CMS final Rule

CMS Final Rule Expands States’ Flexibilities for Network Adequacy and Telehealth


April 18, 2021 | Reading Time: 2 Minutes

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The Centers for Medicare and Medicaid Services (CMS) released its 2020 Medicaid & Children’s Health Insurance Program (CHIP) Managed Care Final Rule – CMS-2408-F in November. The Final Rule achieves a better balance between appropriate federal oversight and state flexibility while also maintaining critical beneficiary protections, ensuring fiscal integrity, and promoting accountability for providing quality care to people with Medicaid. The rule’s goal was to reduce federal regulatory barriers, support flexibility, and promote transparency and innovation when states develop and implement managed care programs for Medicaid and CHIP.

CMS Final Rule and Telehealth

The CMS final rule addresses telehealth specifically about how telehealth visits should be counted towards meeting a managed care plan’s network adequacy requirement. The blog published on November 14, 2020, has also discussed the list of new telehealth services covered by Medicare. The CMS rule states the following:

We defer to each state to determine the criteria to be applied to telehealth providers and how such providers would be taken into account when evaluating network adequacy of the state’s Medicaid managed care plans. Section 438.68(b) does not set criteria of this nature that states must use. Under § 438.68(c)(1)(ix), states must consider the availability and use of telemedicine when developing their network adequacy standards. If states elect to include telehealth providers in their network adequacy analysis, we believe that the states will establish criteria that appropriately reflect the unique nature of telehealth, as well as the availability and practical usage of telehealth in their state.

CMS also states in its press release that the adjustments it made to the minimum standards states must use in developing network adequacy requirements in a way that supports state facilitation for telehealth options. More specifically, the CMS final rule focuses on:

  • Setting Actuarially Sound Capitation Rates
  • Pass-Through Payments
  • State-Directed Payments
  • Network Adequacy Standards
  • Risk Sharing Mechanisms
  • Quality Rating System
  • Appeals and Grievances
  • Requirements for Beneficiary Information

The rule also gives states greater flexibility to establish appropriate payment for Medicaid and CHIP Services and set standards that effectively address the healthcare needs specific to their state while ensuring appropriate beneficiary protections. For more information on the CMS final rule, see CMS’s factsheet or read the rule in its entirety.

Essential Telehealth Law & Ethical Issues

Bring your telehealth practice into legal compliance. Get up to date on inter-jurisdictional practice, privacy, HIPAA, referrals, risk management, duty to warn, the duty to report, termination, and much more!

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