Medicaid fee-for-service

On March 22, 2018, the Centers for Medicare and Medicaid Services (CMS) announced a notice of proposed rulemaking (NPRM) that would, if finalized, exempt states with high rates of Medicaid beneficiaries in managed care plans from monitoring and reporting requirements related to Medicaid service access set forth in 42 C.F.R. §§ 447.203 and 447.204. The regulations currently require states to analyze and document the impact of Medicaid fee-for-service (FFS) payment amounts on beneficiary access to covered health care services in access monitoring review plans (AMRPs) submitted to CMS.

States’ AMRPs must, using a data-driven process, address the impact of Medicaid FFS payments on beneficiaries’ access to the following categories of Medicaid services: primary care services, physician specialist services, behavioral health services, pre- and post-natal obstetric services, and home health. The state must update and submit the AMRP related to these service categories to CMS at least every three years. If a state reduces Medicaid FFS rates for services outside of these categories, the state must include those additional services in the AMRP and publicly monitor the rate reductions for three years.

Since the adoption of these requirements, several states have complained that the scheme imposes an undue administrative burden and that it is not an efficient use of limited state program resources. In response, the proposed rule’s changes to the regulations would allow the following:

  • An exemption from most access monitoring requirements for states with an overall Medicaid managed care penetration rate of 85% or greater (currently, 17 States).
  • An exemption from the specific access analysis for reductions to provider payments below the “nominal payment rate change” of 4% in overall service category spending during a state fiscal year (and 6% over two consecutive years).
  • A state to submit an assurance that its baseline data “indicates current access is consistent with requirements of the Social Security Act,” rather than be required to predict the effects of proposed Medicaid FFS rate reductions or restructurings on access to care.

This NPRM aligns with the Trump Administration’s push to “cut the red tape” and to generally reduce states’ administrative burdens under federal programs. The proposed changes are also consistent with CMS’s other efforts to enable states to focus on patient outcomes rather than processes in administering their Medicaid programs, as quantified in the agency’s estimates that the proposed changes will eliminate 561 administrative hours and save a total of $1.66 million for the affected states.

Comments on the proposed rule are due to CMS no later than May 22, 2018.