We propose these three services as we believe these have high impact to help keep enrollees safely in the community and avoid institutionalization. Again, we believe this analysis of payment rates would be important to provide States and CMS with information to assess the adequacy of payments to providers in managed care programs, particularly when enrollees have grievances with services approved in their care plans not being delivered or not delivered in the authorized quantity. We request comment on whether in-home habilitation provided to enrollees with IDD should be added to this analysis.

We believe that managed care plans could perform the analyses in § 438.207(b)(3)(i) and (ii) by: (1) Identifying paid claims in the prior rating period for each required service type; (2) identifying the appropriate codes and aggregating the payment amounts for the required service types; and (3) calculating the total amount that would be paid for the same codes on the claims at 100 percent of the appropriate published Medicare rate, or Medicaid/CHIP FFS rate for the analysis in § 438.207(b)(3)(ii), applicable on the date of service. For the aggregate percentage, divide the total amount paid (from 2. above) by the amount for the same claims at 100 percent of the appropriate published Medicare rate or Medicaid/CHIP FFS, as appropriate (from 3. above). We believe this analysis would require a manageable number of calculations using data readily available to managed care plans.

To ensure that the payment analysis proposed in paragraph (b)(3) is appropriate and meaningful, we propose at § 438.207(b)(3)(iii) for Medicaid, and for separate CHIP through an existing cross-reference at § 457.1230(b), to exclude payments for claims for the services in (b)(3)(i) for which the managed care plan is not the primary payer. A comparison to payment for cost sharing only or payment for a claim for which another payer paid a portion would provide little, if any, useful information.

The payment analysis proposed at § 438.207(b)(3) is authorized by sections 1932(c)(1)(A)(ii) and 2103(f)(3) of the Act, which requires States' quality strategies to include an examination of other aspects of care and service directly related to the improvement of quality of care. The authority for our proposals is extended to PIHPs and PAHPs through regulations based on our authority under section 1902(a)(4) of the Act. Because the proposed payment analysis would generate data on each managed care plan's payment levels for certain provider types as a percent of Medicare or Medicaid FFS rates, States could use the analysis in their examination of other aspects of care and service directly related to the improvement of quality of care, particularly access. Further, sections 1932(c)(1)(A)(iii) and 2103(f)(3) of the Act authorizes the proposals in this section as enabling States to compare payment data among managed care plans in their program could provide useful data to fulfill their obligations for monitoring and evaluating quality and appropriateness of care.

We also propose to revise § 438.207(f) to reflect that States would have to comply with § 438.207(b)(3) no later than the first rating period that begins on or after 2 years after the effective date

of the final rule as we believe this is a reasonable timeframe for compliance.

e. Assurances of Adequate Capacity and Services Reporting (§§ 438.207(d), 457.1230(b))

Currently at § 438.207(d), States are required to review the documentation submitted by their managed care plans, as required at § 438.207(b), and then submit to CMS an assurance of their managed care plans' compliance with §§ 438.68 and 438.206. To make States' assurances and analyses more comprehensive, we propose to revise § 438.207(d) to explicitly require States to include the results from the secret shopper surveys proposed in § 438.68(f) (see section I.B.1.c. of this proposed rule) and included in separate CHIP regulations through an existing cross-reference at § 457.1230(b). We also propose to require States to include the payment analysis proposed in § 438.207(b)(3) (see section I.B.1.d. of this proposed rule) to their assurance and analyses reporting. Additionally, on July 6, 2022, we published a CIB

that provided a reporting template Network Adequacy and Access Assurances Report

for the reporting required at § 438.207(d). To be clear that States would have to use the published template, we propose to explicitly require that States submit their assurance of compliance and analyses required in § 438.207(d) in the “format prescribed by CMS.” The published template would fulfill this requirement as would future versions including any potential electronic formats. We believe the revision proposed in § 438.207(d) would be necessary to ensure consistent reporting to CMS and enable effective analysis and oversight. Lastly, because we propose new requirements related to the inclusion of the payment analysis and the timing of the submission of this reporting to CMS, we propose to redesignate the last sentence in § 438.207(d) as § 438.207(d)(1) and create a new § 438.207(d)(2) and (3).

https://www.medicaid.gov/federal-policy-guidance/downloads/cib07062022.pdf.

https://www.medicaid.gov/medicaid/managed-care/downloads/network-assurances-template.xlsx.

In § 438.207(d)(2) for Medicaid and included in separate CHIP regulations through an existing cross-reference at § 457.1230(b), we propose that the States' analysis required in § 438.207(d)(1) must include the payment analysis required of plans in § 438.207(b)(3) and provide the elements specified in paragraphs (d)(2)(i) and (ii). Specifically, § 438.207(d)(2)(i) proposes to require States to include the data submitted by each plan and § 438.207(d)(2)(ii) proposes to require States to use the data from its plans' reported payment analysis percentages and weight them using the member months associated with the applicable rating period to produce a Statewide payment percentage for each service type. We believe these data elements would provide valuable new data to support States' assurances of network adequacy and access and we would revise the Network Adequacy and Access Assurances Report template published in July 2022 to add fields for States to easily report these data. We remind States that § 438.66(a) and (b) require States to have a monitoring system for all of their managed care programs and include all aspects, including the performance of their managed care plans in the areas of availability and accessibility of services, medical management, provider network management, and appeals and grievances. Accordingly, States should have ample data from their existing monitoring activities and which would be supplemented by the proposal requirements in this rule, to improve the performance of their managed care programs for all covered services, as required in § 438.66(c). Because concerns around access to primary care, mental health, and SUD services have been raised nationally, we expect States to review and analyze their plans' data holistically to provide a robust, comprehensive analysis of the adequacy of each plan's network and level of realistic access and take timely action to address deficiencies.

