Summary of Medicaid and CHIP Payment-Related Provisions: Ensuring Access to Medicaid Services (CMS 2442-P) and Medicaid and Children’s Health Insurance Program (CHIP) Managed Care Access, Finance, and Quality (CMS-2439-P)

Summary of Medicaid and CHIP Payment-Related Provisions

Ensuring beneficiaries can access covered services is a critical function of the Medicaid and CHIP programs and a top priority of the Centers for Medicare & Medicaid Services (CMS). The two proposed rules Ensuring Access to Medicaid Services (Access NPRM) and Managed Care Access, Finance, and Quality (Managed Care NPRM), outlined in this fact sheet, include both proposed changes to current requirements and newly proposed requirements that would advance CMS’s efforts to improve access to care, quality, and health outcomes, and better promote health equity for Medicaid beneficiaries across fee-for-service (FFS) and managed care delivery systems, including for home and community-based services (HCBS) provided through those delivery systems, and for CHIP beneficiaries. Medicaid and CHIP are the nation’s largest health coverage programs. If adopted as proposed, these rules would build on Medicaid’s already strong foundation as an essential program for millions of families and individuals, especially children, pregnant people, older adults, and people with disabilities.

These proposed requirements are intended to increase transparency and accountability, standardize data and monitoring, and create opportunities for states to promote active beneficiary engagement in their Medicaid programs. CMS’s proposed rules address a range of access-related challenges that affect how beneficiaries are served by Medicaid across all of its delivery systems and benefits. Public comments are requested on the Notices of Proposed Rulemaking (NPRMs), including in response to specific questions articulated throughout the publications.

States must make Medicaid provider payments in FFS systems sufficient to enlist enough providers to ensure beneficiaries have sufficient access to covered care.[1] A decrease in payment rates could reduce the number of providers participating in Medicaid, and lessen the quality and availability of care. In managed care programs, states develop and pay capitation rates to their contracted managed care plans, which then pay providers for the care they render to enrollees. Like FFS programs, if managed care plans’ provider payment rates are insufficient to support robust network development, network adequacy and access to care can be directly impacted. Currently, it is challenging for CMS, the public, and other interested parties to understand how Medicaid payment levels affect access to care.

In the proposed requirements, CMS seeks to increase the transparency of FFS provider payment rates, update and standardize the requirements for states to submit documentation about proposed payment rate reductions or restructurings, and improve the public comment process for changes to payment rates. The proposed rule would remove the requirement for states to submit access monitoring review plans and replace them with alternative procedures that strive to promote payment rate transparency, standardize information across states, and decrease burden through targeted rate review. The new requirements for states would include:

• Publishing and regularly updating Medicaid FFS payment rates for all services on a state website that is accessible and easy for the public to use.
• Every other year, publishing an analysis that compares Medicaid and Medicare payment rates for critical services, including primary care, obstetrical and gynecological services, and outpatient behavioral health. To achieve a high level of granularity within the analysis, if a state varies its payment rates, the analysis must separately compare rates paid to providers based on population (children and adults), different provider types, and different geographic locations in the state.
• Every other year, publishing a disclosure of the average hourly rate paid to direct care workers providing certain HCBS: personal care, home health care, and homemaker services. This information would separately disclose rates for individual direct care providers and direct care providers employed by an agency.
• Establishing an advisory group for interested parties to advise and consult on provider rates for direct care workers. The advisory group would include, at a minimum, direct care workers, beneficiaries and their authorized representatives, and other interested parties.
• Demonstrating that any state plan amendment proposals to reduce provider payment rates or restructure provider payments will not put access to care at risk. CMS would have a two-tier analysis system, whereby States would need to provide a more extensive Access analysis (discussed below) if any of the following conditions are not met:
  • Aggregate Medicaid payment rates are at or above 80 percent of the most recently published Medicare payment rates.
  • Changes to Medicaid payment rates result in no more than a 4 percent reduction in aggregate FFS Medicaid expenditures for each affected benefit category during the state fiscal year.
  • Public processes do not raise significant access-to-care concerns from beneficiaries, providers, or other interested parties; or, if these parties do raise concerns, the state is able to address them.
• Providing detailed information that will enable CMS to evaluate the possible effects on access to care of any rate reduction or restructuring proposal that does not meet the above conditions, including a comparison of relevant Medicaid and Medicare payment rates; three years of data on the number of actively participating providers, beneficiaries receiving services, and services furnished (including an analysis of related trends) for the services that would be affected by the rate change or restructuring; and estimates of how the changes would affect access.

In the managed care NPRM CMS proposes to:

• Require states to submit an annual payment analysis that compares managed care plans’ payment rates for routine primary care services, obstetrical and gynecological services, and outpatient mental health and substance use disorder services as a proportion of Medicare’s payment rates.
• Require states to submit an annual payment analysis that compares managed care plans’ payment rates for homemaker services, home health aide services, and personal care services as a proportion of the state’s Medicaid state plan payment rate. There will be a 60-day comment period for the notices of proposed rulemaking, and comments must be submitted to the Federal Register no later than [date 60 days after date of NPRM publication in the Federal Register]. For more information on how to submit comments or to review the entire proposed rules, visit the Federal Register.

###