Proposed Changes to Medicaid Access Rule Could Lead to Deep Cuts in EPSDT Services

We have been busy working on our comments on the proposed rule that would make significant changes to the Medicaid Access Rule. As my colleague, Andy Schneider, wrote last month, one of the major changes in the proposed rule is to allow states to make fee-for-service payment cuts of 4% a year (6% over two years, 12% over four, etc.) without reviewing their impacts on access and regardless of whether the payment rates being cut are already too low.

Under the proposed rule, the 4% and 6% thresholds would apply to “overall service category spending.” The service categories are those generally defined under sections 1905(a)(1) through (29) of the Social Security Act. EPSDT, the Medicaid pediatric benefit, is in the same overall service category as nursing facility services, family planning services and supplies, and tobacco cessation services for pregnant women.

Using national FY 2016 expenditure reports from MBES/CBES, we modeled a 4 percent payment reduction to the overall service category containing EPSDT. As shown in the table below, national expenditures for medical assistance in this service category were roughly $41.85 billion, with nursing facility services accounting for $41 billion of the total. A 4% reduction in payments in this service category would represent almost double the total spending on EPSDT screening. This leaves a lot of room for payment cuts (10%, 20%, etc.) with no serious consideration of access to medically-necessary care for children.

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Children rely on Medicaid to access needed health care, be healthy and ready to learn in school, and for financial security. Children’s health care providers rely on Medicaid payments to enable them to provide needed care. The proposed rule has the potential to expose EPSDT providers to deep payment cuts. We can see how that would harm children’s access to care, but we can’t see how that would help improve it.

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