Bipartisan Group of Medicaid Directors, AMA, MACPAC and Stakeholders Issue Urgent Pleas for More Medicaid Help for Safety Net Providers

Those of us who have worked on Medicaid for years have a running joke about Medicaid being the missing “M” in the acronym CMS – which stands for the federal Center for Medicare & Medicaid Services. Medicare has always been the big dog on the block – both in terms of political clout, size and attention. And to be fair, Medicare is a federal program whereas Medicaid is a joint federal-state endeavor, so it is a lot easier for the federal government to make changes to Medicare.

This dynamic has changed somewhat over the past five years, as Medicaid’s role as a health insurer and the backbone of our public health care system continues to grow, the number of Medicaid enrollees surpasses the number of Medicare enrollees, and Medicaid expansion becomes a prominent and popular issue in many state-level elections.

However, the current COVID-19 pandemic has unleashed a very dangerous new chapter in this long history of Medicaid being overlooked – the lack of funding flowing to providers who normally serve a large number of patients covered by Medicaid and therefore rely on the program for much of their reimbursement but are on the sidelines now as they are not directly on the frontlines of the COVID-19 pandemic. This has the potential to inflict long term damage on a fragile safety net that provides care to tens of millions of Americans, including more than a third of our nation’s children. The providers that Medicaid supports are particularly important to children in minority communities, who have been disproportionately impacted by the harm of the pandemic.

There have been quite a few stories in the media about pediatricians who have seen their office visits plummet. We have heard from our friends at the American Academy of Pediatrics that many of their members are seeing huge declines in revenue – well over half of their practice has vanished. Other providers who are experiencing these kinds of challenges include community health centers, behavioral health and substance abuse providers, home care providers, children’s hospitals, rural health centers, maternal health providers, school-based health providers and other providers serving low-income patients.

My colleague Andy Schneider blogged about the bigger picture with respect to Congressional inaction and the need for more federal funding for Medicaid in the form of a higher matching rate (FMAP). More FMAP is clearly needed given Medicaid’s role in the eye of both the public health and the economic storms. But there is another immediate problem with respect to the sustainability of providers who rely on Medicaid for a good deal of their revenue.

Congress established a Provider Relief Fund (which has a cumulative $175 billion) and gave the Secretary of HHS wide latitude on how to distribute it. So far the funds distributed have been sent out based on Medicare spending, and then on total revenues, to Medicare providers. Manatt Health has done excellent work explaining the new Provider Relief Fund and its distribution so far, which appears to have largely ignored Medicaid providers – at least for those who are not serving dually-eligible Medicare and Medicaid beneficiaries.

A hard hitting letter from the National Association of Medicaid Directors underscores how serious the situation is. NAMD is a bipartisan group representing the state Medicaid Directors who do the work of running the program and the letter itself is signed by NAMD’s leadership from two red states – Florida and Arizona. The letter does not mince words with respect to their frustration with the Trump Administration’s handling of the funds, dispensing with any niceties up front and starting out by NAMD requesting:

  • The Department’s immediate engagement with Medicaid Directors to facilitate expeditious distribution of Congressionally-appropriated funds to critical Medicaid providers. This distribution must occur within the next two weeks. (emphasis added).
  • Greater transparency from HHS on the specific funding amounts awarded to specific providers which in turn will inform state decisions on additional fiscal relief.

Another strong letter on the need to fund Medicaid providers was sent by the American Medical Association to CMS earlier this week. The AMA historically has not devoted much attention to advocating for Medicaid over the years – but things have been changing there too. And the letter includes a stark warning:

“We are concerned that without immediate financial assistance, the safety net that these Medicaid practices provide may not survive and our nation will lose a vital and critical part of our health care infrastructure.”

Other stakeholders calling for urgent action include:

Children’s Hospital Association:

“…the COVID-19 pandemic has created catastrophic financial damage threatening the essential role children’s hospitals play in the future of our country. The COVID-19 relief allocations provided by HHS this past week to children’s hospitals have mitigated only a fraction of this damage. While an essential start, continued relief is needed to offset the growing damage of COVID-19 on children’s hospital operations including personnel cuts and possible reduction of essential clinical and community programs serving children and families.”

Association for Community-Affiliated Plans (ACAP):

“We call on the Department of Health and Human Services (HHS) immediately to use funding enacted in the Coronavirus Aid, Relief, and Economic Security (CARES) and Paycheck Protection Program and Health Care Enhancement (PPHCE) Acts to provide one month of revenue to all Medicaid providers to ensure their solvency as Medicaid enrollment skyrockets due to the surge in unemployment…. This funding will increase the likelihood that Medicaid providers will remain solvent to provide much needed services to the up to 23 million additional people who are expected to enroll in Medicaid over the next year due to the surge in unemployment. As we collectively look forward to the end of the pandemic, it will be critical that Medicaid provider networks remain strong to ensure ongoing access to care into the future.”

Medicaid and CHIP Payment and Access Commission (MACPAC):

“… funds made available under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, P.L. 116- 136) are not providing sufficient assistance to health care providers that are solely or predominately focused on serving Medicaid beneficiaries. While we appreciate the difficulty of making payments quickly during this time of crisis, it is troubling that so little relief has been offered to those health care professionals and facilities that care for the nation’s most vulnerable residents. Lack of attention to these providers may do permanent damage to the nation’s health care safety net.”

Time is of the essence. As NAMD pointed out, Medicaid provider networks are particularly fragile therefore we must work hard to preserve them for the low-income children and families, people with disabilities and elderly whose health and well-being depends upon them.

Joan Alker is the Executive Director of the Center for Children and Families and a Research Professor at the Georgetown McCourt School of Public Policy.