A Look at the Future of Medicaid and Rate Setting

At $531 billion, Medicaid is the second largest piece of healthcare spending and cannot be pushed off to be thought about another day, according to Cindy Mann, JD, CMS deputy administrator and director of the Center for Medicaid and CHIP Services. Furthermore, just 5% of beneficiaries account for 54% of the spending, she said during her session at the America’s Health Insurance Plans’ National Conferences on Medicare and Medicaid and Dual Eligibles Summit in Washington, DC.

taking place September 28 to October 3,

The day before, CMS had released its 2015 Managed Care Rate Setting Consultation Guide for states. According to Ms Mann, CMS worked closely with the industry and the states to create the guide.

“We did very extensive consultation with states that expanded coverage because it was a new population for states for 2014,” she said. “We are taking that show on the road and working with all states for rate setting over the next year.”

The guide was one of CMS’ priorities for managed care as it looked to improve payment and accountability. Another issue taking precedence is making changes to beneficiary protections, including catching up on and implementing some statutory provisions, and modernizing some requirements.

“The rules were last issued in 2002,” Ms Mann said. “A lot has changed in our world since 2002, so we want to be reflective. Managed long-term care, for example, didn’t really exist in 2002.”

Since the states are working with a new population, CMS is looking for more data to increase transparency. Although it may be a larger burden for states and health plans, making data available is necessary in order to get better rates, according to Ms Mann.

“You cannot take a number that is budget-driven and throw it on the dartboard and say ‘that will be my rate,’” she said.

However, she said CMS understands the states are political bodies with constraints and budgets that need to be followed. So the administration is taking a closer look, to the extent of their regulatory authority, to provide clear guidelines.

“We are very, very intent on … making sure that we don’t overprescribe a state’s rate setting process, but be very clear about what is expected in terms of having integrity in the rate setting and assurance that the services being provided are actually being delivered and being delivered in high quality ways,” Ms Mann concluded.