States with at least 85% of their Medicaid population in managed care could implement nominal payment cuts without assuring care.
Hospitals, particularly rural providers, would be hurt by a Centers for Medicare and Medicaid Services proposed rule that would force them to take lower Medicaid rates without a review of the impact of the cuts, according to comments made to CMS asking for a reconsideration of the plan.
Provider organizations, hospitals, the Medicaid and CHIP Payment and Access Commission, are among those asking the Centers for Medicare and Medicaid Services to rethink its proposed rule.
Comments were due this week.
CMS proposed the rule in March to allow states that have a comprehensive, risk-based Medicaid managed care enrollment that is above 85 percent of their total Medicaid population to get around network adequacy rules when implementing “nominal” rate changes.
States had raised concern over the administrative burden associated with the current requirements, particularly for states with high rates of Medicaid managed care enrollment.
For states proposing nominal cuts below 4 percent a year or 6 percent over two years, the rule amends the process for them to document whether Medicaid payments in fee-for-service systems are sufficient to enlist providers to assure access to covered care and services.
These states would be exempt from access monitoring requirements and they would not need to seek public input on the rate reductions.
America’s Essential Hospitals said, “Requiring states to ensure, through monitoring, that rate reductions do not diminish access to needed services is particularly important now, as access monitoring reviews are the only vehicle left for providers to challenge state payment rate decisions.”
The Federation of American Hospitals contends that the rule would allow for more than nominal rate changes. If finalized, FAH said, the rule would allow for an estimated 18 states to implement a rate reduction of up to 12 percent over a period of four years or 16 percent over five years, without going through requirements for ongoing monitoring of the impact of the rate changes.
This would disproportionately impact vulnerable Medicaid beneficiaries and subject providers with unsustainable rate reductions, FAH said.
Most states, even those with very high rates of managed care enrollment, often exclude certain categories of particularly vulnerable groups from managed care plans, the organization said. People with physical, mental or intellectual disabilities or who are elderly, largely get services through fee-for-service, FAH told CMS Administrator Seema Verma.
The Medicaid and CHIP Payment and Access Commission said it did not find the states’ argument of administrative burden compelling enough given the federal government’s obligations to oversee state performance and assurances related to access.
“Moreover, exceptions to reporting may introduce gaps in oversight,” MACPAC Chair Penny Thompson said. “In short, the need for states to maintain resources and tools to monitor access as an ongoing element of state program administration and decision making outweighs the limited savings states would achieve as a result of these changes.”