Hospitals: CMS sacrificing patient access for state burden relief

Doctor pausing with a frown on his face
The hospital industry is pushing back against a Trump administration proposal to ease access monitoring requirements. (Getty/Wavebreakmedia)

Hospital groups are nearly unanimous in their opposition to a Trump administration policy that would require them to accept lower Medicaid payment rates without a review of the consequences or even industry input.

In March, the Centers for Medicare & Medicaid Services (CMS) proposed exempting the 17 states with an overall Medicaid managed care penetration rate of 85% or greater from most access monitoring requirements, which the agency said was in a move to reduce state burdens. 

Under the proposed rule, payment reductions of less than 4% during a state fiscal year, or 6% over two consecutive years, would not be subject to access monitoring analysis. In addition, CMS wants to exempt states from seeking public input before making rate changes.

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Currently, states are required to conduct a review every three years to ensure Medicaid beneficiaries have access to certain services like behavioral health, primary care and specialty care. 

States have raised concerns about the administrative burden associated with such requirements and have urged the agency to consider whether access monitoring is a beneficial use of state resources, especially for those with few Medicaid members enrolled in fee-for-service programs.

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The agency has contested that rate changes would be "unlikely" to adversely impact Medicaid beneficiaries' access to care. But in comments to the CMS, the industry begged to differ. 

America's Essential Hospitals (AEH), which represents safety-net hospitals, said the rule would cause some providers to flee the Medicaid program.

"When Medicaid rates fall, many providers either cannot afford or choose not to treat Medicaid patients," the group said in a letter. "Those that do often are forced to shift the unreimbursed Medicaid costs onto other payers."

AEH added that a lack of public comment would remove "the only vehicle left for providers to challenge state payments." 

The Association of American Medical Colleges also urged the CMS to not finalize the proposal.

"Permitting these reductions without any meaningful analysis, public input or supporting documentation may cause significant issues for beneficiaries," the group said in a letter.

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The Federation of American Hospitals warned that states could implement a 12% rate reduction over a span of four years without monitoring the impact of such rate changes. 

The Medicaid and CHIP Payment and Access Commission, a nonpartisan legislative agency and adviser to Congress, expressed similar concerns.

The groups conceded that although the policy changes would reduce regulatory burden for states, such a benefit does not outweigh patients' access to care.

Comments on the proposed rule were due last week, and the final rule is expected later this year.