Manatt on Health: Medicaid Edition

Transparency and Decision Support for Medicaid Managed Care Consumers

By Chiquita Brooks-LaSure, Managing Director | Alice J. Lam, Director

Editor's Note: This "Manatt on Medicaid" is the eighth in a series of updates focused on CMS's new Medicaid/CHIP managed care regulations. In the coming weeks, Manatt will be exploring key provisions of the regulations and highlighting their implications.


Today three-quarters of the over 60 million Americans enrolled in Medicaid will access some or all of their coverage through managed care. With more states turning to managed care to cover broader benefits and more complex populations as well as expanding Medicaid eligibility under the Affordable Care Act (ACA), many consumers may find themselves enrolled in Medicaid or accessing benefits through a managed care delivery system for the first time. In addition, the new coverage continuum of Medicaid, the Children's Health Insurance Program, Marketplaces, employer-sponsored coverage, and Medicare results in more options but also the potential for more transitions, placing a premium on coordination to ensure continuity of care. With differences in coverage eligibility rules and income thresholds, members of the same household may also find themselves enrolled in different coverage programs. For all of these reasons, support tools for individuals and families are more important than ever to understand plan options, services covered and limitations, and to choose providers.

From helping consumers' understanding of coverage features and plan options to use of benefits, The Centers for Medicare and Medicaid Services' (CMS's) Medicaid managed care regulations released on April 25, 2016 are geared toward improving transparency and supporting informed decision-making by Medicaid beneficiaries in this new environment. In this issue, Manatt highlights provisions key to improving consumer transparency as well as implications for consumers, plans and states.

Consumer Information and Decision Support. The final rule strengthens requirements for supporting consumers both prior to and after managed care enrollment and in understanding their plan choices and coverage. CMS formalizes and standardizes the consumer supports available to Medicaid managed care applicants and enrollees to select plans and use their coverage.1 CMS also enhances the accessibility of consumer information. The final rule reinforces existing requirements that materials be available in alternative languages and formats for people with limited English proficiency and with disabilities.

Notably, the final rule moves toward electronic access of information, requiring that provider directories be available on plan websites and allowing for enrollee handbooks and formularies to be distributed electronically. Online access is likely a welcome modernization and administrative relief for plans and states. Consumers will also benefit from quicker access to and more timely updates of information. When posted on plan websites, provider directories and formularies must be available in a machine-readable format, which enables third parties to aggregate this information and potentially design tools for consumers to compare plan features.

The content and format for enrollee handbooks are also better aligned with standards for private market summary of benefits and coverage. This consistency could help improve navigability for consumers moving between private insurance and Medicaid as well as simplify administration for plans.

Quality Rating System. The final rule requires states to adopt either a CMS-developed quality rating system or an alternative quality rating system that is substantially comparable to the CMS-developed system. The quality measures will fall into three categories that are aligned with those for Marketplace plans: clinical quality management, member experience and plan efficiency, and affordability. CMS will determine measures through a public process with comment; states may add more measures. CMS will also establish the quality rating methodology, but states can adopt an alternative methodology. States are expected to post quality ratings online. Plans will not begin reporting on these measures until three years after CMS establishes them in guidance. CMS anticipates a final regulation on the quality rating system in 2018, which means that ratings will not be in place before 2021.

The five-star rating system in Medicare influences both payment to plans and beneficiary choices. Federal payments to Medicare Advantage (MA) plans are in part based on the number of stars that the plan receives, with higher-rating plans receiving bonuses. A study published in the Journal of the American Medical Association in August 2015 found that for both new Medicare enrollees and those switching plans, the higher the star rating, the more likely they were to enroll.2

Marketplace plans are just beginning to move to a five-star system, as plans needed time to enroll the Marketplace population and collect data for the star ratings. CMS is unveiling the five-star system for plans in five states in the Federally-Facilitated Marketplace: Michigan, Ohio, Pennsylvania, Virginia, and Wisconsin for 2017 open enrollment. State-Based Marketplaces (SBMs) are permitted flexibility to make their own decisions about whether to start displaying quality ratings. CMS originally proposed that all plans would have star ratings during this upcoming open enrollment, so this pilot is a change, but may provide more time for testing before broader implementation. Given the influence that star ratings have on reimbursement and consumer decisions in Medicare, officials are likely proceeding cautiously with quality ratings in Marketplace and Medicaid coverage.


Through enhanced and new resources supporting consumer decision-making and more consistency in information standards and presentation across Medicaid, Marketplace and Medicare coverage, the final rule is designed to facilitate transparency and navigability in Medicaid managed care coverage. The Medicaid program has traditionally placed a priority on consumer assistance in recognition of the vulnerable populations it serves; however, the final rule further amplifies and modernizes consumer decision support requirements.

Across coverage types, CMS is responding to the overall push to improve information provided to consumers. and SBM websites are making progress in response to stakeholder demands for more accessible and better-quality information, particularly around provider participation, coverage and quality. The Medicaid managed care final rule pushes states and plans to do the same—make information more available and accessible for consumers to enable meaningful comparisons and decisions on their health coverage. Given the millions more Medicaid beneficiaries compared to the enrollment in Marketplaces, these changes could mean more widespread impact if they lead to the adoption of consumer tools and a more informed healthcare consumer.

1These "beneficiary support system" requirements were covered in-depth in the "Manatt on Medicaid" published May 20, 2016. See

2Rachel O. Reid, Partha Deb, Benjamin Howell, William H. Shrank, "Association Between Medicare Advantage Plan Star Ratings and Enrollment," Journal of the American Medical Association, January 16, 2013, pp. 267-274. Accessed August 12, 2015. Available at



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