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Frequently Asked Questions

Frequently Asked Questions are used to provide additional information and/or statutory guidance not found in State Medicaid Director Letters, State Health Official Letters, or CMCS Informational Bulletins. The different sets of FAQs as originally released can be accessed below.Frequently Asked Questions are used to provide additional information and/or statutory guidance not found in State Medicaid Director Letters, State Health Official Letters, or CMCS Informational Bulletins. The different sets of FAQs as originally released can be accessed below.

FAQ Library

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Care managers often do not document data elements in the assessment and care plan measures unless the member has "a problem." For example, they may not document that they assessed the member's vision or need for an assistive device if no problem was identified. How can states or plans address this issue?

Managed Long Term Services and Supports (MLTSS) plan managers should provide training on proper documentation practices to care managers and other delegated staff. States and MLTSS plans could consider including data field entry options to remind care managers to record all results of the assessment, even if findings are negative, that is, the member does not have a problem or need assistance or services. For example, states and plans could include a question in the member’s record that requires the care manager to document both whether an assessment was performed and whether a problem was identified, along with another required field to include the details of the problem if there was a problem identified.

FAQ ID:89046

Please clarify that state flexibility to reimburse in the aggregate extends to reimbursement rates for I/T/U pharmacies and FSS drugs, and that states can establish rates that are based on a variety of data sources, which may include FSS prices, national and State price surveys, AMP data, and other price benchmarks.

The new AAC requirements were designed to more accurately reflect the pharmacy providers' actual prices paid to acquire drugs and the professional services required to fill a prescription. We agree that each state is able to establish rates that satisfy (or are consistent with) AAC and may be based on a variety of data sources, which may include FSS prices, and other pricing benchmarks.

FAQ ID:95111

Will states need to modify already approved contracts to add the final capitation rates to the contract to comply with section 438.3(c), which requires that the payment term be included in the contract?

Yes. We remind states that the requirement that the final capitation rate be specified in the contract is not a new requirement, see section 438.6(c)(2)(ii) of the 2002 final rule. The amount of payment for performance-in this context, the final capitation rate-is a primary component of any contract and must be included for purposes of verifying claims for Federal Financial Participation (FFP) on the CMS-64. In the Final Rule at page 27595, in the context of risk adjustment, CMS suggested that the payment terms under the contract could be identified in an appendix, or additional supporting documentation, to the contract for ease of updating the information when risk adjustment is applied. The state must submit a formal contract amendment when the final capitation rates differ from the payment terms in an approved contract.

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FAQ ID:93171

A number of provisions in the Final Rule were not subject to substantive changes but were redesignated in a new section in 42 CFR part 438 and have an implementation date of July 5, 2016. Will states be required to amend regulatory citations in approved contracts or contracts currently under CMS review?

CMS understands that many managed care contracts include a general provision that incorporates changes in federal law during the course of the contract term. Amendments to approved contracts, or contracts under CMS review, for the purpose of updating regulatory citations is not necessary. However, the citations will need to be updated for the next contract year. Outdated regulatory citations in contracts without such a general provision will need to be updated for the next contract year.

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FAQ ID:93426

Do all states need to submit contracts and rate certifications to CMS 90 days prior to the effective date of the contract pursuant to section 438.3(a)?

No. If a state does not have a state law or policy that requires CMS approval of the contract and capitation rates prior to the effective date of the contract, the 90 day timeframe is not applicable. However, as a general matter, states should submit the contracts and rates 90 days prior to the start of the contract term. CMS intends to provide future guidance on the prior approval requirements as a condition of claiming FFP in section 438.806, which are distinct from the requirements at section 438.3(a).

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FAQ ID:93431

It appears that section 438.210(a)(2), which addresses the amount, duration, and scope of Early and Periodic Screening, Diagnostic, and Treatment services (EPSDT) under managed care, incorrectly cross-references "subpart B of part 440" rather than "subpart B of part 441." In addition, the Omnibus Budget Reconciliation Act of 1989 broadened the statutory requirements for EPSDT beyond those reflected in 42 CFR part 441. Please clarify how this error will be addressed.

