Managed care is a healthcare delivery system that seeks to control costs and improve the quality of care by addressing the use of healthcare services (Galindo et al., 2021). State and federal agencies control managed care organizations (MCOs), with each regulation level having distinct characteristics. Despite having similar goals, the extent and scope of regulation between state and federal laws vary. This essay compares and contrasts state and federal laws governing managed care and assesses which laws influence managed care more.
The extent of regulation is the primary distinction between state and federal managed care regulation. Federal laws cover a more comprehensive range of managed care issues, including care quality, consumer protection, and financial soundness (Wilkicki & Spencer, 2008). On the other hand, state laws might concentrate more on particular concerns in a given state. For instance, some states might have particular rules about network sufficiency or mental health equity that go above and beyond federal laws. For MCOs operating in numerous states, this difference in scope may have significant ramifications because they may have to adhere to various state-specific requirements in addition to federal regulations.
The minimum requirements MCOs must meet are the following distinction between managed care rules under state and federal law. All MCOs must adhere to a minimum level established by federal rules, such as offering their members essential health benefits. On the other hand, the criteria and restrictions set by state laws could differ, affecting how well MCOs deliver care in different states. For instance, certain states might have stricter regulations for network sufficiency, while others might have looser regulations. According to a Commonwealth Fund analysis, federal laws provide a foundational standard for quality and consumer protection in managed care. However, state regulations can augment these requirements and offer additional consumer protections (Collins, Gunja, & Doty, 2017).
Another difference between state and federal managed care regulations is the level of enforcement and oversight. Federal restrictions are primarily implemented by the Centers for Medicare and Medicaid Services (CMS), which has the right to levy fines, sanctions, and other penalties on MCOs that fail to comply with federal requirements. On the other hand, state laws are in charge of implementing state laws governing managed care, and they have the authority to do so by using a variety of enforcement instruments, including fines, sanctions, and license revocation. However, state insurance departments needed more funding to carry out monitoring and enforcement tasks, which could result in oversight and enforcement gaps.
The degree of latitude given to MCOs is another significant distinction between state and federal managed care regulation. Federal rules may be more prescriptive, specifying particular requirements for MCOs to fulfil. However, state regulations may be more flexible, allowing MCOs to design and execute their approaches to care delivery. This accuracy allows MCOs operating in states with more liberal rules to experiment with innovative care delivery models and technology, whereas MCOs operating under more restrictive federal standards may have less room for innovation. While state rules may be more focused on allowing MCOs to innovate and adapt to individual needs, federal regulations are frequently created to ensure that MCOs adhere to specific basic standards of care and quality of their local populations (Gray, Lowery, & Godwin, 2007).
Which regulations have more impact?
Federal regulations have a more significant impact on managed care than state laws. This is because federal regulations are more comprehensive and cover more ground than state regulations, which frequently differ from one state to the next. State regulations might need more resources to enforce compliance and levy penalties on non-compliant companies, whereas federal regulations can. A notable illustration of federal regulations that significantly impact managed care is the Affordable Care Act. All states must abide by the statute, which established minimum requirements for health plans, including those provided by managed care organizations. This has helped lower expenses and enhance the quality of care while also resulting in a more consistent standard of care nationwide. The ACA is a vital instrument for managing managed care because it also includes tools for oversight and enforcement (WHaram, 2013).
To summarize, the discrepancies between state and federal managed care rules are significant and can impact the quality and cost of care patients receive. Although both state and federal laws have advantages and disadvantages, it is evident that federal regulations have a more significant impact on managed care because of their broader scope, enforceability, and capacity to support uniform standards of care. Regulatory frameworks must adapt as managed care changes to guarantee that patients get the best treatment possible.
References
Galindo, R. J., Parkin, C. G., Aleppo, G., Carlson, A. L., Kruger, D. F., Levy, C. J., … & McGill, J. B. (2021). What’s wrong with this picture? A critical review of current centers for Medicare & Medicaid Services coverage criteria for continuous glucose monitoring. Diabetes technology & therapeutics, 23(9), 652–660.
Collins, S. R., Gunja, M. Z., & Doty, M. M. (2017). How well does insurance coverage protect consumers from health care costs? The Commonwealth Fund, p. 23.
Gray, V., Lowery, D., & Godwin, E. K. (2007). The political management of managed care: Explaining variations in state health maintenance organization regulations. Journal of Health Politics, Policy and Law, 32(3), 457–495.
Wharam, J. F. (2013). The ACA and high-deductible insurance–strategies for sharpening a blunt instrument. The New England journal of medicine, 369(16), 1481.
Wilkicki, K., & Spencer, A. (2008, April). National Conference of State Legislatures. In National Conference of State Legislatures.
write