§ 438.207 Assurances of adequate capacity and services. ( a ) *Basic rule.* The State must ensure, through its contracts, that each MCO, PIHP, and PAHP gives assurances to the State and provides supporting documentation that demonstrates that it has the capacity to serve the expected enrollment in its service area in accordance with the State's standards for access to care under this part, including the standards at § 438.68 and § 438.206(c)(1).
( b ) *Nature of supporting documentation.* Each MCO, PIHP, and PAHP must submit documentation to the State, in a format specified by the State, to demonstrate that it complies with the following requirements: ( 1 ) Offers an appropriate range of preventive, primary care, specialty services, and LTSS that is adequate for the anticipated number of enrollees for the service area;
( 2 ) Maintains a network of providers that is sufficient in number, mix, and geographic distribution to meet the needs of the anticipated number of enrollees in the service area; and
( 3 ) Except as specified in paragraphs (b)(3)(iii) and (iv) of this section and if covered by the MCO's, PIHP's, or PAHP's contract, provides an annual payment analysis using paid claims data from the immediate prior rating period that demonstrates each MCO's, PIHP's, or PAHP's level of payment as specified in paragraphs (b)(3)(i) and (ii) of this section. ( i ) The payment analysis must provide the total amount paid for evaluation and management current procedural terminology codes in the paid claims data from the immediate prior rating period for primary care, obstetrical and gynecological, mental health, and substance use disorder services, as well as the percentage that results from dividing the total amount paid by the published Medicare payment rate for the same services. ( A ) A separate total and percentage must be reported for primary care, obstetrics and gynecology, mental health, and substance use disorder services; and
( B ) If the percentage differs between adult and pediatric services, the percentages must be reported separately.
( ii ) For homemaker services, home health aide services, personal care services, and habilitation services, the payment analysis must provide the total amount paid and the percentage that results from dividing the total amount paid by the amount the State's Medicaid FFS program would have paid for the same services. ( A ) A separate total and percentage must be reported for homemaker services, home health aide services, personal care services, and habilitation services; and
( B ) If the percentage differs between adult and pediatric services, the percentages must be reported separately.
( iii ) Payments by MCOs, PIHPS, and PAHPs for the services specified in § 438.207(b)(3)(i) and (ii) for which the MCO, PIHP, or PAHP is not the primary payer are excluded from the analysis required in this paragraph.
( iv ) Services furnished by a Federally-qualified health center as defined in section 1905(l)(2) and services furnished by a rural health clinic as defined in section 1905(l)(1) are excluded from the analysis required in this paragraph.
( c ) *Timing of documentation.* Each MCO, PIHP, and PAHP must submit the documentation described in paragraph (b) of this section as specified by the State, but no less frequently than the following: ( 1 ) At the time it enters into a contract with the State.
( 2 ) On an annual basis.
( 3 ) At any time there has been a significant change (as defined by the State) in the MCO's, PIHP's, or PAHP's operations that would affect the adequacy of capacity and services, including— ( i ) Changes in MCO, PIHP, or PAHP services, benefits, geographic service area, composition of or payments to its provider network; or
( ii ) Enrollment of a new population in the MCO, PIHP, or PAHP.
( d ) *State review and certification to CMS.* After the State reviews the documentation submitted by the MCO, PIHP, or PAHP as specified in paragraph (b) of this section and the secret shopper evaluation results as required at § 438.68(f), the State must submit an assurance of compliance to CMS, in the format prescribed by CMS, that the MCO, PIHP, or PAHP meets the State's requirements for availability of services, as set forth in §§ 438.68 and 438.206. ( 1 ) The submission to CMS must include documentation of an analysis that supports the assurance of the adequacy of the network for each contracted MCO, PIHP or PAHP related to its provider network.
( 2 ) The analysis in paragraph (d)(1) of this section must include the payment analysis submitted by each MCO, PIHP, or PAHP, as required in paragraph (b)(3) of this section, and contain: ( i ) The data provided by each MCO, PIHP, and PAHP in paragraph (b)(3) of this section; and
( ii ) A State level payment percentage for each service type specified in paragraphs (b)(3)(i) and (ii) of this section produced by using the number of member months for the applicable rating period to weight each MCO's, PIHP's, or PAHP's reported percentages, as required in paragraph (b)(3) of this section.
( 3 ) States must submit the assurance of compliance required in paragraph (d) of this section as specified in paragraphs (i) through (iii) of this section and post the report on the State's website required in § 438.10(c)(3) within 30 calendar days of submission to CMS. ( i ) Sufficiently in advance to enable CMS to make a determination that the contract entered into as specified at § 438.207(c)(1) is approved under § 438.3(a).
( ii ) On an annual basis and no later than 180 calendar days after each rating period.
( iii ) At any time there has been a significant change as specified in paragraph (c)(3) of this section and with the submission of the associated contract, as required at § 438.3(a).
( e ) *CMS's right to inspect documentation.* The State must make available to CMS, upon request, all documentation collected by the State from the MCO, PIHP, or PAHP, as well as documentation from all secret shopper surveys required at § 438.68(f).
( f ) *Remedy plans to improve access.* ( 1 ) When the State, MCO, PIHP, PAHP, or CMS identifies an area in which an MCO's, PIHP's, or PAHP's access to care under the access standards in this part could be improved, including the standards at §§ 438.68 and 438.206, the State must: ( i ) Submit to CMS for approval a remedy plan as specified in paragraph (f)(ii) of this section no later than 90 calendar days following the date that the State becomes aware of an MCO's, PIHP's, or PAHP's access issue;
( ii ) Develop a remedy plan that addresses the identified access issue within 12 months and that identifies specific steps with timelines for implementation and completion, and responsible parties. State's and MCO's, PIHP's, or PAHP's actions may include a variety of approaches, including but not limited to: increasing payment rates to providers, improving outreach and problem resolution to providers, reducing barriers to provider credentialing and contracting, providing for improved or expanded use of telehealth, and improving the timeliness and accuracy of processes such as claim payment and prior authorization;
( iii ) Ensure that improvements in access are measurable and sustainable; and
( iv ) Submit quarterly progress updates to CMS on implementation of the remedy plan.
( 2 ) If the remedy plan required in paragraph (f)(1) of this section does not result in addressing the MCO's, PIHP's, or PAHP's access issue by improving access within 12 months, CMS may require the State to continue the remedy plan for another 12 months and may require revision to the remedy plan required in paragraph (f)(1) of this section.
( g ) *Applicability date.* Paragraphs (b)(3) and (d)(2) of this section apply to the first rating period for contracts with MCOs, PIHPs, or PAHPs beginning on or after 2 years after July 9, 2024. Paragraph (d)(3) of this section applies to the first rating period for contracts with MCOs, PIHPs, or PAHPs beginning on or after 1 year after July 9, 2024. States will not be held out of compliance with the requirements of paragraph (e) of this section prior to the rating period for contracts with MCOs, PIHPs, or PAHPs beginning on or after 4 year after July 9, 2024, so long as they comply with the corresponding standard(s) codified in 42 CFR 438.207 (e) (effective as of October 1, 2023) Paragraph (f) of this section applies to the first rating period for contracts with MCOs, PIHPs, or PAHPs beginning on or after 4 years after July 9, 2024.
[81 FR 27853, May 6, 2016, as amended at 89 FR 41277, May 10, 2024]