The Centers for Medicare & Medicaid Services (CMS) on April 22 finalized the anticipated Medicaid managed care rule and the Ensuring Access to Medicaid Services rule. Together, these rules establish access standards and standardize review and assessment of Medicaid payment policies across states. At the same time, the agency issued an informational bulletin on provider tax program “hold harmless” arrangements, also addressed in the Medicaid managed care rule.
Medicaid Managed Care Rule and Financing Bulletin
The Medicaid managed care rule aims to improve access to and quality of care for Medicaid and Children’s Health Insurance Program beneficiaries. Of particular importance to essential hospitals, the final rule maintains states’ ability to implement directed payments for hospital services that would increase payment levels up to the average commercial rate. CMS also finalizes more robust evaluation requirements for all directed payment programs. In a reverse of prior policy that potentially could affect the structure of directed payment programs in many states, the final rule removes the flexibility for states to fund directed payments through separate payment terms for rate years, effective after July 9, 2027, to allow states a transition period.
The rule reiterates CMS’ policy prohibiting providers from participating in private provider tax “hold harmless” arrangements but postpones its proposed requirement that providers attest to compliance with the policy until after Jan. 1, 2028. In a separate informational bulletin, CMS further noted that it will delay enforcement of its hold harmless interpretation until 2028. That policy is the subject of active litigation in Florida and Texas.
CMS also finalized many proposed changes in the areas of medical loss ratio policy and reporting, in lieu of service and setting requirements, access standards and monitoring, and quality reviews.
Medicaid Access Rule
The Medicaid access rule adds new requirements for access and rate transparency in fee-for-service Medicaid programs, most of which take effect in July 2026. However, many of the new standards still do not directly apply to hospital services. The rule also finalizes changes to home- and community-based services rate setting and adds new requirements for beneficiary engagement in the development of Medicaid policies.
America’s Essential Hospitals is analyzing the final rules and will send members a detailed Action Update in the coming days.
Contact Director of Policy Robert Nelb at rnelb@essentialhospitals.org or 202.585.0127 with questions.
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