The Association for Community Affiliated Plans (ACAP) thanks you for providing us with an opportunity to comment on the proposed rule “Medicaid and Children’s Health Insurance Program (CHIP) Programs; Medicaid Managed Care, CHIP Delivered in Managed Care, Medicaid and CHIP Comprehensive Quality Strategies, and Revisions Related to Third Party Liability.” This proposed rule was published June 1, 2015 in the Federal Register.

ACAP is an association of 59 nonprofit and community-based Safety Net Health Plans. Our member plans, located in 24 states, provide coverage to more than 15 million individuals enrolled in Medicaid, the Children’s Health Insurance Program (CHIP), Medicare Special Needs Plans for dually-eligible individuals, and Qualified Health Plans (QHPs). ACAP plans currently serve approximately one-third of Medicaid and CHIP enrollees who receive coverage through risk-based managed care, including around one-third of all enrollees in the Medicaid-Medicare demonstrations. ACAP plans are members of their communities, partnering with states to improve the health and well-being of their members who rely upon the Medicaid and CHIP programs.

ACAP’s comments on the proposed rule have been organized by subject area. However, there are several overarching themes for all our comments.

• Transparency and fairness between plans and states in rate setting needs to be required and ensured.

• Network adequacy standards should reflect local conditions as they exist today and not as the state would like them to be.

• Regulations should encourage efficient and realistic use of limited resources. • The fee-for-service program should be held to the same standards as the managed care program.

• The implementation timeframes need to be realistic for both plans and states. • The regulations should not undermine the movement to value-based payment strategies.

• Quality reporting and standards need to be comprehensive, accurate and fair.

In our review of the proposed regulation, ACAP identified the following topline issues of note:

• The Actuarial Soundness regulations need to support both transparency and fairness for CMS, states and plans. ACAP supports efforts made in the regulation to increase transparency in the rate-setting process, but urges CMS also to extend transparency to rate-setting interactions between the states and the plans. We recommend CMS require states to disclose in a timely manner sufficient information to permit plans to replicate the rate-setting methodology and underlying assumptions, and to establish an appeals process for plans related to actuarial soundness.

• A minimum Medical Loss Ratio is not necessary, but if it is implemented it should include an upper limit, be phased in, be 80 percent for CHIP, and MedicareMedicaid plans should be exempted. We also support exempting new plans and new populations from any remittance requirements initially but would support a reporting requirement.

• Risk corridors need to be implemented in a manner that is fair to plans as well as states. Recognizing the importance of plan solvency to Medicaid beneficiary access to and continuity of care, ACAP urges CMS to require all risk corridors to be two-sided so that if a state incorporates risk corridor components in its rate-setting methodology, the risk corridor addresses both upside and downside risk.

• Timelines for implementing the information standards requirements need to be longer and allow time for both states and plans to complete the requirements.

• ACAP commends CMS in its efforts to align appeals and grievance time frames and approaches across government-sponsored health insurance and coverage programs, but believes refinements should be made to a number of areas to ensure efficient timelines and resource utilization.

• We are concerned that the MLTSS disenrollment provision could encourage MLTSS providers to withdraw from an MLTSS network due to a preference for FFS, volume-based payment rates; this provider behavior undermines value-based payment strategies and beneficiary choice.

• ACAP does not oppose the use of time and distance to determine network adequacy standards if:

1. They are set in a realistic and attainable manner and address telemedicine.

2. States are required to give due consideration to any exception request made by a health plan, and

3. States are required to consider the issue of the number of providers practicing in the area and the number enrolled in the Medicaid fee-for-service program both in setting the standards and in granting the exceptions.

• In order to truly foster accuracy, the standards for updating the provider directory must be more realistic and operationally obtainable than that provided for in the proposed rule. • We request an alternative approach to the screen and enroll requirements that would:

1. Grandfather in existing MCO providers, and

2. Allow any new providers subject to health plan credentialing to be tentatively enrolled as network providers while they are going through the state screen and enroll process in order to avoid delays in meeting network adequacy standards and ensuring member access to services.

• Quality reporting and standards need to be comprehensive, accurate and fair. Specifically, we ask that CMS:

1. Modify the proposed Quality Rating System (QRS) so that it applies to all delivery systems including fee-for-service and other emerging delivery systems to ensure a comprehensive approach to quality reporting,

2. Employ stratification based on populations served to ensure a fair and accurate evaluation of quality;

3. Eliminate or reduce the excessive overlap with the existing External Quality Review requirements to promote the efficient use of resources; and

4. Ensure that the health plan costs of seeking and maintaining accreditation are included in the actuarially sound rates and recognized as a quality improvement activity for any required MLR calculation.

• ACAP supports the treatment of IMD services as an in lieu of service as a means to improve access to needed behavioral health services. However, we have concerns with the 15-day per month limit and the refusal to allow states to utilize the IMD rate as a proxy in setting the actuarially sound rate.

Again, we thank you for this opportunity to comment on this important proposed rule. Please feel free to contact me (, 202-204-7509) or Jennifer Babcock, our Vice President for Medicaid Policy (, 202-204-7518) if you would like to discuss any of these issues in greater depth


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