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Medical Loss Ratio Data for Medicaid Managed Care Programs
NAHC Report
On Friday, November 1, 2024, the Center for Medicare & Medicaid Services (CMS) released public information on medical loss ratio (MLR) data for Medicaid managed care programs. MLR is a calculation used to measure revenue received by a health plan that was used to pay for services and for quality improvement activities. Medicaid law and statute do not require states to establish a mandatory minimum MLR for managed care organizations; however, guidance on setting the payment rates (i.e. “capitation” amounts) directs actuaries to target no less than 85%, provided that the rates account for reasonable non-benefit related costs. The November data includes MLR information from plan years 2018, 2019, and 2020.
The Alliance analyzed the MLR information to better understand health plan payment policy around the country. As part of the analysis, the Alliance filtered data to include only those plans that include long-term services and supports (LTSS), as these are the services most important to our members. Overall, the national average MLRs for managed LTSS plans (MLTSS) were 93.70% in 2018; 93.54% in 2019 and 91.85% in 2020.
To develop statewide MLR estimates, we aggregated the reported MLR expenditure data for each plan in every state during a specific plan year. Then, we performed standard MLR calculation on the CMS-reported numerator and denominators to develop statewide MLR figures for MLTSS plans. The resulting state-specific MLRs varied across the country and within each plan year. Idaho (2018) had the overall minimum statewide MLR at 85.31% whereas Iowa (2018) had the highest overall statewide MLTSS MLR at 102.87%.
CMS’ data also includes health plan-specific MLR information. The highest reported MLR during the time period was Blue Cross of Idaho’s Medicare/Medicaid Dual Eligible plan in 2019, with a reported 180%. In contrast, the lowest reported MLR was in 2018, when New York’s Prime Health Choice, LLC MLTSS plan experienced a 78% MLR.
In comparison, aggregate Medicaid MLRs for all health plans were also high and above 90% but, on average, were slightly lower than the MLTSS-specific MLRs for the same plan year. In 2018, overall Medicaid MLR was 92.61; in 2019 it was 92.90%; and in 2020 it was 90.99%.
The MLRs in Medicaid are relatively high – and exceed the 85% standard established by the Affordable Care Act for large group plans – which could lead to future rate challenges for providers as plans may be less likely to negotiate inflationary update. However, it is important to remember that the actuarial soundness requirements in Medicaid mandate that state rate-setting account for all health care service and non-service components, especially if the MLR exceeds 85%. As data from subsequent years becomes available, it is likely that it will remain consistent due to higher provider payments reflected via higher capitation rates.
As CMS seeks to expand transparency regarding MLRs, payments, access to care, and other core components of Medicaid program information, we anticipate that there will be additional information available that will help providers understand the financial dynamics within the various states and health plans around the country. This information can hopefully be useful with legislative advocacy as well as rate negotiations with state agencies and health plans. The Alliance has established a database of MLTSS MLR information that we will continue to build upon as more becomes available. Any requests for additional analysis or specific information can be sent to [email protected]. |
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HCAOA Throws Weight Behind Legislation That Would ‘Redefine’ Private Duty Nursing Services
Home Health Care News / By Joyce Famakinwa
The Home Care Association of America (HCAOA) is backing home care-focused legislation introduced by Vice President-elect J.D. Vance (R-OH) and Senator Maggie Hassan (D-NH).
The Continuous Skilled Nursing Quality Improvement Act (S.4122) was introduced back in April, and would redefine “private duty nursing services” as “continuous skilled nursing services.” It would also require the Secretary of Health and Human Services to move to establish national quality standards of care for these services.
“The care provided by continuous skilled nursing allows patients to remain at home while getting the care they need,” Hassan said in an April press release. “Medicaid standards should reflect the unique work of nurses who provide complex one-on-one care to individuals at home. I am glad to support this bipartisan legislation that can help us better understand and evaluate the vital work of skilled nurses who help individuals with disabilities thrive at home.”
The Continuous Skilled Nursing Quality Improvement Act would also position states to track more meaningful data to help improve the quality of care.
Specifically, this legislation addresses continuous skilled nursing services under Medicaid. HCAOA believes that the bill is a step in the right direction.
“By establishing national quality standards, this legislation promotes consistency and accountability across providers, which is critical for enhancing patient outcomes,” Eric M. Reinarman, vice president of government relations, told HHCN in an email.
“We see this as a positive development for the broader home care industry and are encouraged by the bill’s focus on quality improvement.”
