A Closer Look at CMS’s Proposed Rule to Improve Access to Care in Medicaid and CHIP

Editor’s Note: Since this post was published, CCF submitted formal comments on both the Medicaid Access and Managed Care proposed rules. 

The Biden Administration recently proposed two new rules on access to care in Medicaid and CHIP. The rules have long, formal titles: “Medicaid Program: Ensuring Access to Medicaid Services” and “Medicaid Program: Medicaid and Children’s Health Insurance Program Managed Care Access, Finance, and Quality.” But for our purposes, let’s call the first one “the access rule” and the second “the managed care rule.” This blog aims to summarize the access rule, though I’m sure there will be more to say as we and others comb through both rules and think about them in concert. We’re planning to post a series of blogs related to these two rules, so please check back for more information over the coming weeks.

In February 2022, CMS issued a request for information (RFI) on access to care and coverage for people enrolled in Medicaid and CHIP, and in December 2022, CMS summarized the responses.

The access proposed rule marks the next step in their regulatory process, and it includes changes to three main areas: (1) Payment for Services, (2) Medicaid Advisory Committees, and (3) Home and Community-Based Services. Generally, the effective date for the proposed changes would be 60 days after publication of the final rule, with longer time frames for those provisions that would require more time to implement.

Payment for Services

The Medicaid statute requires states to set provider payment rates so as to enlist enough providers to offer services at least to the extent that such services are available to the general population in the area. In furtherance of that statutory requirement, CMS finalized an access rule in 2015 that required states to develop and submit an access review monitoring plan (ARMP, to be updated every 3 years) and undertake a public process prior to reducing or restructuring Medicaid payment rates. In 2019, CMS proposed rescinding the 2015 access rule and issued an informational bulletin stating the agency planned to establish a new access strategy, but the rescission was never finalized. Still, this left states in regulatory limbo, and removed any incentives for states to invest resources in developing and using AMRPs. CMS posted states 2016 plans, but the website does not mention the 2019 plans.

The proposed rule would rescind the requirement to submit and update ARMPs and instead require states to publish FFS payment rates and conduct a payment rate analysis comparing base Medicaid payment rates to Medicare rates for primary care, OB/GYN services, and outpatient behavioral health services by January 1, 2026. The analysis must also include the number Medicaid-paid claims and the number of Medicaid-enrolled beneficiaries served each year.

For HCBS, the state would be required to disclose: the payment amounts on an average, hourly payment rate basis; the number of claims paid; and the number of services rendered. The state would also be required to form an “interested parties” advisory group to advise and consult with the Medicaid agency on current and proposed rates for direct care workers.

Before CMS would approve rate reductions or restructuring, the state would have to show that the new Medicaid payment rates in the aggregate (including base and supplemental payments) would be at or above 80% of the comparable Medicare rates. This is similar to recent §1115 demonstration approvals setting 80% of Medicare as the minimum standard for some Medicaid payment rates.

A state seeking approval for a rate reduction/restructuring would have to show that the new rates would meet new, proposed standards: (1) new Medicaid rate at least 80% of comparable Medicare rate, (2) total rate reduction under 4% in aggregate FFS Medicaid expenditures, and (3) the required public process yielded no significant access concerns that the state was unable to address. If a state cannot meet these standards, additional rate analyses would be required as a condition of approval. CMS would be able to disapprove the state’s proposed changes or withhold payment for failure to comply.

Medicaid Advisory Committees

Under current law, states are required to have medical care advisory committees (MCACs) to advise the state about health and medical services. They typically consist of physicians and other health care providers, consumer advocates, and state agency staff. The federal MCAC standards are broad, and the effectiveness of the MCACs to gather Medicaid enrollee feedback varies across states. Pennsylvania’s model has garnered some national attention because it has a subcommittee comprised entirely of Medicaid enrollees, facilitated by the Pennsylvania Health Law Project, that meets before each MCAC session to make sure that enrollee experiences inform Medicaid operations and policy development in a meaningful way.

The proposed rule draws on lessons learned in states such as Pennsylvania by requiring states to have a beneficiary-only group (the Beneficiary Advisory Group, or BAG), comprised of current and former Medicaid beneficiaries and their family members and caregivers, that must meet separately from the full Medicaid Advisory Committee (MAC). Under the proposed rule, the MAC membership must still include clinical providers or administrators, consumer advocacy groups or direct service workers, and state agency staff, but the MACs would also have to include at least 25% BAG members and managed care plans (in states that use managed care).

The proposed rule would make other important MAC changes too, so stay tuned for a more in-depth analysis by my colleague Leo Cuello soon. The MAC changes would be effective 120 days after publication of the final rule.

Home and Community-Based Services

The Medicaid statute requires states to offer long term services and supports (LTSS) in institutional settings, but home and community-based services (HCBS) are optional. States have many different options to choose from when setting up HCBS programs, including under Medicaid state plan and waiver authorities and through FFS or managed care delivery systems. Most states do a combination of these things, with different programs tailored to meet the needs of different populations. The Kaiser Family Foundation has an excellent summary of state policy choices as of 2022.

The proposed rule would make a series of changes to HCBS including efforts to make care provided more person-centered. The proposed rule would also establish a new grievance system for HCBS and a new “incident management” system, following alarming reports of widespread and serious gaps in basic health and safety practices. States would be required to routinely evaluate HCBS payment adequacy, aiming to address workforce shortage issues, and to report on standardized quality measures. The HCBS-related access changes would be effective 2-4 years after publication of the final rule.

This is just our first look at the access rule, and I’m sure we’ll uncover more interesting tidbits as we continue to digest its provisions and think about how it would change current law and practice. We’ll also be thinking about how this rule interacts with the managed care rule and lift up any recommendations we made in our response to the CMS Access RFI that are not already reflected. Comments will be due around July 2, 2023, so there’s no time to waste!

Kelly Whitener is an Associate Professor of the Practice at the Georgetown University McCourt School of Public Policy’s Center for Children and Families.