Obama administration issues most sweeping rules in a decade for Medicaid enrollees

The Obama administration tightened rules Monday for private insurance plans that administer most Medicaid benefits for the poor, limiting profits, easing enrollment and requiring minimum levels of participating doctors.

For consumers the most visible change may be quality ratings intended to reflect Medicaid plans’ health results and customer experiences. The administration agreed to move slowly on such a sensitive industry issue, saying it would develop the scores over several years.

But the sweeping regulation changes many aspects of how UnitedHealthcare, Aetna and other large contractors who administer care for some of the most vulnerable patients do business. It will:

  • Require states to set rules ensuring Medicaid plans have enough physicians in the right places. The standards will include “time and distance” maximums to ensure doctors aren’t too far away from members.
  • Limit insurer profits by requiring rate setting that assumes 85 percent of revenue will be spent on medical care. Unlike a similar rule for other plans, such as insurance sold through Obamacare marketplaces, the requirement would not compel Medicaid insurers to rebate the difference if they don’t hit 85 percent. Future rates would be adjusted instead.
  • Make plans regularly update directories of doctors and hospitals. A 2014 investigation by the Department of Health and Human Services’ inspector general found that half the doctors listed in official insurer directories weren’t taking new Medicaid patients.
  • Push plans to better detect and prevent fraud by providers, including mandatory reporting of suspected abuse to the states.
  • Tighten rules for Medicaid plans and states to collect patient data and submit it to HHS.
  • Make it easier for states to offer managed-care plans incentives to improve clinical outcomes, reduce costs and share patient information among hospitals and doctors.