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Federal Medicaid Network Adequacy Standards

Federal law requires CMS to review and approve State contracts with Medicaid Managed Care Plans (MCPs), which include Managed Care Organizations (MCOs).1 The federal requirements act as a “floor,” but states are permitted to set more stringent requirements if they wish.

In 2020, CMS changed the federal floor network adequacy requirements for State MCO contracts.2 CMS removed a requirement that States create time and distance standards for MCO contracts to a new requirement that States create quantitative network adequacy standards. This standard is less directive than the former time and distance standard, which leaves more room for State interpretation.

The following brief outlines how States are to comply with the requirement to create quantitative network adequacy standards. To fully understand the requirements States must meet, the Basic Overview and the Further Guidance Overview in the brief must be read together.

The brief concludes with information about how Quest Analytics stands by to help states develop standards consistent with these new federal requirements.

Basic MCO Quantitative Network Adequacy Standards Overview

This Basic Overview is an overview of what is required of States under current federal regulations.3

At a minimum, a State must develop a quantitative network adequacy standard for the following provider types, if covered under the MCO contract:

  • Primary care, adult and pediatric
  • OB/GYN
  • Behavioral health (mental health and substance use disorder), adult and pediatric
  • Specialist (as designated by the State), adult, and pediatric
  • Hospital
  • Pharmacy
  • Pediatric dental

States with MCO contracts that cover Long-Term Services and Supports (LTSS) 4 must develop a quantitative network adequacy standard for LTSS provider types.

The quantitative network adequacy standards developed by States must include all geographic areas covered by the MCO. States are permitted to have varying standards for the same provider type based on geographic areas. States must consider, at a minimum, the following elements when developing quantitative network adequacy standards:

  • The anticipated Medicaid enrollment
  • The expected utilization of services
  • The characteristics and health care needs of specific Medicaid populations covered in the MCO contract
  • The numbers and types (in terms of training, experience, and specialization) of network providers required to furnish the contracted Medicaid services
  • The number of network providers who are not accepting new Medicaid patients
  • The geographic location of network providers and Medicaid enrollees, considering distance, travel time, the means of transportation ordinarily used by Medicaid enrollees
  • The ability of network providers to communicate with limited English proficient enrollees in their preferred language
  • The ability of network providers to ensure physical access, reasonable accommodations, culturally competent communications, and accessible equipment for Medicaid enrollees with physical or mental disabilities
  • The availability of triage lines or screening systems, as well as the use of telemedicine, e-visits, and/or other evolving and innovative technological solutions

In addition to the above considerations, States with MCO contracts that cover LTSS must consider the following as well:

  • Elements that would support an enrollee’s choice of provider.
  • Strategies that would ensure the health and welfare of the enrollee and support community integration of the enrollee.
  • Other considerations that are in the best interest of the enrollees that need LTSS.

States are permitted to have an exception process to the quantitative network adequacy standards. To the extent, the State permits an exception to any of the provider-specific network standards, the standard by which the exception will be evaluated and approved must be (1) specified in the MCO contract and (2) based, at a minimum, on the number of providers in that specialty practicing in the MCO service area.

States that grant an exception must monitor enrollee access to that provider type on an ongoing basis and include the findings to CMS.

States must publish the quantitative network adequacy standards it develops. Upon request, the standards must also be made available at no cost to enrollees with disabilities in alternate formats or through the provision of auxiliary aids and services.

Further Guidance on Quantitative Network Adequacy Standards Overview

This Further Guidance Overview is an overview of guidance5 CMS issued to States to further implement the regulatory requirements laid out in the Basic Overview. The overview contains Network Adequacy Process Requirements and Network Adequacy Standards that States must ensure their MCOs meet. The overview concludes with Network Adequacy Tips for States. Some of the provisions in this overview may sound duplicative of the requirements in the Basic Overview. However, the provisions in this overview are intended to add to or further explain the requirements under current federal regulation.

