CMS Releases Final Medicaid Rule Addressing Supplemental Payments in Managed Care

On Monday, the Centers for Medicare and Medicaid Services (CMS) released its anticipated final rule on Medicaid managed care to be published in the Federal Register on May 6, 2016.  Among other important updates, the new regulations address policy standards regarding a state’s ability to direct Medicaid managed care payments by codifying a phase-out approach to a state’s use of “pass-through” payments as defined in the rule.  Section 438.6(d) of the regulation sets forth different time frames for transitioning pass-through payments for specified providers to align with the primary provider types that typically receive upper payment limit (UPL) payments or supplemental payments under state plan authority.  To that end, the rule implements a 10-year transition period for hospitals and 5-year transition period for physicians and nursing homes.  The outlined time frames are incorporated into the rule to allow for the phasing-out of a state’s ability to make pass-through payments under MCO contracts starting on or after July 1, 2017.

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          Author:   W. Scott Keaty and  Joshua G. McDiarmid
          Practice Area:   Health Care Law
          Date:   April 27, 2016

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