CMS Issues Final Rule on State Flexibility with Medicaid Benchmark Plans - May 5, 2010

On April 30, the Centers for Medicare and Medicaid Services (CMS) issued a final rule implementing a provision of the Deficit Reduction Act (DRA) of 2005 that grants states flexibility to offer benchmark benefit packages or benchmark-equivalent packages (actuarial equivalents to a benchmark package), differing in their benefits from traditional Medicaid. The rule defines the scope of such coverage, offers guidance regarding populations that are exempt from the benchmark option and provides the parameters for voluntary versus mandatory enrollment in benchmark plans. This rule takes effect July 1, 2010. Although CMS has approved only 10 State benchmark programs, this rule will be significant under health reform since use of such plans is specifically referenced with respect to Medicaid expansion populations. CMS plans to issue another final rule with a shortened effective date to implement the changes under the health reform bill.