The CMS has released a sweeping proposed rule (PDF) intended to modernize the regulation of Medicaid managed-care plans. The Medicaid managed-care population is growing rapidly, but the last regulation governing such plans was issued in 2002.
In one provision that generated frustration among health insurers in the hours after the draft was posted, the CMS called for health plans to dedicate a minimum portion of the rates they receive toward medical services, a threshold known as a medical loss ratio.
As of 2015, plans doing business with Medicaid and the Children’s Health Insurance Program are the only health plans that aren’t subject to an MLR. The Obama administration is proposing an 85% threshold for Medicaid managed-care plans, the same as the government demands of large group plans in the private market.
– Modern Healthcare