State Medicaid contracts--HCFA. Final rules.

Abstract

These regulations--(1) Make it possible for Medicaid agencies to contract on a risk basis with health maintenance organizations (HMOs) other than those that meet all the requirements for a Federally qualified HMO; (2) Ease requirements that limit the proportion of HMO enrollees that may be persons eligible for Medicare or Medicaid; and (3) Permit States to continue to provide Medicaid (through the benefits provided to the recipient as an HMO enrollee), for a period of up to 6 months from the date of enrollment in a Federally qualified HMO, even if the enrollee loses Medicaid eligibility before the end of that period. These regulations are necessary to implement section 2178 of the Omnibus Budget Reconciliation Act of 1981. They also include changes made as part of regulatory reform. The intent is to encourage and enable Medicaid agencies to make greater use of HMOs and other prepaid health plans (PHPs) to payments for a person not currently eligible. The fluctuations also make it impossible for the HMO to be certain of the amounts it will receive, in capitation fees, for a particular period. Section 2178 of Pub. L. 97-35 amended section 1902(e) of the Act to provide States the option of continuing Medicaid, for a period of up to 6 months from date of enrollment in a Federally qualified HMO, even if the enrollee loses Medicaid eligibility before the end of that period. This will help to resolve the administrative problems for both States and HMOs and facilitate use of HMOs in Medicaid.