Section 438.207(d) was codified in 2002 (67 FR 41010) as part of the implementing regulations for section 1932(b)(5) of the Act “Demonstration of Adequate Capacity and Services.” In the 2016 final rule, we made minor revisions to the language but did not address the timing of States' submission of their assurance and analysis. Given the July 2022 release of the Network Adequacy and Access Assurances Report template for the assurance and analysis, we believe it would be appropriate to clarify this important aspect of the reporting requirement. To simplify the submission process and enable States and CMS to allot resources most efficiently, we propose to establish submission times in § 438.207(d)(3)(i) through (iii) that correspond to the times for managed care plans to submit documentation to the State in § 438.207(c)(1) through (3). Specifically for Medicaid, we propose that States submit their assurance and analysis at § 438.207(d)(3): (1) at the time it submits a completed readiness review, as specified at § 438.66(d)(1)(iii); (2) on an annual basis and no later than 180 calendar days after the end of each contract year; and (3) any time there has been a significant change as specified in § 438.207(c)(3) and with the submission of the associated contract. We also propose in § 438.207(d)(3) that States must post the report required in § 438.207(d) on their website within 30 calendar days of submission to CMS. We believe the information in this report would be important information for interested parties to have access to on a timely basis and 30 calendar days seems adequate for States to post the report after submitting.

Since we did not adopt the MCPAR requirements for separate CHIP managed care in the 2016 final rule, we are also not adopting the proposed submission timeframe at § 438.207(d)(3)(i). However, we propose for separate CHIPs to align with Medicaid for the proposed network adequacy analysis submission timeframes at § 438.207(d)(3)(ii) and (iii) through the existing cross-reference at § 457.1230(b).

In § 438.207(e), we propose a conforming revision to add a reference to the secret shopper evaluations proposed at § 438.68(f) as part of the documentation that States must make available to CMS, upon request, and included in separate CHIP regulations through an existing cross-reference at § 457.1230(b). We believe this would be necessary as the current text of § 438.207(e) only addresses the documentation provided by the managed care plans.

Sections 1932(b)(5) and 2103(f)(3) of the Act require Medicaid and CHIP MCOs to demonstrate adequate capacity and services by providing assurances to the State and CMS, as specified by the Secretary, that it has the capacity to serve the expected enrollment in its service area, including assurances that it offers an appropriate range of services and access to preventive and primary care services for the population expected to be enrolled in such service area, and maintains a sufficient number, mix, and geographic distribution of providers of services. The authority for our proposals is extended to PIHPs and PAHPs through regulations based on our authority under section 1902(a)(4) of the Act. Our proposals to require States to include the secret shopper surveys proposed in § 438.68(f) as well as the reimbursment analysis proposed in § 438.207(b)(3) to their assurance and analyses reporting proposed at § 438.207(d) are authorized by section 1932(b)(5) of the Act for Medicaid and

authorized for CHIP through section 2103(f)(3) of the Act because the States' reports reflect the documentation and assurances provided by their managed care plans of adequate capacity, an appropriate range of services, and access to a sufficient number, mix, and geographic distribution of network providers. Sections 1932(b)(5) and 2103(f)(3) of the Act also require that the required assurances be submitted to CMS in a time and manner determined by the Secretary; that information is proposed in § 438.207(d)(3)(i) through (iii) and corresponds to the requirements for submission of documenation from managed care plans in § 438.207(c)(3).

We also propose to revise § 438.207(g) to reflect that States would have to comply with paragraph (d)(2) no later than the first managed care plan rating period that begins on or after 2 years after the effective date of the final rule and paragraph (d)(3) no later than the first managed care plan rating period that begins on or after 1 year after the effective date of the final rule. We propose that States would not be held out of compliance with the requirements of paragraphs (e) of this section prior to the first MCO, PIHP, or PAHP rating period that begins on or after 4 years after the effective date of the final rule, so long as they comply with the corresponding standard(s) codified in paragraph (e) contained in the 42 CFR, parts 430 to 481, most recently published before the final rule. We propose that States would have to comply with paragraph (f) no later than the first managed care plan rating period that begins on or after 4 years after the effective date of the final rule. We believe these are reasonable timeframes for compliance given the level of new burden imposed by each.

f. Remedy Plans To Improve Access (§ 438.207(f))

For FFS programs, we rely on § 447.203(b)(8) to require States to submit corrective action plans when access to care issues are identified. Because of the numerous proposals in this rule that would strengthen States' monitoring and enforcement of access requirements and the importance of timely remediation of access issues, we believe we should have a similar process set forth in part 438 for managed care programs. In § 438.68(e), we propose a process that would require States to carefully develop and enforce their managed care plans' use of appointment wait time standards to ensure access to care for Medicaid managed care enrollees. As proposed in a new § 438.207(f), when the State, MCO, PIHP, PAHP, or CMS identifies any access issues, including any access issues with the standards specified in §§ 438.68 and 438.206, the State would be required to submit a plan to remedy the access issues consistent with this proposal. If we determine that an access issue revealed under monitoring and enforcement rises to the level of a violation of access requirements under section 1932(c)(1)(A)(i) of the Act, as incorporated in section 1903(m)(2)(A)(xii) of the Act, we have the authority to disallow Federal financial participation (FFP) for the payments made under the State's managed care contract for failure to ensure adequate access to care. We intend to closely monitor any State remedy plans that would be needed under this proposal to ensure that both us and States would adequately and appropriately address emerging access issues in Medicaid managed care programs. Using § 447.203(b)(8) as a foundation, we propose to redesignate existing § 438.207(f) as § 438.207(g) and propose a new requirement for States to submit remedy plans in new § 438.207(f), titled Remedy plans

