Becker's Hospital Review

20 Financial Management C MS unveiled a regulatory package in late May that contained the first major update to Medicaid managed care regulations in more than 10 years. Medicaid managed care, which is aimed at controlling healthcare cost, utili- zation and quality, has evolved into the dominant delivery system in Medic- aid, with more than 42 million Americans enrolled in some form of Medicaid managed care, according to a Kaiser Family Foundation report. The regulations governing Medicaid managed care were last updated in 2002 and 2003, and the proposed rule CMS released seeks to "modernize" the sys- tem. The proposed rule updates regulations "to reflect the changes in deliv- ery systems, strengthen the system's ability to serve diverse populations, and promote greater alignment of Medicaid managed care policies with those of other payers," according to CMS. Here are 10 key points from the proposed rule. 1. The nearly 700-page proposed rule aims to improve the beneficiary experience by improving the enrollment process, the communication they receive from the state and managed care plans and care coordina- tion once enrolled. 2. The proposed rule would improve care coordination by making a number of changes, including strengthening the role of assigned care coordinators and requiring transition of care standards for all Medicaid beneficiaries transitioning from one delivery system to another within Medicaid. 3. The proposed rule also includes provisions for continuity of care be- tween Medicaid and Medicare. "By aligning standards, where appro- priate, the proposed rule would improve operational efficiencies for states and health plans, which in turn will improve the experience of care for individuals who transition between healthcare coverage op- tions," according to CMS. 4. John Gorman, founder and executive chairman of the Gorman Health Group consulting firm, told Bloomberg the proposed rule is really an "omnibus rule" since it touches both Medicaid and Medicare. 5. The proposed rule incorporates the medical loss ratio — a financial measurement that sets the minimum amount of premium dollars health plans must spend on actual healthcare costs. The goal of the measurement is to cut overhead spending by insurers. The Patient Protection and Affordable Care Act includes standards for a minimum MLR in the private health insurance and Medicare Advantage markets. 6. The proposed rule would set the MLR at 85 percent, meaning 85 cents out of every premium dollar would be used to on actual healthcare costs. 7. Regarding the ratio, Jeff Meyers, president and CEO of Medicaid Health Plans, told The Hill he "strongly encouraged CMS not to go down this route" because every state already uses some form of the MLR, and the proposed rule could "destabilize the programs that are developed on a state level." 8. The rule aims to improve the availability and accessibility of covered services, including minimum time and distance standards to behav- ioral health providers, dentists and OB-GYNs. 9. The proposed rule calls for establishing a Medicaid managed care quality rating system that would include performance information on all health plans and align with the existing rating systems used in Medicare Advantage and the PPACA marketplace. 10. CMS is accepting comments on the proposed rule until July 27. n CMS Unveils Overhaul to Medicaid Managed Care: 10 Key Points By Ayla Ellison Nonprofit Hospitals Begin to See Financial Improvement By Ayla Ellison R evenue growth and declining annual expense growth are helping paint a better financial picture for nonprofit hospi- tals, according to preliminary fiscal year 2014 medians for nonprofit and public hospitals from Moody's Investors Service. Annual median revenue growth for nonprofit hospitals hit an all-time low in 2013 at 3.9 percent. Moody's preliminary numbers are showing some improvement in that area with annual median revenue growth increasing to 4.7 percent in fiscal 2014. The revenue growth is attribut- able to a number of factors, including continued consolidation in the nonprofit sector and the initial influence of Medicaid expansion being realized, according to Moody's. The preliminary medians also show the trend of declining annual ex- pense growth at nonprofit hospitals is continuing. In fiscal 2012, an- nual expense growth was 5.5 percent, and that number fell to 5 percent in FY 2013. In 2014, annual expense growth fell again to 4.6 percent. The ongoing shift of patient care to lower cost settings contributed to the expense growth slowdown, according to Moody's. The preliminary medians are based on fiscal 2014 audited financial statements for 48 percent of Moody's-rated portfolio. More hospitals will be included in Moody's final report, which will be issued later this year, and the rating agency expects final medians to show weaker oper- ating performance than the preliminary medians. n BECKER'S HOSPITAL REVIEW CEO ROUNDTABLE + CFO/CIO ROUNDTABLE Register at www.beckershospitalreview.com 44 CEO SPEAKERS • 33 CFO & CIO SPEAKERS • 99 HOSPITAL SYSTEM SPEAKERS KEYNOTES BY CLEVELAND CLINIC CEO DR. TOBY COSGROVE & ASCENSION CEO DR. ANTHONY TERSIGNI

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