The Centers for Medicare & Medicaid Services (CMS) on June 12 released guidance on Medicaid and Children’s Health Insurance Program (CHIP) managed care monitoring and oversight tools, aiming to help improve states’ oversight of managed care.
The guidance provides updates on efforts to expand the portal for managed care reporting, contracts, and rate submissions, as well as reminders about state reporting requirements, CMS’ process for review and approval of managed care contracts, and state responsibilities for managed care oversight.
Further, the guidance responds to two reports from the Department of Health and Human Services Office of Inspector General on deficiencies in state and plan compliance with federal mental health (MH) and substance use disorder (SUD) parity and prior authorization requirements.
This is the fourth informational bulletin in a series; previous guidance introduced a reporting template for the Managed Care Program Annual Report; updated the reporting portal; created reporting templates for the medical loss ratio and Network Adequacy and Access Assurances reports; and updated CMS’ process for review and approval of managed care contracts, rate certifications, and state directed payments.
MH and SUD Parity
CMS reiterates that states must comply with federal parity requirements, including financial requirements. Treatment limitations imposed on MH or SUD benefits may not be more restrictive than those applied to substantially all medical or surgical benefits in the same classification of benefits. Treatment limitations include benefits based on the frequency of treatment, number of visits, days of coverage, days in a waiting period, or other similar limits.
States must provide documentation of how services to Medicaid managed care enrollees and separate CHIP beneficiaries are delivered in compliance with federal requirements. States must also effectively monitor parity requirements as part of their Medicaid managed care program monitoring activities, which should include policies for regularly reviewing compliance with MH and SUD parity requirements.
Prior Authorization
CMS states clearly that states are responsible for overseeing plans’ prior authorization processes and performance. Further, CMS encourages states to prepare for new provisions in the Interoperability and Patient Access final rule that will affect Medicaid and CHIP managed care plans. For rating periods starting on or after Jan. 1, 2026, Medicaid plans must:
- Provide standard prior authorization decisions within state-established timeframes that cannot exceed seven calendar days for non-expedited matters.
- Provide a specific reason for every denial.
- Post annual prior authorization metrics on their public website.
Contact Director of Policy Rob Nelb, MPH, at rnelb@essentialhospitals.org or 202.585.0127 with questions.