Medicaid Final Rule Aims to Ensure Equal Access to Care

Stay ahead of developments in federal and state health care law, regulation and transactions with timely, expert news and analysis.

By Nathaniel Weixel

Oct. 29 — A long-awaited final rule from the CMS (RIN 0938-AQ54; CMS-2328-FC) aims to ensure states pay providers adequate Medicaid rates so that beneficiaries have access to the same providers as the rest of the population.

However, an attorney who represents hospitals told Bloomberg BNA in an Oct. 29 interview the rule “is a travesty” for hospitals and won't do anything to fix the problem of Medicaid's inadequate payment rates. Hospitals will continue to lose money on Medicaid, because the final rule only focuses on very broad measures of access and doesn't address payment rates at all, said Mark Gallant, an attorney with Cozen O'Connor in Philadelphia.

The rule, which will be published in the Federal Register Nov. 2, doesn't require states to adjust their payment rates. Instead, states will be required to collect specific data to demonstrate to the Centers for Medicare & Medicaid Services that beneficiaries have access to covered services “at least comparable to others in the geographic area.”

According to the CMS, the final rule requires states to develop an “access review plan” that sets out the data elements and other information to be used to ensure beneficiary access to mandatory and optional services; to establish new procedures to review the effects on beneficiary access of proposed rate reductions and payment restructuring; and to implement ongoing access monitoring reviews of key services.

Hospitals Excluded

However, hospitals were not included on the list of service categories for which states should monitor access. America's Essential Hospitals, which represents mostly community safety-net systems, said it was disappointed.

“Hospitals that serve many Medicaid patients—essential hospitals—provide a lifeline for vulnerable people. We must ensure payment policies do not create obstacles to their care,” Bruce Siegel, president and chief executive officer of the group, said in a statement. “We hope CMS re-evaluates this provision and adopts measures to protect vulnerable patients' access to essential hospitals.”

The rule was first proposed in 2011, but the agency said it has been changed to reflect stakeholder comments, as well as the outcome of a court case earlier this year.

The CMS said the final rule will increase the information available to the agency to ensure that rates meet Medicaid statutory requirements. The rule is effective Jan. 4.

Payment and Access

Gallant told Bloomberg BNA the CMS “refuses to acknowledge” the link between access to services and adequate payment. Medicaid payment is lower than Medicare, and in some cases reimbursement is so low that providers won't accept patients because it's too expensive for them to do so, Gallant said.

For the CMS, the rule shows “a blindness [to the fact] that providers don't participate [in Medicaid] because reimbursement rates are so low,” he said.

Critical access hospitals have said that if current payment rates were to continue, supplemental funding would be needed to make up for any shortfalls, whether care is delivered in fee-for-service or a managed care system. In a letter sent to the CMS in April urging release of the final rule, America's Essential Hospitals noted the agency has been reluctant to exercise its authority to enforce state compliance with paying the Medicaid rates set by the agency. 

The hospitals acknowledged that since the CMS doesn't usually like to rely on supplemental payments, it needs to require states meet the statutory payment standard as part of the state end of the Medicaid bargain. Gallant said the final rule doesn't come close to doing that.

Even if access issues are discovered as a result of the analysis that is required under this rule, states may be able to resolve those issues through means other than increasing payment rates, the CMS said. The rule merely requires that beneficiary access must be considered in setting and adjusting payment methodologies for Medicaid services.

“If a problem is identified, any number of steps, including payment increases, might be appropriate to address the problem,” the CMS said. The CMS said the rule allows for the agency to review whatever access issues states say they encounter, and “describes a more consistent and transparent way for states to collect and analyze the necessary information to support such reviews.”

Armstrong Case

The CMS's role in ensuring that Medicaid pays adequate rates is especially important in the wake of a recent U.S. Supreme Court decision that prohibits Medicaid providers from suing state officials over insufficient payment levels.

In Armstrong v. Exceptional Child Ctr., Inc., the court March 31 found Medicaid providers can't sue to force states to increase Medicaid payments for covered services.

“The lack of a private right of action underscores the need for stronger non-judicial processes to ensure access, including stronger processes at both the state and federal levels for developing data on beneficiary access and reviewing the effect on beneficiary access of changes to payment methodologies,” the CMS said.

The final rule includes a 60-day comment period for stakeholders to tell the CMS about additional approaches the agency and states should consider to ensure better compliance with Medicaid access requirements.

“Specifically, we are interested in obtaining information on core access to care measures and metrics that could be used to measure access to care for beneficiaries in the Medicaid program (including in fee-for-service and managed care delivery systems) and used to develop local, state and national thresholds and goals to inform and improve access in the program,” the CMS said in the request for information (CMS-2328-NC) document. Comments are due Jan. 4.

To contact the reporter on this story: Nathaniel Weixel in Washington at

To contact the editor responsible for this story: Brent Bierman at


Request Health Care on Bloomberg Law