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Stakeholders Pan CMS' Health Adult Opportunity

Analysis  |  By Jack O'Brien  
   January 31, 2020

Both provider and payer associations criticized the Trump administration's Medicaid block grant announcement.

The Centers for Medicare & Medicaid Services' (CMS) Health Adult Opportunity (HAO) initiative, which would allow states to transition their Medicaid programs into a block grant program, has drawn the ire of industry stakeholders.

Both provider and payer associations criticized the Trump administration's Medicaid block grant announcement, arguing that the initiative would reduce access to care for beneficiaries and alter long-standing prescription drug formularies.

Shortly after the proposal was released, both the American Medical Association (AMA) and the Leadership Conference on Civil and Human Rights (LCCHR) issued statements opposing the proposal.

Additionally, the American College of Physicians (ACP) and the Association of American Medical Colleges (AAMC), both urged CMS to withdraw the proposal.

The ACP said HAO will "put access to healthcare at risk for Medicaid beneficiaries" and potentially allow states to impose premiums and cost-sharing measures on beneficiaries.

"ACP strongly opposes transforming Medicaid’s existing financing structure into a block grant approach because it will increase the number of people without health insurance coverage for essential health care services," Robert McLean, MD, MACP, president of ACP, said in a statement. "Likewise, the per-capita cap option will restrict crucial healthcare funding."

Related: CMS Releases Medicaid Block Grant Plan: Healthy Adult Opportunity

AAMC said HAO could lead to reductions in "coverage, access, and quality care" for millions of Medicaid beneficiaries.

"The AAMC fully supports Medicaid expansion, and we also appreciate the role of states in tailoring their Medicaid programs to best suit the needs of their populations and communities," AAMC said in a statement. "However, today’s announcement would fundamentally undermine the federal-state partnership at the heart of Medicaid that makes the program a reliable and high-quality source of coverage for everyone it serves."

Related: The Devil in the Details: Examining CMS's Medicaid Block Grant Proposal

The Association for Community Affiliated Plans (ACAP) did credit CMS with including several modernizations in the proposal, including "an option to offer continuous eligibility for enrollees for up to 12 months" and a requirement that participating states measure the quality of care delivered.

However, ACAP said HAO's spending caps represent a "structural flaw" to the proposal, which would "inject more uncertainty into state budgets."

"This uncertainty would leave people vulnerable to significant cuts in the event of a natural disaster, high-cost medical innovations, or an unanticipated event such as the recent outbreak of coronavirus," Margaret A. Murray, CEO of ACAP, said in a statement. "What’s more, this initiative allows states to walk away from actuarial soundness provisions, which assure that states pay health plans enough so they can cover all mandated services."

Related: Tennessee Unveils First-Of-Its-Kind Block Grant Proposal for Medicaid

Outside of the potential effects on health insurance coverage, Medicaid policy experts at Avalere said HAO represents a "significant departure from the long-standing policy" of how state programs manage prescription drugs.

Avalere said states could develop prescription drug formularies like commercial health plans and potentially exclude certain drugs from health insurance coverage.

The Trump administration's Medicaid block grant initiative did receive support from a prominent House Republican.

Rep. Greg Walden, R-Ore., is the Ranking Member on the House Energy and Commerce Committee and issued a statement Friday morning applauding CMS' proposal to "modernize and preserve" the Medicaid program.

"Entrenched special interests have launched the typical, rhetorical attacks," Walden said in a statement. "This reflexive reaction is all too common; we should all be reviewing the proposal and listening to the feedback. We do know this, the ‘Health Adult Opportunity’ proposal gives our states the flexibility to respond to the specific needs of their constituents. This is how our republic was intended to work, the federal government working in harmony with the states.” 

Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.

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