improve access. In § 438.207(f)(1), we propose that when the State, MCO, PIHP, PAHP, or CMS identifies an issue with a managed care plan's performance with regard to any State standard for access to care under this part, including the standards at §§ 438.68 and 438.206, States would follow the steps set forth in paragraphs (i) through (iv). First, in paragraph (1)(i), States would have to submit to CMS for approval a remedy plan no later than 90 calendar days following the date that the State becomes aware of an MCO's, PIHP's, or PAHP's access issue. We believe 90 calendar days would be sufficient time for States to effectively assess the degree and impact of the issue and develop an effective set of steps including timelines for implementation and completion, as well as responsible parties. In § 438.207(f)(1)(ii), we propose that the State would have to develop a remedy plan to address the identified issue that if addressed could improve access within 12 months and that identifies specific steps, timelines for implementation and completion, and responsible parties. We believe 12 months would be a reasonable amount of time for States and their managed care plans to implement actions to address the access issue and improve access to services by enrollees of the MCO, PIHP, or PAHP. We do not propose to specify that the remedy plan would be implemented by the managed care plans or the State; rather, we propose that the remedy plan would identify the responsible party required to make the access improvements at issue, which would often include actions by both States and their managed care plans. Additionally, we believe this proposal acknowledges that certain steps that may be needed to address provider shortages can only be implemented by States. For example, changing scope of practice laws to enable more providers to fill gaps in access or joining interstate compacts to enable providers to practice geographically due to the opportunity to hold one multistate license valid for practice in all compact States, streamlined licensure requirements, reduced expenses associated with obtaining multiple single-State licenses, and the creation of systems that enable electronic license application processes. Lastly, in § 438.207(f)(1)(ii), we propose some approaches that States could consider to address the access issue, such as increasing payment rates to providers, improving outreach and problem resolution to providers, reducing barriers to provider credentialing and contracting, providing for improved or expanded use of telehealth, and improving the timeliness and accuracy of processes such as claim payment and prior authorization.

We propose in § 438.207(f)(1)(iii) to require States to ensure that improvements in access are measurable and sustainable. We believe it would be critical that the remedy plan produce measurable results in order to monitor progress and, ultimately, bring about the desired improvements in access under the managed care plan. We also propose that the improvements in access achieved by the actions be sustainable so that enrollees would be able to continue receiving the improved access to care and managed care plans would continue to ensure its provision. In paragraph (f)(1)(iv) of this section, we propose that States submit quarterly progress updates to CMS on implementation of the remedy plan so that we would be able to determine if the State was making reasonable progress toward completion and that the actions in the plan are effective. Not properly monitoring progress of the remedy plan could significantly lessen the effectiveness of it and allow missed opportunities to make timely revisions and corrections.

Lastly, in paragraph (f)(2) of this section we propose that if the remedy plan required in paragraph (f)(1) of this section does not address the managed care plan's access issue within 12 months, we may require the State to continue to take steps to address the

issue for another 12 months and may require revision to the remedy plan. We believe proposing that we be able to extend the duration of actions to improve access and/or require the State to make revision to the remedy plan would be critical to ensuring that the State's and managed care plans' efforts are effective at addressing the identified access issue.

These proposals are authorized by section 1902(a)(4)(A) of the Act, which provides for methods of administration found necessary by the Secretary for the proper and efficient operation of the plan as we believe States taking timely action to address identified access issues is fundamental and necessary to the operation of an effective and efficient Medicaid program. The proposal for States to submit quarterly progress reports is authorized by section 1902(a)(6) of the Act which requires that States provide reports, in such form and containing such information, as the Secretary may from time to time require. Lastly, we believe these proposals are also authorized by section 1932(c)(1)(A)(i) and (iii) of the Act which require States that contract with MCOs to develop and implement a quality assessment and improvement strategy that includes (and extended to PIHPs and PAHPs through regulations based on our authority under section 1902(a)(4) of the Act): standards for access to care so that covered services are available within reasonable timeframes and in a manner that ensures continuity of care and adequate primary care and specialized services capacity and procedures for monitoring and evaluating the quality and appropriateness of care and services to enrollees and requirements for provision of quality assurance data to the State. Implementing timely actions to address managed care plan access issues would be an integral operational component of a State's quality assessment and improvement strategy.

g. Transparency (§§ 438.10(c), 438.602(g), 457.1207, 457.1285)

In the 2016 final rule, we finalized § 438.10(c)(3) for Medicaid, which is included in separate CHIP regulations through cross-reference at § 457.1207, which required States to operate a website that provides specific information, either directly or by linking to individual MCO, PIHP, PAHP, or PCCM entity websites. A State's website may be the single most important resource for information about its Medicaid program and there are multiple requirements for information to be posted on a State's website throughout 42 CFR part 438. Current regulations at § 438.10(c)(6)(ii) require certain information to be “prominent and readily accessible” and § 438.10(a) defines “readily accessible” as “electronic information and services which comply with modern accessibility standards such as section 508 guidelines, section 504 of the Rehabilitation Act, and W3C's Web Content Accessibility Guidelines (WCAG) 2.0 AA and successor versions.” Despite these requirements, we have received input from numerous and varied interested parties since the 2016 final rule about how challenging it can be to locate regulatorily required information on some States' websites.

