CMS Rule Change Would Ease State Reporting on Medicaid Access

The proposal would exempt states with a Medicaid managed care penetration of 85% or more from some monitoring requirements, and provide flexibility to states when they make nominal rate reductions to fee-for-service payment rates.

A proposed rule change by the Centers for Medicare & Medicaid Services would exempt state Medicaid programs from some access-to-care reporting requirements.

Specifically, the proposal would exempt states with a Medicaid managed care penetration of 85% or more from some monitoring requirements, and provide similar flexibility to states when they make nominal rate reductions to fee-for-service payment rates.

"These new policies do not mean that we aren't interested in beneficiary access, but are intended to relieve unnecessary regulatory burden on states, avoid increasing administrative costs for taxpayers, and refocus time and resources on improving the health outcomes of Medicaid beneficiaries," CMS Administrator Seema Verma said in a media release.

Under CMS's Notice of Proposed Rulemaking:

States with an overall Medicaid managed care penetration rate of 85% or greater (currently, 17 states) would be exempt from most access monitoring requirements.
Reductions to provider payments of less than 4% percent in overall service category spending during a state fiscal year (and 6% over two consecutive years) would not be subject to the specific access analysis.
When states reduce Medicaid payment rates, they would rely on baseline information regarding access under current payment rates, rather than be required to predict the effects of rate reductions on access to care, which states have found very difficult to do.

Jeff M. Myers, president and CEO of Medicaid Health Plans of America, said the existing rules are not needed in states with a high penetration of Medicaid managed care plans because they already have robust provider networks.

"The exception lessens the burden on states and is in line with the overall effort to streamline some regulations and introduce more efficiency into the program," Myers said.

Jack Rollins, senior policy analyst at the National Association of Medicaid Directors, said the proposed rule change appears to address some concerns raised by the states.

"We are still reviewing but our preliminary impression, the caveat that we haven't had a conversation with our members, is that CMS appears to have taken state feedback into consideration and are making what looks to be some positive changes that will allow states to manage their programs effectively and still strike the balance between ensuring appropriate access and setting some guardrails around it without causing so much administrative complexity," Rollins said.

Rollins said the proposed rule change amends an Obama administration rule that established a Medicaid access monitoring for fee-for-service programs, but exempted managed care.

"What that rule did was identify a bucket of five or six core service areas where states needed to put together data packages that showed how their rates compared to other payers in the state and nationally," Rollins said. "They would compare their rates to what Medicare paid, what other state Medicaid programs paid, maybe some commercial payers in the private market paid. The intent behind that was to look at the comparison and show that Medicaid rates aligned or were relatively close to other payers, or maybe they were far off."

In addition to monitoring these core service areas, the rule also required states that were making rate reductions or restructurings in other services areas to produce an access monitoring plan to assess the impact on the rate change over three years, and to provide upfront projections on how the rate change would affect access.

"Our members took issues with some of that regulatory frame work," Rollins said. "The fact that it applied to fee-for-service and not managed care, when managed care programs are the primary delivery system for Medicaid these days."

"Many states might have the majority of their Medicaid populations covered under managed care and only a relatively small or vestigial fee-for-service," he said. "Those states felt it didn't make a lot of sense to invest a lot of time and staff resources and state dollars creating a comprehensive access monitoring plan for a program that in some states covered maybe 100 people."

In addition, providing state-by-state comparisons proved challenging.

"First of all, many states said they had trouble accessing any kind of private pay rates from Managed care plans in the private market. Understandingly, that information is proprietary," Rollins said.

"Second, Medicaid covers a lot of services that Medicare does not so there is not always a one-to-one comparison," he said.

"Third, it is difficult to compare your rate structures to other states, because if you've seen one Medicaid program you've seen one Medicaid program," he said. "There is so much variation in terms of the populations covered and how states cover them, the various waiver authorities they might use in their program designs, that states are finding it very difficult to make an apples-to-apples comparison."

The proposed rule was published last week in the Federal Register and public comments will be accepted for the next 60 days. Rollins said NAMD will offer comment on the proposal after speaking with its members.