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The regulation guarantees Medicaid beneficiaries access to emergency room care, a second opinion when needed, a timely right to appeal adverse coverage decisions and other patient protections. Under the new regulation, states have significant flexibility to decide how best to implement patient protections and use managed care in their Medicaid plans.

"This new rule ensures Medicaid beneficiaries get the rights and protections enjoyed by other Americans enrolled in managed care plans," Secretary Thompson said. "It also gives states the flexibility to implement these protections without jeopardizing health care services."

The final regulation builds on protections for Medicaid beneficiaries that were created under the Balanced Budget Act of 1997. About 22 million Medicaid beneficiaries, or 58 percent of all Medicaid enrollees, were enrolled in managed care programs at the end last year.

This rule also will change the federal requirements governing payments under state managed care programs, moving away from a formula using fee-for-service payments to a requirement that the methodology be actuarially sound. In addition, the final rule permits states with risk contracts to make graduate medical payments directly to academic medical centers.

The rule retains and expands upon all the protections already available to Medicaid beneficiaries under the 1997 statute. Under the rule, beneficiaries will have the following rights:

• Emergency Room Care. Health plans must pay for a Medicaid beneficiary's emergency room care whenever and wherever the need arises.
• Access to second opinion. All beneficiaries will be allowed to get a second opinion from a qualified health professional.
• Direct access for women's health services. Women will be allowed to directly access a woman's health specialist in the network for routine and preventive health care services as is available in Medicaid fee-for-service.
• Patient-Provider Communication. Managed care plans will be prohibited from establishing restrictions, such as gag rules, that interfere with patient-provider communications.
• Network Adequacy. Managed care plans will be required to ensure that they have the capacity to serve the expected enrollment in their service area.
• Marketing Activities. States will be required to approve marketing materials used by the managed care plans to enroll Medicaid beneficiaries. Plans are prohibited from using door-to-door, telephone, and other forms of "cold call" marketing.
• Grievance Systems. All managed care plans must have a system in place to accommodate enrollee grievances and appeals. Grievances must be resolved within state established timeframes that may not be longer than 90 days and must be resolved by managed care organizations within 45 days. However, expedited timeframes exist for resolving appeals when the life or health of the enrollee is in jeopardy.

Managed care plans serving Medicaid beneficiaries also must provide consumers with comprehensive, easy-to-understand information about the program in which they are enrolled.

The final rule will allow states, many of which have already implemented protections through state laws and regulations, to keep in place important aspects of their existing programs. The new rule also will require states to submit to HHS clear plans for providing beneficiaries with high quality care and to measure the quality of the care that is actually provided.

The final regulation will be published in the Federal Register June 14 and will be available online at cms.hhs.gov/medicaid/omchmpg.htm. The regulation becomes effective Aug. 13, 2002, and states and health plans must come into full compliance within a year.

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