There is variation in how “user-friendly” States' websites are, with some States making navigation on their website fairly easy and providing information and links that are readily available and presenting required information on one page. However, we have not found this to be the case for most States. Some States have the required information scattered on multiple pages that requires users to click on many links to locate the information they seek. While such websites may meet the current minimum standards in part 438, they do not meet our intent of providing one place for interested parties to look for all required information. Therefore, we believe revisions are necessary to ensure that all States' websites required by § 438.10(c)(3) provide a consistent and easy user experience. We acknowledge that building websites is a complex and costly endeavor that requires consideration of many factors, but we believe that States and managed care plans share an obligation to build websites that quickly and easily meet the needs of interested parties without undue obstacles. We note that State and managed care plan websites must be compliant with civil rights laws, including the Americans with Disabilities Act (ADA), section 504 of the Rehabilibation Act, Title VI of the Civil Rights Act of 1964, and section 1557 of the Affordable Care Act. In this proposed rule, we believe that there are several minimal qualities that all websites should include, such as being able to:

• Function quickly and as expected by the user;

• Produce accurate results;

• Use minimal, logical navigation steps;

• Use words and labels that users are familiar with for searches;

• Allow access, when possible, without conditions such as establishment of a user account or password;

• Provide reasonably comparable performance on computers and mobile devices;

• Provide easy access to assistance via chat; and

• Provide multilingual content for individuals with LEP.

We also believe that States and managed care plans should utilize web analytics to track website utilization and inform design changes. States should create a dashboard to regularly quantify website traffic, reach, engagement, sticking points, and audience characteristics. Given the critical role that websites fill in providing necessary and desired program information, we believe proposing additional requirements on States' websites are appropriate.

We acknowledge that States and managed care plans may have information accessible through their websites that is not public facing; for example, enrollee specific protected health information. Proper security mechanisms should continue to be utilized to prevent unauthorized access to non-public facing information, such as the establishment of a user account and password or entry of other credentials. Data security must always be a priority for States and managed care plans and the proposals in § 438.10(c)(3) in no way diminish that obligation for States.

To increase the effectiveness of States' websites and add some consistency to website users' experence, we propose in § 438.10(c)(3) to revise “websites” to “web pages” in the reference to managed care plans. We propose this change to clarify that if States provide required content on their website by linking to individual MCO, PIHP, PAHP, or PCCM entity websites, the link on the State's site would have to be to the specific page that includes the requested information. We believe this would prevent States from showing links to a landing page for the managed care plan that then leaves the user to start searching for the specific information needed. Next, we propose to add “States must:” to paragraph (c)(3) before the items specified in new (c)(3)(i) through (iv). In § 438.10(c)(3)(i), we propose to require that all information, or links to the information, required in this part to be posted on the State's website, be available from one page. We believe that when website users have to do repeated searches or click through multiple pages to find information, they are more likely to give up trying to locate it. As such, we have carefully chosen the information that is required in 42 CFR part 438 to be posted on States' websites to ensure effective

communication of information and believe it represents an important step toward eliminating common obstacles for States' website users.

At § 438.10(c)(3)(ii), we propose to require that States' websites use clear and easy to understand labels on documents and links so that users can easily identify the information contained in them. We believe that using terminology and the reading grade level consistent with that used in other enrollee materials, such as handbooks and notices, would make the website more familiar and easy to read for enrollees and potential enrollees. Similar to having all information on one page, using clear labeling would reduce the likelihood of users having to make unncessary clicks as they search for specific information.

In § 438.10(c)(3)(iii), we propose to require that States check their websites at least quarterly to verify that they are functioning as expected and that the information is the most currently available. Malfunctioning websites or broken links can often render a website completely ineffective, so monitoring a website's performance and content is paramount. While we are proposing that a State's website be checked for functionality and information timeliness no less than quarterly, we believe this is a minimum standard and that States should implement continual monitoring processes to ensure the accuracy of their website's performance and content.

Lastly, in § 438.10(c)(3)(iv), to enable maximum effectiveness of States' websites, we propose to require that States' websites explain that assistance in accessing the information is available at no cost to them, including information on the availability of oral interpretation in all languages and written translation in each prevalent non-English language, alternate formats, auxiliary aids and services, and a toll-free TTY/TDY telephone number. This proposal is consistent with existing information requirements in § 438.10(d) and section 1557 of the Affordable Care Act. Clear provision of this information would help to ensure that all users have access to States' websites and can obtain assistance when needed.

The Medicaid managed care website transparency revisions proposed at § 438.10(c)(3)(i) through (iv) would apply to separate CHIP through the existing cross-reference at § 457.1207.

To help States monitor their website for required content, we propose to revise § 438.602(g) to contain a more complete list of information. While we believe the list proposed in § 438.602(g) would help States verify their website's compliance, we clarify that a requirement to post materials on a State's website in 42 CFR part 438 or any other Federal regulation but omitted from § 438.602(g), is still in full force and effect. Further, requirements on States to post specific information on their websites intentionally remain throughout 42 CFR part 438 and are not replaced, modified, or superceded by the items proposed in § 438.602(g)(5) through (12). Currently § 438.602(g) specifies four types of information that States must post on their websites; we propose to add nine more as (g)(5) through (g)(13): (5) enrollee handbooks, provider directories, and formularies required at § 438.10(g), (h), and (i); (6) information on rate ranges required at § 438.4(c)(2)(iv); (7) reports required at §§ 438.66(e) and 438.207(d); (8) network adequacy standards required at § 438.68(b)(1) and (2), and (e); (9) secret shopper survey results required at § 438.68(f); (10) State directed payment evaluation reports required in § 438.6(c)(2)(v)(C); (11) links to all required Application Programming Interfaces including as specified in § 431.60(d) and (f); (12) quality related information required in §§ 438.332(c)(1), 438.340(d), 438.362(c) and 438.364(c)(2)(i); and (13) documentation of compliance with requirements in subpart K—Parity in Mental Health and Substance Use Disorder Benefits. Although we are proposing to itemize these nine types of information in § 438.602(g)(5) through (13), we note that all but the following three are currently required to be posted on States' websites: the report at § 438.207(d), secret shopper survey results at § 438.68(f), and State directed payment evaluation reports at § 438.6(c)(2)(v)(C). Lastly, in § 438.10(c)(3), we propose to make the list of website content more complete by removing the current references to paragraphs (g) through (i) only and including a reference to § 438.602(g) and “elsewhere in this part.”

