ACAP Sign-on Letter on Actuarial Soundness, Rates, and the Forthcoming Medicaid Managed Care Proposed Rule

August 6, 2018

The Honorable Seema Verma
Centers for Medicare & Medicaid Services
200 Independence Avenue, S.W.
Washington, DC 20201

RE: Forthcoming Medicaid Managed Care Proposed Rule

Dear Administrator Verma:

We are writing to share recommendations for inclusion in the Medicaid managed care proposed rule that is in development at the agency. The recommendations are focused on rate setting, actuarial soundness, and the minimum medical loss ratio (MLR). As CMS is preparing the Medicaid managed care proposed rule, we would appreciate consideration of these recommendations.

1. Standardize Medicaid Rate Review Process and Timeline
States face a variety of challenges in developing and submitting Medicaid rates to CMS for review on a fixed timeframe, sometimes approving rates after the start of a rating period. As a result, we believe the Medicaid program as a whole would benefit from a sustained emphasis and steady progress toward prospective review and approval of rates in advance of the payment year, culminating in a far more standardized process (e.g., similar to Medicare Advantage).

We are appreciative of states’ efforts to submit rate information to CMS for review on a timely basis. We also recognize that CMS is moving towards accountability and transparency by releasing a Medicaid Scorecard with information on states’ managed care rate submissions. While this is a good first step towards accountability and transparency, we are eager to see continued improvement in this area. For example, the Scorecard indicates that only 38% of base rate certifications were submitted before contracts began. Timeliness and process improvements are pivotal to ensure access to care for Medicaid beneficiaries and stability of state Medicaid managed care programs. Further, timeliness and process improvements support CMS’ shift to focus on outcomes.

We welcome discussions around standardizing the rate review process and timeframe for Medicaid and look forward to your continued effort to promote state and federal accountability and transparency in the CMS rate review process.

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