Tag Archives: Mega Reg rule

Webinar: Medicaid mega rule stresses actuarial soundness in the development of capitation rates

Join Milliman’s Brad Armstrong, Christopher Pettit, and Marlene Howard as they discuss implications of the final rule on the development of actuarially sound capitation rates and required supporting documentation. With its publication of the final Medicaid managed care rule (final rule), the Centers for Medicare and Medicaid Services underscored the importance of actuarial soundness in the capitation rate development process.

This webinar will take place on Tuesday, November 1, at 12 p.m. EST/9 a.m. PST. Webinar topics include:

• Action items for states and their actuaries
• Areas where the new rule may present challenges in the certification of rates

To register, click here.

For more perspective on this topic, read the article “Overview of guidance related to actuarial soundness in final Medicaid managed care regulations.”

“Mega Reg” rule stresses actuarial soundness in the development of capitation rates

With its publication of the final Medicaid managed care rule (final rule), the Centers for Medicare and Medicaid Services underscored the importance of actuarial soundness in the capitation rate development process. In this paper, Milliman’s Brad Armstrong, Christopher Pettit, and Marlene Howard summarize the implications that the final rule has on the development of actuarially sound capitation rates and required supporting documentation. The authors also discuss action items for states and their actuaries along with some areas where the new rule may present challenges in the certification of the rates.

“Mega Reg” rule mandates MLRs for Medicaid managed care programs

The Medicaid “Mega Reg” final rule now makes medical loss ratios (MLRs) a requirement for Medicaid managed care programs in every state. While the Medicaid MLR formula largely follows the commercial and Medicare Advantage formula, there are some key differences between the three. In this report, Milliman consultants discuss several issues that state agencies and managed care organizations need to consider in the development and completion of MLR reporting.

Webinar: Medical loss ratios in the Medicaid mega reg

Medical loss ratios (MLRs) will become a required part of financial reporting and prospective rate setting for Medicaid managed care programs in every state, effective for managed care contracts beginning on or after July 1, 2017. The creation of minimum MLR standards for Medicaid managed care follows the precedents set by the commercial health insurance market in 2011 and the Medicare Advantage (MA) market in 2014.

Join Milliman’s Ian McCulla, Scott Jones, and Jill Brostowitz for the webinar “Medical loss ratios in the Medicaid mega reg” on Friday, June 24, at 12 p.m. EST. They will discuss the release of the final Medicaid and Children’s Health Insurance Program (CHIP) managed care rule (final rule). To register, click here.

Encounter data standards: Implications for state Medicaid agencies and managed care entities from final Medicaid managed care rule

In this article, Milliman consultants Jeremy Cunningham, Maureen Tressel Lewis, and Paul Houchens summarize new regulatory requirements for Medicaid encounter data from the final managed care rule. The authors also identify best practices for state Medicaid agencies and managed care entities in the development and submission of encounter data. Additionally, they discuss how improvements to the quality of Medicaid managed care encounter data may change the industry.

Institution for Mental Disease (IMD) as an “in lieu of” service

Federal financial participation (FFP) is not available for Medicaid services for individuals between the ages of 21 and 64 who are patients in an Institution for Mental Disease (IMD). This IMD exclusion is a long-standing component of Title XIX (Grants to States for Medical Assistance Programs) of the Social Security Act (Title XIX), which has recently come under scrutiny because of the combination of inpatient psychiatric capacity constraints and rapid enrollment growth of the Medicaid population.

The final Medicaid managed care regulations clarify the use of IMDs as an “in lieu of” service. In the near term, states will need to carefully weigh their options based on their specific needs for inpatient psychiatric and subacute psychiatric capacity. The risk is that adding too much inpatient capacity could induce utilization and drive members away from community-based alternatives. The managed care rule also contains some rate-setting differences for IMDs as an “in lieu of” service. Beyond the impact of the final rule, IMDs will continue to be a topic of interest to state policy makers as they bolster the continuum of behavioral health and substance use disorder services.

The Centers for Medicare and Medicaid Services (CMS) has had a policy in place since Medicaid began that does not provide FFP for any services for a member between the ages of 21 and 64 either inside or outside an IMD while that member is a patient in an IMD. This law, generally termed the “IMD exclusion,” has evolved over time but has largely remained unchanged. Outside of this age band, full FFP is provided as long as the service is included in the state plan for the over-65 population. The under-21 population is covered as an Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) service at the state’s regular match rate. The IMD exclusion applies to fee-for-service and managed care delivery systems.

This setting exclusion is defined in the Medicaid statute under 1905(a)(29). When Title XIX was passed by Congress in 1965, the treatment of mental illness was primarily performed in an institutional setting. States built and operated large mental institutions to house and feed people with mental illness. The IMD exclusion was included to ensure states would continue to be responsible for the costs of those large hospitals. Over time, a few limited mechanisms have been developed to pull down FFP for IMD utilization within the exclusion age corridor of 21 to 64 years of age. In some cases, states may have already utilized IMDs as an “in lieu of” service. Milliman’s Mat DeLillo provides  more perspective in this article.