Editor's Note: This "Manatt on Medicaid" is the ninth and final update in a series focused on CMS's new Medicaid/CHIP managed care regulations. The full series may be accessed here.



On April 25, 2016, the Centers for Medicare and Medicaid Services (CMS) released its final rule to overhaul the regulations governing Medicaid managed care (MMC). MMC has evolved significantly since the rules were last updated in 2002. Today, nearly three-quarters of all Medicaid beneficiaries are enrolled in managed care programs, and a growing number of states are covering complex populations and long-term services and supports (LTSS) through managed care. In 2015, 22 states operated managed LTSS (MLTSS) programs, up from 6 states in 2009, and 11 additional states were planning to implement a program.1 Acknowledging this growing trend, the new regulations explicitly reference MLTSS for the first time. While the regulation generally applies to all MMC entities, including those covering LTSS, the regulation also contains specific provisions uniquely applicable to LTSS.

Elements of High-Performing MLTSS Programs

In 2013, CMS described ten elements of high-performing MLTSS programs that reflect the person-centered care and independent living philosophies fundamental to people who use LTSS and inherent in the Americans with Disabilities Act (ADA).2 Reinforcing its earlier guidance, CMS incorporates these vital elements into the final rule.

1. Adequate Planning

States will be required to monitor all aspects of plan performance, including the delivery of LTSS, and to use LTSS data collected as part of this process to improve plan performance. States must conduct readiness reviews of MLTSS plans' ability and capacity in several areas, such as service delivery, care management, and service planning, and are required to report on LTSS program elements in a newly required annual Managed Care Program Report.3

2. Stakeholder Engagement

CMS creates LTSS stakeholder engagement requirements for both the state and MLTSS plans. States must ensure meaningful stakeholder engagement from beneficiaries, their representatives, providers, and others in the design, implementation, and oversight of MLTSS programs.4 MLTSS plans must create a Member Advisory committee, the members of which must reasonably represent the populations covered by the MLTSS plan.5

3. Enhanced Provision of Home and Community-Based Services (HCBS)

The final rule requires contracts with plans that cover HCBS to require that such services be delivered in settings consistent with CMS's 2014 Medicaid HCBS rule, which defines in detail the settings in which HCBS can be provided and reimbursed by Medicaid.6

4. Alignment of Payment Structures and Goals

States will be required to submit an annual Managed Care Program Report that includes information on plan financial performance and other plan activities, as well as MLTSS program elements not otherwise addressed by the other requirements.

5. Support for Beneficiaries

The rule requires states to develop a Beneficiary Support System (BSS) to support all managed care enrollees before and after managed care enrollment, with additional specific requirements and functions for MLTSS enrollees.7 States must perform outreach to all beneficiaries and their authorized representatives, ensure accessibility to BSS services, and provide independent and conflict-free choice counseling.8 With respect to MLTSS, the BSS must also, at a minimum, 1) serve as an access point for complaints and concerns about enrollment and access to covered services; 2) educate enrollees on their grievance and appeals rights and the state fair hearing process; 3) upon request, assist enrollees in navigating the plan's grievance and appeals process; and 4) review LTSS program data and provide guidance to the state on identification, remediation, and resolution of systemic issues. States may build off of existing support systems in developing the BSS, and expenditures for the BSS are eligible for federal matching funds.

Finally, states must allow disenrollment from a managed care entity at any time "for cause," and the rule creates a new "for cause" disenrollment reason for LTSS users who have to change their residential, institutional, or employment supports provider based on a change in the provider's status from in-network to out-of-network, resulting in a disruption in residence or employment.9

6. Person-Centered Processes and 7. Comprehensive, Integrated Service Package

While the new rule requires MMC entities to ensure all enrollees have an ongoing source of care and designate a person or entity to coordinate care between medical, community, and social support providers, additional requirements are specified for those with special healthcare needs or who need LTSS.10, 11 Specifically, the state must implement a plan to identify enrollees with such needs and document the mechanisms for doing so in a newly required state managed care quality strategy. Plans must comprehensively assess identified enrollees' care needs, using appropriate providers or individuals meeting LTSS service coordination requirements of the state or plan, to identify any ongoing special conditions that require a course of treatment or regular care monitoring. Finally, the plans must develop a person-centered treatment or service plan for enrollees who require LTSS.12

8. Qualified Providers

The new rule establishes specific network adequacy standards for LTSS providers, which include time and distance standards for enrollees traveling to providers to receive services and alternative standards for providers traveling to enrollees to deliver services.13 In developing the alternative standards, states can consider an enrollee's choice of provider, strategies that would support community integration, and other considerations that are in the best interest of the enrollee that needs LTSS. The rule also contains standards around accessibility and availability of LTSS services for enrollees with physical or mental disabilities, LTSS service capacity, and LTSS provider credentialing and re-credentialing.14

9. Participant Protections and 10. Quality

CMS outlines a number of new protections and quality requirements specific to LTSS.15 First, each MMC entity will be required to implement an ongoing comprehensive quality assessment and performance improvement program (PIP) that includes measures relating to quality of life, rebalancing, and community integration activities for individuals receiving LTSS. Second, MLTSS PIPs must 1) have mechanisms to assess the quality and appropriateness of care furnished to enrollees using LTSS, including during care transitions and as measured against those services in their care plans, and 2) participate in state efforts to prevent, detect, and remediate critical incidents. Third, the state must review the results of any plan efforts to support community integration for enrollees using LTSS at least annually. Finally, states will be required to create a written managed care quality strategy for assessing and improving the quality of healthcare and services furnished by the MMC entity, which must contain MLTSS-specific quality considerations.16


The new LTSS provisions in the MMC rule enhance MLTSS programs by requiring significant transparency in LTSS-related information, stakeholder input on program design and implementation, and special beneficiary supports and protections. As more states move complex populations and LTSS into managed care arrangements, these protections will help enrollees navigate a complex system, understand and exercise their rights and responsibilities, and access critical services and supports. CMS also offers new protections for LTSS providers as they increasingly transition from a fee-for-service to a managed care system and maintains significant flexibility for states and MMC entities to design, implement, operate, and monitor MLTSS programs as they seek to coordinate comprehensive and cost-effective services for the Medicaid population.