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85% medical-loss ratio in final managed Medicaid rule
Modern Healthcare

The CMS has finalized a long-awaited rule that will overhaul managed Medicaid, which has not been updated in a decade.

The sweeping 1,425-page rule, which was proposed last May, caps insurer profits, requires states to more rigorously supervise the adequacy of plans’ provider networks, encourages states to establish quality rating systems for plans, allows more behavioral healthcare in institutional settings and promotes the growth of managed long-term care. But the CMS deferred to state control for several issues.

States have turned to Medicaid managed-care plans to cut costs and gain more budget predictability. But some charge that leads managed Medicaid insurers to offer inadequate provider networks and deny needed care to pad their bottom lines. Connecticut has actually reverted back to traditional fee-for-service Medicaid, saying it abandoned the managed-care version because it did not save money or improve care.