There is a technical error in section 438.210(a)(2) as the cross-reference should have incorporated subpart B of part 441 rather than subpart B of part 440. All Medicaid beneficiaries under age 21 are entitled to EPSDT services, whether they are enrolled in a managed care plan or they are in fee-for-service. Under section 1905(r) of the Social Security Act (the Act), EPSDT services must include ""[s]uch other necessary health care, diagnostic services, treatment, and other measures described in section 1905(a) to correct or ameliorate defects and physical and mental illness and conditions discovered by the screening services, whether or not such services are covered under the State plan."" CMS intends to issue a regulatory correction to address this error. We also want to remind readers that sections 1902(a)(43) and 1905(r)(5) of the Act are applicable to the provision of EPSDT, despite not being expressly incorporated in part 441. Detailed guidance on EPSDT can be found in ""EPSDT"" A Guide for States: Coverage in the Medicaid benefit for Children and Adolescents, June 2014, available at https://www.medicaid.gov/medicaid/benefits/downloads/epsdt_coverage_guide.pdf (PDF, 613.1 KB).

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FAQ ID:93436

Does the requirement in section 438.4(b)(5) that payments from any rate cell must not cross-subsidize or be cross-subsidized by payments for any other rate cell mean that the actuary must use assumptions that are unique to each rate cell?

No. CMS addressed this provision at page 27569 of the Final Rule. Section 438.4(b)(5) does not require there to be different assumptions (such as trend or age, gender, or regional rating) for each rate cell and does not prevent the use of the same assumptions across more than one rate cell. The prohibition on cross-subsidization among rate cells under the contact is to ensure prudent fiscal management and that the capitation rate for each rate cell is independently actuarially sound.

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FAQ ID:93441

Are managed care plans permitted to maintain more than one level of appeal?

No. For the rating periods for contracts starting on or after July 1, 2017, managed care plans may not maintain more than one level of appeal. Section 438.402(b) requires that MCOs, PIHPs, and PAHPs ""may have only one level of appeal for enrollees."" Note that states may modify managed care contracts to require managed care plans to provide one level of internal appeal in advance of the rating period for contracts starting on or after July 1, 2017, as subpart F in the 2002 final rule permitted states flexibility as to the number of internal appeals. Please see page 27509 of the Final Rule for additional explanatory information.

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FAQ ID:93446

Can states elect to permit enrollees to request a State fair hearing without first exhausting the managed care plan's appeal process?

No, not for the rating period for contracts starting on or after July 1, 2017. Section 438.402(c)(1)(i) requires that the enrollee exhaust the internal level of appeal before requesting a State fair hearing. Note that if the MCO, PIHP, or PAHP fails to adhere to the notice and timing requirements in section 438.408, section 438.402(c)(1)(i)(A) provides that the enrollee is deemed to have exhausted the internal level of appeal and may request a State fair hearing. States may modify managed care contracts to require exhaustion of the internal level of appeal in advance of the rating period for contracts starting on or after July 1, 2017, as subpart F in the 2002 final rule permitted states flexibility to determine whether exhaustion would be required. Please see page 27509 of the Final Rule for additional explanatory information.

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FAQ ID:93451

The Final Rule at section 438.2 defines a rating period as the 12 month period for which actuarially sound capitation rates are set, but there may be legitimate reasons why a state may want to set capitation rates for a time period that is less than or greater than 12 months. Will states have any flexibility in this area?

Yes. CMS acknowledges that states may have legitimate reasons to set capitation rates for a time period that differs from 12 months and will take unusual circumstances into account when reviewing compliance with the rating period duration requirements. CMS will approve a rating period other than of 12 months when a state transitions the contract term and rating period from a calendar year to a state fiscal year basis and setting capitation rates for a 6 month or 18 month period would facilitate that transition. There may be other reasonable justifications for such variations in the rating period that CMS would be open to considering. The rationale for a rating period that differs from 12 months as defined in the regulation in section 438.2 should be specified in the rate certification required in section 438.7 for such consideration.

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FAQ ID:93456

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