Read Full Article |
Medicaid ‘At Risk’ Under Incoming Administration, According To CMS Leader
Home Health Care News / By Audrie Martin
The Medicaid program could face significant challenges under the Trump administration, according to Dan Tsai, the deputy administrator and director of the Center for Medicaid and Children’s Health Insurance Program (CHIP) Services. He expressed these concerns during a leadership update call from the Center for Medicare & Medicaid Services (CMS) on Wednesday.
“Medicaid is so important across the country,” Tsai said. “Over one in five Americans get their health care coverage through us. We are leaving the program stronger today than where we started four years ago, but that progress is at risk.”
Tsai specifically opposed the introduction of work requirements or block grants for the program, arguing that they would create excessive bureaucratic hurdles.
“They are just plain bad policy not backed up by facts and evidence. And the cost will be people’s lives and health across the country,” he said.
The Trump administration has indicated that these requirements and grants may be introduced during President Trump’s next term.
Tsai’s concerns follow President Trump’s appointment of Dr. Mehmet Oz to lead CMS and Robert F. Kennedy Jr. to head the Department of Health and Human Services.
During the call, CMS leadership highlighted the agency’s accomplishments over the last four years. These included recovering from the disruptions caused by the COVID-19 pandemic, supporting the resumption of regular Medicaid and CHIP renewals after a three-year hiatus, and implementing provisions of the American Rescue Plan, the Inflation Reduction Act, the Affordable Care Act and other legislation.
Read Full Article |
DOL Rule Increasing Salary Threshold Set Aside
SESCO Management Consultants
The U.S. District Court for the Eastern District of Texas has vacated and set aside the U.S. Department of Labor (DOL)’s final rule increasing the salary threshold for the “White Collar” overtime exemptions under the Fair Labor Standards Act (FLSA) on a nationwide basis.
- The court held that each of the three components of the rule exceeded the DOL’s statutory authority under the FLSA. The court had previously enjoined enforcement of the rule against the State of Texas in its capacity as an employer of state employees; its final decision now vacates the rule for all employers nationwide.
- This means, most notably, that the increase in the salary level to be exempt to $1,128.00 per week ($58,656 per year) will NOT go into effect January 1, 2025. The court also struck down the July 1, 2024, increase to $844.00 per week ($43,888 per year). Finally, the court held that the final rule’s automatic “escalator” provision, which would have increased the threshold every three years going forward, was also unlawful.
- As such, the current salary threshold to be exempt under an applicable white-collar exemption is $684.00 per week ($35,568 per year).
What Comes Next?
- The January 1, 2025, increase will not go into effect as scheduled, and as a matter of law, the July 1, 2024, increase is nullified. The salary threshold will revert to $684 per week ($35,568 per year).
- Employers that previously adjusted salaries or the exemption status of employees to meet the July 1 salary level of $844.00 per week ($43,888 per year) may have the opportunity to reduce the salary increase and/or exemption status of affected employees. Clients are advised to consult with SESCO before considering whether to rescind those changes on a going-forward basis.
- The DOL may seek to appeal the lower court’s decision to the Fifth Circuit Court of Appeals. That said, with the upcoming change in the presidential administration, we predict that under new leadership the DOL would likely abandon any appeal and allow the lower court’s decision to stand. Going forward, it is less clear whether the Trump administration will revisit some or all the rule, repealing it entirely, or perhaps adopting a different formulation.
State Salary Thresholds
To ensure compliance, SESCO clients need to be aware of state salary threshold requirements that are higher than the Federal requirement.
The following states have their own salary thresholds that employers need to comply.
- California: twice the state's minimum wage rate for a 40-hour workweek ($1,280.00 per week as of January 1, 2024).
- Colorado: changes July 1 of each year ($1,057.69 per week as of July 1, 2024).
- Maine: $844.00 per week as of July 1, 2024; $1,128.00 per week as of January 1, 2025.
- New York: $1,300.00 per week as of March 13, 2024.
- Washington: twice the state's minimum wage rate for a 40-hour workweek ($1,302.40 per week as of January 1, 2024).
If employers have any questions or concerns, we recommend they contact us to ensure compliance. For assistance, contact us at 423-764-4127 or by email at [email protected] |
CMS Hospice Quality Reporting Program Forum (HOPE Assessment)
Thursday, December 12th (11:00 a.m. – 12:00 p.m. MT)
CMS will host a webinar to share an Introduction to Hospice Outcomes and Patient Evaluation (HOPE), and answer questions at the end of the webinar as time permits.
Register below to attend. When approved, you’ll receive an invitation to join the webinar.
REGISTER HERE |
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