Network Adequacy Process Requirements

The State contract with the MCO must require that the MCO:

  • Maintain and monitor a network of appropriate providers that is supported by written agreements.
  • Maintain and monitor a network of appropriate providers that is sufficient to provide adequate access to all services covered under the contract for all enrollees, including those with limited English proficiency or physical or mental disabilities.
  • Demonstrate that its network includes sufficient family planning providers to ensure timely access to covered services.
  • Give assurances and provide supporting documentation that demonstrates that it has the capacity to serve the expected enrollment in its service area in accordance with the State’s standards for access and timeliness of care.
  • Submit documentation to the State to demonstrate that it offers an appropriate range of preventive, primary care, specialty services, and LTSS that is adequate for the anticipated number of enrollees for the service area.
  • Submit documentation to the State to demonstrate that it maintains a network of providers that is sufficient in number, mix, and geographic distribution to meet the needs of the anticipated number of enrollees in the service area.
  • To submit documentation as specified by the State, but no less frequently than the following: 1) at the time it enters into a contract with the State; 2) on an annual basis; 3) at any time there has been a significant change in the MCO’s operations that would affect the adequacy of capacity and services, including changes in MCO services, benefits, geographic service area, the composition of or payments to its provider network, or at the enrollment of a new population in the MCO.

The guidance places special requirements on State contracts with Primary Care Case Managers (PCCM), which is a type of MCP that is different than an MCO.7

Network Adequacy Standards

The State contract with the MCO must require that the MCO:

  • Ensure its network providers meet the State standards for timely access to care and services, taking into account the urgency of need for services.
  • Ensure its network providers offer hours of operation that are no less than the hours offered to commercial enrollees or are comparable to Medicaid FFS, if the provider serves only Medicaid enrollees.
  • Make services available 24 hours a day, 7 days a week, when medically necessary.
  • Establish mechanisms to ensure that its network providers comply with the timely access requirements.
  • Monitor network providers regularly to determine compliance with the timely access requirements.
  • Take corrective action if it, or its network providers, fail to comply with the timely access requirements.
  • Ensure that network providers provide physical access, reasonable accommodations, and accessible equipment for Medicaid enrollees with physical or mental disabilities.
  • Adhere to the quantitative network adequacy standards developed by the State in all geographic areas in which the MCO operates for the provider types described in the Basic Overview, if the provider type is covered under the MCO contract.

For MCOs that provide LTSS services, the MCO contract must require that the MCO adhere to the quantitative network adequacy standards for LTSS provider types developed by the state.

For MCOs that provide LTSS services, the contract must require that the MCO will meet state quantitative network adequacy standards in all geographic areas in which the MCP operates for LTSS services. States are permitted to have varying standards for the same provider type based on geographic areas.

Network Adequacy Tips for States

CMS acknowledges how a State chooses to enforce of these requirements with the MCO may vary. For example, a State is permitted to:

  • Include the network adequacy standards as an attachment to the contract;
  • Stipulate each standard within the MCO contract;
  • Require within the contract that the MCO adhere to the State’s network adequacy standards and describe the process by which MCOs will be notified of these standards (such as through the state’s website, quality strategy, provider notices, etc.); or
  • Use another method

Conclusion

Quest Analytics stands by to partner with State Medicaid Agencies to help develop quantitative network adequacy standards that are compliant with federal standards outlined in this brief. Given Quest Analytics’ knowledge of evidence-based quantitative network adequacy standards, our strong relationships with network adequacy leaders inside CMS, and our contractual relationships with MCOs, Quest Analytics is in a strong position to offer expert assistance to any State in the development of standards.

Endnotes

  1. CMS utilizes the term Managed Care Plan (MCP) to encompass all types of managed care entities that States contract with to provide services to the Medicaid population (i.e., MCO, HIO, PIHP, PAHP, NEMT PAHP, PCCM, PCCM entity). For the sake of simplicity, I use the term “MCO” throughout this brief to simplify the analysis. It should be noted that MCO has a specific definition in federal law. Requirements may slightly differ based on MCP type. If there is any question about what is specifically required of a Medicaid entity, MCO or otherwise, please contact Zach Snyder, VP of Government Affairs at zach.snyder@questanalytics.com.
  2. See 2020 Managed Care Final Rule.
  3. See 42 CFR 438.68
  4. LTSS are services and supports provided to beneficiaries of all ages who have functional limitations and/or chronic illnesses that have the primary purpose of supporting the ability of the beneficiary to live or work in the setting of their choice, which may include the individual’s home, a worksite, a provider-owned or controlled residential setting, a nursing facility, or other institutional settings. See 42 CFR 438.2.
  5. See State Guide to CMS Criteria for Medicaid Managed Care Contract Review and Approval (2022).
  6. A PCCM is a physician, a physician group practice, or at the State option, any of the following: (1) a physician assistant; (2) a nurse practitioner; or (3) a certified nurse-midwife. See 42 CFR 438.2.