We propose to revise § 438.10(j) to reflect that States would have to comply with § 438.10(c)(3) no later than the first managed care plan rating period that begins on or after 2 years after the effective date of the final rule and that States would have to comply with § 438.10(d)(2) no later than the first managed care plan rating period that begins on or after 3 years after the effective date of the final rule. Lastly, we propose that States must comply with § 438.10(h)(3)(iii) no later than the first managed care plan rating period that begins on or after 4 years after the effective date of the final rule. We believe these proposed compliance dates would provide reasonable time for compliance given the varying levels of State and managed care plan burden.

We propose to add § 438.602(j) to require States to comply with § 438.602(g)(5) through (13) no later than the first managed care plan rating period that begins on or after 2 years after the effective date of the final rule. We believe this is a reasonable timeframe for compliance.

For separate CHIP managed care, we currently require States to comply with the transparency requirements at § 438.602(g) through an existing cross-reference at § 457.1285. We propose to align with Medicaid in adopting most of the consolidated requirements for posting on a State's website proposed at § 438.602(g)(5) through (13) for separate CHIP.

We propose to adopt the provision at § 438.602(g)(5) (which specifies that States must post enrollee handbooks, provider directories, and formularies on the State's website) because requirements at § 438.10(g) through (i) are currently required for separate CHIP through an existing cross-reference at § 457.1207.

We do not plan to adopt the provision at § 438.602(g)(6) (which requires that States must post information on rate ranges on their websites) because we do not regularly review rates for separate CHIP.

We propose to adopt the provision at § 438.602(g)(7) (which specifies that States must post their assurances of network adequacy on the State's website) since the proposed network adequacy reporting at § 438.207(d) would apply to separate CHIP through an existing cross-reference at § 457.1230(b) (see section I.B.1.e. of this proposed rule). Since we did not adopt the managed care program annual reporting requirements at § 438.66(e) for separate CHIP, we propose to exclude this reporting requirement at § 457.1230(b).

We propose to adopt the provision at § 438.602(g)(8) (which requires State network adequacy standards to be posted on the State's website) for separate CHIP because we propose to adopt the new appointment wait time reporting requirements through an existing cross-reference at § 457.1230(b) (see section I.B.1.e. of this proposed rule), though we propose to exclude references to LTSS as not applicable to separate CHIP.

We propose to adopt the provision at § 438.602(g)(9) (which specifies that States must post secret shopper survey results on the State's website) for separate CHIP network access reporting to align with our proposed adoption of

secret shopper reporting at § 438.68(f) through an existing cross-reference at § 457.1218 (see section I.B.1.c. of this proposed rule).

We do not propose to adopt the provision at § 438.602(g)(10) (which directs States to post SDP evaluation reports on the State's website) because State directed payments are not applicable to separate CHIP.

We propose to adopt the provision at § 438.602(g)(11) (which specifies that States must post required information for Application Programming Interfaces on the State's website) given the existing requirements at § 457.1233(d).

We propose to adopt the provision at § 438.602(g)(12) (which requires States to post quality-related information on the State's website) for separate CHIP as required through cross-references at § 457.1240(c) and (e), as well as the applicable EQR report through a cross-reference at § 457.1250(a). However, we propose to exclude the reference to § 438.362(c) since MCO EQR exclusion is not applicable to separate CHIP.

We propose to adopt the provision at § 438.602(g)(13) (which requires States to post documentation of compliance with parity in mental health and substance use disorder benefits on the State's website) for separate CHIP through the existing cross-reference at § 457.1285. However, we propose to replace the reference to subpart K of part 438 with CHIP parity requirements at § 457.496 in alignment with contract requirements at § 457.1201(l).

We propose to amend § 457.1285 to state, the State must comply with the program integrity safeguards in accordance with the terms of subpart H of part 438 of this chapter, except that the terms of §§ 438.66(e), 438.362(c), 438.602(g)(6) and (10), 438.604(a)(2) and 438.608(d)(4) and references to LTSS of this chapter do not apply and that references to subpart K under part 438 should be read to refer to parity requirements at § 457.496.

Our proposals for requirements for States' websites at § 438.10(c)(3) and the list proposed in § 438.602(g) are authorized by sections 1932(a)(5)(A) and 2103(f)(3) of the Act for Medicaid and which require each State, enrollment broker, or managed care entity to provide all enrollment notices and informational and instructional materials in a manner and form which may be easily understood by enrollees and potential enrollees. The authority for our proposals is extended to PIHPs and PAHPs through regulations based on our authority under section 1902(a)(4) of the Act. We believe that our proposals would make States' websites easier to use by incorporating easily understood labels, having all information accessible from one page, verifying the accurate functioning of the site, and clearly explaining the availability of assistance—all of which would directly help States fulfill their obligation to provide informational materials in a manner and form which may be easily understood.

h. Terminology (§§ 438.2, 438.3(e), 438.10(h), 438.68(b), 438.214(b))

