Requires notice and additional review for managed care providers of the methodologies and fee schedules and other materials used for determining medicaid reimbursement rates.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5381
SPONSOR: Paulin TITLE OF BILL:
An act to amend the social services law, in relation to determination
and approval of reimbursement rates for managed care providers under
medicaid
PURPOSE OR GENERAL IDEA OF BILL:
To increase transparency and promptness in the annual capitated rate
development process for Medicaid managed care plans and allow the plans
to preview and request actuarial review of the rates.
SUMMARY OF SPECIFIC PROVISIONS:
The bill amends Social Services Law
Sections one and two amend § 364- j(18)(c) and (f) to add more detail to
the existing disclosure required of the Department of Health (DOH) to
plans before submitting rates to the Center for Medicare and Medicaid
Services (CMS) for approval. Additional disclosures would include the
actuarial certification letters and correspondence between the state and
CMS related to the rates, end other information and methodologies that
DOH had considered but did not use in the development of the proposed
rates.
The plans would then be able to spot errors in the department's assump-
tions and request an actuarial-soundness review of the rates at least
ten days prior to DOH's submission to CMS. If DOH grants the review, DOH
does not submit the rates to CMS until the review is completed. If DOH
declines the review, DOH provides a written explanation to the plans
giving clear reasons why the request is denied.
Section three sets forth the effective date.
JUSTIFICATION:
Most of the Medicaid program functions through managed care plans,
either the mainstream plans or the long-term care plans. The plans
receive a capitated rate, per member per month, that is expected by
state and federal law to be actuarially sound - sufficient to cover the
full risk of medical care for the patient population served by the plan,
and the administrative costs to negotiate all the provider contracts and
benefit delivers'. Downstream providers complain that they are manipu-
lated at the mercy of the plans. Plans complain that they are manipu-
lated at the mercy of the Medicaid program. This bill aims for course
correction at the most upstream point, the capitated rate itself.
The existing rate disclosure requirement is missing key information and
DOH has consistently been late informing the plans of their rates. For
example, the draft April 2020 rates were initially shared with plans in
late October 2020, more than six months after their effective date. As
of December, they continued to be revised and were not yet submitted to
CMS by the new year. Nonetheless plans continued to assume risk and
deliver services, not certain of their reimbursement rates. This bill
requires DOH to notify MMC plans of anticipated rates prior to the
effective date of the rates so that plans can effectively manage busi-
ness operations, member services and provider payments.
DOH has been using rates that are at the bottom of the actuarially
acceptable rate range. Current law allows plans to request an actuari-
al-soundness review of proposed rates but does not require a DOH
response. This bill will provide plans with the certainty they need.
Either their request will be reviewed before CMS submission, or it will
not and if not, they will be told why.
PRIOR LEGISLATIVE HISTORY:
2021-2022: A7910 - reported to rules
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
This act shall take effect immediately; provided that the amendments to
section 364-j of the social services law made by sections one and two of
this act shall not affect the repeal of such section and shall expire
and be deemed repealed therewith.
STATE OF NEW YORK
________________________________________________________________________
5381
2023-2024 Regular Sessions
IN ASSEMBLY
March 9, 2023
___________
Introduced by M. of A. PAULIN, SAYEGH -- read once and referred to the
Committee on Health
AN ACT to amend the social services law, in relation to determination
and approval of reimbursement rates for managed care providers under
medicaid
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph (c) of subdivision 18 of section 364-j of the
2 social services law, as added by section 55 of part B of chapter 57 of
3 the laws of 2015, is amended to read as follows:
4 (c) The department [of health] shall require the independent actuary
5 selected pursuant to paragraph (b) of this subdivision to provide a
6 complete actuarial memorandum, along with all actuarial assumptions made
7 and all other data, materials and methodologies used in the development
8 of rates, to managed care providers thirty days prior to submission of
9 such rates to the centers for medicare and medicaid services for
10 approval. The actuarial memorandum shall include (i) any additional
11 materials submitted to the centers for medicare and medicaid services
12 including actuarial certification letters, (ii) any correspondence
13 between the state and the centers for medicare and medicaid services
14 related to the rates, (iii) other data, materials and methodologies
15 considered but not used by the department in the development of the
16 rates, and (iv) any information required to be disclosed to managed care
17 providers or the public under federal rules. The department shall
18 require the independent actuary to separately identify and present in a
19 collective group the required material under each applicable subpara-
20 graph (i) through (iv) of this paragraph. Managed care providers may
21 request that the department and its independent actuary conduct addi-
22 tional review of the actuarial soundness of the rate setting process
23 and/or methodology. Prior to submission of rates to the centers for
24 medicare and medicaid services for approval, the department shall
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD09075-01-3
A. 5381 2
1 respond to any request from managed care providers for additional review
2 of the actuarial soundness of the rate setting process or methodology,
3 and in such response the department shall either: (1) agree to addi-
4 tional review and delay submission of the rates for approval to the
5 centers for medicare and medicaid services until the department's review
6 is complete and shared with managed care providers, or (2) decline the
7 requested additional review, stating in writing clear reasons why the
8 request is denied.
9 § 2. Subdivision 18 of section 364-j of the social services law is
10 amended by adding a new paragraph (f) to read as follows:
11 (f) The department shall notify managed care providers of reimburse-
12 ment rates prior to the effective date of such rates.
13 § 3. This act shall take effect immediately; provided that the amend-
14 ments to section 364-j of the social services law made by sections one
15 and two of this act shall not affect the repeal of such section and
16 shall expire and be deemed repealed therewith.
