Hospital groups react to Medicaid access and payment rules

CMS published two final rules on April 22 designed to expand access in the Medicaid fee-for-service and managed care programs. 

Here is what three hospitals groups said about the rules: 

America's Essential Hospitals: We thank [CMS] for standing by its plan to permit states to set Medicaid managed care payment rates at levels equal to those paid by commercial plans to providers of the same service.

The average commercial rate represents fair market value for services essential hospitals provide. For too long, care provided to Medicaid beneficiaries has been undervalued. Allowing managed care plans to pay providers average commercial rates takes an important step toward ending these historical inequities.

But we are deeply concerned by CMS' surprise reversal of its long-standing policy to allow states to separately fund payments targeted at essential hospitals and other provider classes. Instead, the agency will require states to combine these targeted payments into general managed care funding, which creates troubling disincentives for plans to direct patients away from essential hospitals.

Because Medicaid payments are jointly financed by states and the federal government, it is important that states continue to use all permissible sources of Medicaid financing, including provider taxes. Although we disagree with CMS' proposed reinterpretation of current provider tax rules, we appreciate its decision to delay the new financing attestation requirement until 2028.

American Hospital Association: The AHA appreciates that CMS acknowledges the critical role hospitals play in state Medicaid financing and the importance of supplemental payments to sustain beneficiary access to care in light of low Medicaid base payment rates, including rates paid through managed care organizations. In particular, we applaud CMS' recognition that hospitals treat all patients the same — regardless of coverage — by formally adopting the average commercial rate as the upper payment limit as advocated by the AHA. Codifying this provision ensures that hospitals have appropriate resources to serve Medicaid patients and strengthen America's safety net. The AHA also appreciates CMS' efforts to streamline the approval of certain existing arrangements, which will cut down on bureaucracy and burden and allow hospitals to focus on their patients.

Additionally, we thank CMS for listening to our concerns by delaying enforcement of the attestation provision as the various courts evaluate this issue. Though we remain concerned that the policy could result in financing restrictions that could have consequences for patient coverage and access, we appreciate the agency is preventing any confusion and unnecessary burden that could result from implementing the policy before these legal processes finish.

Finally, the AHA applauds CMS' efforts to strengthen network adequacy requirements and oversight. The finalized provisions represent common sense approaches to ensuring Medicaid beneficiaries enrolled in a managed care health plan can access the services they need. We look forward to continuing to work with CMS, states and other stakeholders as they seek to implement new network adequacy standards.

Federation of American Hospitals: FAH believes that our nation's most vulnerable patients must have access to vital hospital care and the Medicaid Managed Care final rule works toward that goal by strengthening network adequacy and oversight, helping ensure enrollees have access to healthcare providers in their communities.  

Despite CMS' decision to require attestation of provider tax and state-directed payments in the final rule, we appreciate the agency delaying enforcement until 2028. This additional time will allow providers to focus on caring for Medicaid enrollees 24/7 while the legal process challenging the agency's authority to implement this provision plays out. Unfortunately, if fully implemented, this action could undermine access to critical services for our most vulnerable patients.

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