Throughout 42 CFR part 438, we use “behavioral health” to mean mental health and SUD. However, it is an imprecise term that does not capture the full array of conditions that are intended to be included, and some in the SUD treatment community have raised concerns with its use. It is important to use clear, unambiguous terms in regulatory text. Therefore, we propose to change “behavioral health” throughout 42 CFR part 438 as described here. In the definition of PCCM entity at § 438.2 and for the provider types that must be included in provider directories at § 438.10(h)(2)(iv), we propose to replace “behavioral health” with “mental health and substance use disorder;” for the provider types for which network adequacy standards must be developed in § 438.68(b)(1)(iii), we propose to remove “behavioral health” and the parentheses; and for the provider types addressed in credentialing policies at § 438.214(b), we propose to replace “behavioral” with “mental health.” We also propose in the definition of PCCM entity at § 438.2 to replace the slash between “health systems” and “providers” with “and” for grammatical accuracy.

Similarly, we also propose to change “psychiatric” to “mental health” in § 438.3(e)(2)(v) and § 438.6(e). We believe that “psychiatric” does not capture the full array of services that can be provided by IMDs.

These proposals are authorized by section 1902(a)(4)(A) of the Act, which provides for methods of administration found necessary by the Secretary for the proper and efficient operation of the plan, because use of clear, unambiguous terms in regulatory text is imperative for proper and efficient operation of the plan.

2. State Directed Payments (42 CFR 438.6, 438.7, 430.3)

a. Background

Section 1903(m)(2)(A) of the Act requires contracts between States and MCOs to provide payment under a risk-based contract for services and associated administrative costs that are actuarially sound. CMS has historically used our authority under section 1902(a)(4) of the Act to apply the same requirements to contracts between States and PIHPs or PAHPs. Under risk-based managed care arrangements with the State, Medicaid managed care plans have the responsibility to negotiate payment rates with providers. Subject to certain exceptions, States are generally not permitted to direct the expenditures of a Medicaid managed care plan under the contract between the State and the plan or to make payments to providers for services covered under the contract between the State and the plan (§§ 438.6 and 438.60, respectively). However, there are circumstances in which a State may believe that requiring managed care plans to make specified payments to health care providers is an important tool in furthering the State's overall Medicaid program goals and objectives; for example, funding to ensure certain minimum payments are made to safety net providers to ensure access to care, funding to enhance behavioral health care providers as mandated by State legislative directives, or funding for quality payments to ensure providers are appropriately rewarded for meeting certain program goals. Because this type of State direction reduces the plan's ability to effectively manage costs, CMS, in the 2016 final rule, established specific exceptions to the general rule prohibiting States from directing the expenditures of MCOs, PIHPs and PAHPs at § 438.6(c)(1)(i) through (iii). These exceptions came to be known as State directed payments (SDPs).

The current regulations at § 438.6(c) specify the parameters for how and when States may direct the expenditures of their Medicaid managed care plans and the associated requirements and prohibitions on such arrangements. Permissible SDPs include directives that certain providers of the managed care plan participate in value-based purchasing (VBP) models, that certain providers participate in multi-payer or Medicaid-specific delivery system reform or performance improvement initiatives, or that the managed care organization adhere to certain fee schedule requirements (for example, minimum fee schedules, maximum fee schedules, and uniform dollar or percentage increases). Among other requirements, § 438.6(c) requires SDPs to be based on the utilization and delivery of services under the managed care contract and expected to advance at least one of the objectives in the State's managed care quality strategy.

All SDPs must be included in all applicable managed care contract(s) and described in all applicable rate certification(s) as noted in § 438.7(b)(6).

Further, § 438.6(c)(2)(ii) requires that most SDPs be approved in writing prior to implementation.

To obtain written prior approval, States must submit a “preprint” form to CMS to document how the SDP complies with the Federal requirements outlined in § 438.6(c).

States must obtain written approval of certain SDPs in order for CMS to approve the corresponding Medicaid managed care contract(s) and rate certifications(s). States were required to comply with this prior approval requirement for SDPs no later than the rating period for Medicaid managed care contracts starting on or after July 1, 2017.

State directed payments that are minimum fee schedules for network providers that provide a particular service under the contract using State plan approved rates as defined in § 438.6(a) are not subject to the written prior approval requirement at § 438.6(c)(2)(ii); however, they must comply with the requirements currently at § 438.6(c)(2)(ii)(A) through (F) (other than the requirement for prior written approval) and be appropriately documented in the managed care contract(s) and rate certification(s).

https://www.medicaid.gov/medicaid/managed-care/downloads/sdp-4386c-preprint-template.pdf.

Each SDP preprint submitted to CMS is reviewed by a Federal review team to ensure that the payments comply with the regulatory requirements in § 438.6(c) and other applicable law. The Federal review team consists of subject matter experts from various components and groups within CMS, which regularly include those representing managed care policy and operations, quality, and actuarial science. Over time, these reviews have expanded to include subject matter experts on financing of the non-Federal share and demonstration authorities when needed. The CMS Federal review team works diligently to ensure a timely review and that standard operating procedures are followed for a consistent and thorough review of each preprint. Most preprints are reviewed on an annual basis; SDPs that are for VBP arrangements, delivery system reform, or performance improvement initiatives and that meet additional criteria in the Federal regulations are eligible for multi-year approval.

CMS has issued guidance to States regarding SDPs on multiple occasions. In November 2017, CMS published the initial preprint form

along with guidance for States on the use of SDPs.

In May 2020, CMS published guidance on managed care flexibilities to respond to the COVID-19 public health emergency (PHE), including how States could use SDPs in support of their COVID-19 response efforts.

