CMS seeks to roll back Medicaid rule it says is burdensome to states

Medicaid on paper and a stethoscope
The Centers for Medicare & Medicaid Services is seeking to roll back Obama-era rule on Medicaid payment rates that the agency says is outdated. (Getty/designer491)

The Trump administration proposed rolling back a 2015 rule that requires states to document whether Medicaid fee-for-service payment rates were enough.

The Centers for Medicare & Medicaid Services (CMS) said in a proposed rule (PDF) Thursday that the requirement installed by the Obama administration has created an undue burden on states, especially as Medicaid beneficiaries shift from fee-for-service to managed care.

“We believe mandating states to collect the specific information as described excessively constrains state freedom to administer the program in the manner that is best for the state and Medicaid beneficiaries,” the proposed rule said.

The 2015 rule required states to create an access monitoring review plan that must be updated every three years, CMS said in a press release Thursday.

States must use the review plan to collect data on Medicaid fee-for-service payment rates for various services such as primary care, behavioral health, specialist and home health.

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The Obama-era rule also requires states to use data from the plan when applying for a change to provider rates or state plan amendments. Numerous states have complained to CMS about the 2015 rule, the agency said.

“For example, the rule only applies to services delivered through fee-for-service programs, while the majority of Medicaid beneficiaries are now served through managed care,” the agency said in the release.

States with a small fee-for-service population were burdened with devoting “a significant amount of staff resources” to develop and maintain the review plans, the rule said. The plans also weren’t well-suited for such states because the plans don’t factor managed care beneficiaries.

“Even states with limited managed care enrollment have raised concerns about what they consider to be burdensome standards and unsustainable processes,” the rule said.

Back in March 2018, CMS published a proposed rule that exempted states with at least 85% of their Medicaid population in managed care from the plan requirements. Commenters to that 2018 rule told CMS that it believed the exemption amount of 85% was arbitrary, so the agency decided to change its approach.