In January 2021, CMS published additional guidance for States to clarify existing policy, and also issued a revised preprint form that States must use for rating periods beginning on or after July 1, 2021.

The revised preprint form is more comprehensive compared to the initial preprint, and it is designed to systematically collect the information that CMS identified as necessary as part of our review of SDPs to ensure compliance with the Federal regulatory requirements.

This includes identification of the estimated total dollar amount for the SDP, an analysis of provider reimbursement rates for the class(es) of providers that the SDP is targeting, and information about the sources of the non-Federal share used to finance the SDP.

https://www.medicaid.gov/sites/default/files/2020-02/438-preprint.pdf.

https://www.medicaid.gov/sites/default/files/federal-policy-guidance/downloads/cib11022017.pdf.

https://www.medicaid.gov/sites/default/files/Federal-Policy-Guidance/Downloads/cib051420.pdf.

https://www.medicaid.gov/Federal-Policy-Guidance/Downloads/smd21001.pdf.

https://www.medicaid.gov/medicaid/managed-care/downloads/sdp-4386c-preprint-template.pdf.

Since § 438.6(c) was issued in the 2016 final rule, States have requested approval for an increasing number of SDPs. The scope, size, and complexity of the SDP arrangements submitted by States for approval has also grown steadily and quickly. In calendar year 2017, CMS received 36 preprints for our review and approval from 15 States. In contrast, in calendar year 2021, CMS received 223 preprints from 39 States. For calendar year 2022, CMS received 298 preprints from States. In total, as of December 2022, CMS has reviewed more than 1,100 SDP proposals and approved 993 proposals since the 2016 final rule was issued.

The number of proposals includes initial preprints, renewals and amendments. An individual SDP program could represent multiple SDP proposals as described here (that is, an initial application, 1 renewal, and 3 amendments).

SDPs also represent a notable amount of spending. The Medicaid and CHIP Payment and Access Commission (MACPAC) reported that CMS approved SDP arrangements in 37 States, with spending exceeding more than $25 billion in 2020.

The U.S. Government Accountability Office (GAO) also reported that at least $20 billion has been approved by CMS for preprints with payments to be made on or after July 1, 2021, across 79 approved preprints.

Our internal analysis of all SDPs approved from when § 438.6(c) was issued in the 2016 final rule through March 2022 estimates that the total spending for each SDP approved for the most recent rating period for States is nearly $48 billion

(Federal and State) with at least half being dollars that States are requiring be paid in addition to the rates negotiated between the plans and providers. The aforementioned nearly $48 billion is an annual figure.

Medicaid and CHIP Payment and Access Commission, “Report to Congress on Medicaid and CHIP,” June 2022, available at

https://www.macpac.gov/wp-content/uploads/2022/06/MACPAC_June2022-WEB-Full-Booklet_FINAL-508-1.pdf.

Projected payment amounts are for the most recent rating period, which may differ from calendar year or fiscal year 2020.

U.S. Government Accountability Office, “Medicaid: State Directed Payments in Managed Care,” June 28, 2022, available at

https://www.gao.gov/assets/gao-22-105731.pdf.

This data point is an estimate and reflective of the most recent approval for all unique payment arrangements that have been approved through March 31, 2022 under CMS' standard review process. Rating periods differ by State; some States operating their managed care programs on a calendar year basis while others operate on a State fiscal year basis, which most commonly is July to June. The most recent rating period for which the SDP was approved as of March 2022 also varies based on the review process reflective of States submitting proposals later than recommended (close to or at the end of the rating period), delays in State responses to questions, and/or reviews taking longer due to complicated policy concerns (for example, financing).

As part of the revised preprint form, States are asked to identify if the payment arrangement requires plans to pay an amount in addition to negotiated rates vs. limiting or replacing negotiated rates. Approximately half of the total dollars identified for the SDP actions included were identified by States for payment arrangements that required plans to pay an amount in addition to the rates negotiated between the plan and provider(s) rates.

As the volume of SDP preprint submissions and total dollars flowing through SDPs continues to increase, CMS recognizes the importance of ensuring that SDPs are contributing to Medicaid quality goals and objectives as part of our review process, as well as ensuring that SDPs are developed and implemented with appropriate fiscal and program integrity guardrails. The proposed changes in this notice of proposed rulemaking are intended to ensure the following policy goals:

(1) Medicaid managed care enrollees receive access to high-quality care under SDP payment arrangements;

(2) SDPs are appropriately linked to Medicaid quality goals and objectives for the providers participating in the SDP payment arrangements; and

(3) CMS and States have the appropriate fiscal and program integrity guardrails in place to strengthen the accountability and transparency of SDP payment arrangements.

We are issuing this proposal based on our authority to interpret and implement section 1903(m)(2)(A)(iii) of the Act, which requires contracts between States and MCOs to provide

payment under a risk-based contract for services and associated administrative costs that are actuarially sound and our authority under section 1902(a)(4) of the Act to establish methods of administration for Medicaid that are necessary for the proper and efficient operation of the State plan. As explained in the 2016 final rule, regulation of SDPs is necessary to ensure that Medicaid managed care plans have sufficient discretion to manage the risk of covering the benefits outlined in their contracts, which is integral to ensuring that capitation rates are actuarially sound as defined in § 438.4 (81 FR 27582). We have historically relied on section 1902(a)(4) of the Act to extend the same requirements adopted under section 1903(m)(2)(A)(iii) of the Act for MCOs related to actuarially sound capitation rates to PIHPs and PAHPs. Where a proposal is also based on interpreting and implementing other authority, we note that in the applicable explanation of the proposed policy.

We did not adopt the Medicaid managed care SDP requirements described at § 438.6 in the 2016 final rule for separate CHIPs because there was no statutory requirement to do so and we wished to limit the scope of new regulations and administrative burden on separate CHIP managed care plans. For similar reasons, we are not proposing to adopt the new Medicaid managed care SDP requirements proposed at §§ 438.6 and 438.7 for separate CHIPs.

We are proposing to define State directed payments as a contract arrangement that directs an MCO's, PIHP's, or PAHP's expenditures under paragraphs (c)(1)(i) through (iii) of this section. We are proposing this definition as it is currently used by States and CMS in standard interactions as well as in published guidance to describe these contract requirements. Defining this term also improves the readability of the related regulations. We have also proposed to rename the header for this section to “

State Directed Payments under MCO, PIHP, or PAHP contracts

” reflect this term.

In addition, we are proposing several revisions to § 438.6 to further specify and add to the existing requirements and standards for SDPs. First, we are proposing revisions, including: expanding the scope of § 438.6(c) consistent with recent guidance; exempting SDPs that establish payment rate minimums at 100 percent of the Medicare rate from written prior approval; incorporating SDPs for non-network providers in certain circumstances; setting new procedures and timeframes for the submission of SDPs and related documentation; codifying and further specifying standards and documentation requirements on total payment rates; further specifying and strengthening existing requirements related to financing as well as the connection to the utilization and delivery of services; updating and providing flexibilities for States to pursue VBP through managed care; strengthening evaluation requirements and other areas; and addressing how SDPs are incorporated into capitation rates or reflected in separate payment terms. The proposed regulatory provisions include both new substantive standards and new documentation and contract term requirements. In addition, we are proposing a new appeal process for States that are dissatisfied with CMS's determination related to a specific SDP preprint and new oversight and monitoring standards. In recognition of the scope of changes we are proposing, some of which will require significant time for States to implement, we are proposing a series of applicability dates over a roughly 5-year period for compliance. These applicability dates are discussed later in section I.B.2.p. of this proposed rule.

We solicit feedback on our proposals.

A more detailed outline of the remaining parts of this section is provided below:

b. Contract Requirements Considered to be SDPs (Grey Area Payments)

c. Medicare Exemption, SDP Standards and Prior Approval (§ 438.6(c)(1)(iii)(B), (c)(2), and (c)(5)(iii)(A)(

))

d. Non-Network Providers (§ 438.6(c)(1)(iii))

e. SDP Submission Timeframes (§ 438.6(c)(2)(viii) and (ix))

f. Standard for Total Payment Rates for each SDP, Establishment of Payment Rate Limitations for certain SDPs and Expenditure Limit for All SDPs (§ 438.6(c)(2)(ii)(I) and (c)(2)(iii))

g. Financing (§ 438.6(c)(2)(ii)(G) and (H))

h. Tie to Utilization and Delivery of Services for Fee Schedule Arrangements (§ 438.6(c)(2)(vii))

i. Value-Based Payments and Delivery System Reform Initiatives (§ 438.6(c)(2)(vi))

j. Quality and Evaluation (§ 438.6(c)(2)(ii)(D) and (F), (c)(2)(iv) and (v), and (c)(7))

k. Contract Term Requirements (§ 438.6(c)(5))

l. Including SDPs in Rate Certifications and Separate Payment Terms (§§ 438.6(c)(2)(ii)(J), (c)(6), and 438.7(f))

m. SDPs included through Adjustments to Base Capitation Rates (§ 438.7(c)(4) through (6))

n. Appeals (§ 430.3(d))

o. Reporting Requirements to Support Oversight (§ 438.6(c)(4))

p. Applicability Dates (§ 438.6(c)(4), 438.6(c)(8), and 438.7(g)(2) and (3))

b. Contract Requirements Considered To Be SDPs (Grey Area Payments)

Under § 438.6(c), States are not permitted to direct the expenditures of a Medicaid managed care plan under the contract between the State and the plan unless it is an SDP that complies with § 438.6(c), is permissible in a specific provision under Title XIX, is permissible through an implementing regulation of a Title XIX provision related to payments to providers, or is a permissible pass-through payment that meets requirements in § 438.6(d). States are also not permitted to make payments directly to providers for services covered under the contract between the State and a managed care plan as specified in § 438.60.

In our November 2017 CMCS Informational Bulletin (CIB) entitled “Delivery System and Provider Payment Initiatives under Medicaid Managed Care Contracts,” we noted instances where States may include general contract requirements for provider payments that would not be subject to approval under § 438.6(c) as long as the State was not mandating a specific payment methodology or amounts under the contract.

We also noted that these types of contract requirements would not be pass-through payments subject to the requirements under § 438.6(d), as we believed they maintained a link between payment and the delivery of services. One scenario in the CIB described contract language generally requiring managed care plans to make 20 percent of their provider payments as VBP or alternative payment arrangements when the State does not mandate a specific payment methodology and the managed care plan retains the discretion to negotiate with network providers the specific terms for the amount, timing, and mechanism of such VBP or alternative payment arrangements. We continue to believe that this scenario does not meet the criteria for an SDP nor a pass-through payment but as our thinking has evolved, we believe that the aforementioned VBP scenario represents the State imposing a quality metric on the managed care plans rather than the providers. We believe that this specific

type of contractual condition and measure of plan accountability is permissible, so long as it meets the requirements for an incentive arrangement under § 438.6(b)(2) or, a withhold arrangement under § 438.6(b)(3).

https://www.medicaid.gov/federal-policy-guidance/downloads/cib11022017.pdf.

The other scenario described the State contractually implementing a general requirement for Medicaid managed care p

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