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Short Analysis
May 2018

The Trump Administration Continues Its Attack on Medicaid by Dramatically Weakening the Equal Access Rule

The Trump administration is proposing a policy that would weaken protections for people in the program and lead to diminished access to critical services, particularly for people with high health care needs who get coverage through Medicaid. The proposed rule--recently released by the Centers for Medicare and Medicaid Services (CMS) and currently open for public comment--represents yet another attempt by the administration to water down critical federal oversight and protections for people in the Medicaid program. 

CMS is accepting comments until May 22nd. We strongly urge advocates in states with managed care penetration between 75-85 percent--Utah, New York, Pennsylvania, Indiana, West Virginia, California, Minnesota, Virginia, Missouri, South Carolina--to tell CMS not lower the threshold even further and detail the impact the rule will have on access to care for in fee-for-service, particularly for vulnerable populations. NHELP prepared this template to help advocates prepare comments. Submit comments here.

The rule changes the way the federal government monitors and ensures access to services paid for through a “fee-for-service” delivery system. Many states pay for care through a mix of managed care and fee-for-service, with different services and eligible populations getting care via different delivery systems. No matter how providers are paid, however, federal law requires payment rates be set such that access to care for Medicaid enrollees be comparable and available at least to the extent it is to the general population. This is often known as the Equal Access provision of Medicaid law.

The Medicaid Equal Access rule will disproportionately affect states that high rates of managed care enrollment

The rule seeks to amend the current equal access rules and, among other changes, recommends loosening federal oversight responsibilities when states with high rates of overall managed care enrollment reduce payments made through fee-for-service delivery system. According to CMS, currently 18 states (including DC) would meet the 85 percent managed care enrollment threshold set out in the rule, although this number will grow quickly as states continue to move more of their Medicaid population into managed care. It would also exempt states from current access monitoring and reporting requirements if fee-for-service rate cuts are less than 4 percent in one year (or 6 percent over 2 years).

These changes are particularly harmful in light of the 2015 Supreme Court decision, Armstrong v. Exceptional Child, which puts oversight for Medicaid payment rates squarely with CMS and outside the reach of the courts. Without rigorous access and monitoring by the federal government, enrollees and providers have no formal recourse when access problems arise. This means that payments made via fee-for-service in predominantly managed care states would have no federal oversight either via the courts or via CMS if the rule were finalized as currently proposed.

While research shows that most primary care doctors and specialists accept Medicaid, the subject of provider participation and whether Medicaid enrollees have sufficient access to care remains a subject of controversy and an oft-cited conservative critique of the program. Rates that are too low discourage providers from treating Medicaid-enrolled patients, and this rule would allow states to more easily cut rates without oversight from the federal government.

This rule will have particularly harsh consequences for high-need, vulnerable people, because these are the Medicaid-covered people most often covered fee-for-service even in states with high overall managed care enrollment. People often “carved out” of managed care include people dually eligible for Medicare and Medicaid, medically fragile children, and people using substance use disorder services. These populations need more, not less, oversight from the federal government to ensure their access to critical services is preserved and strengthened.

This rule represents yet another attempt by the administration to water down critical federal oversight and protections for people in the Medicaid program

We particularly encourage advocates in high managed care penetration states to comment on the impact of the rule in their state. According to CMS, states with fee-for-service payments that would be exempt in the proposed rule because they have greater than 85 percent overall enrollment in managed care are Tennessee, Hawaii, Nebraska, New Jersey, Kansas, Delaware, Arizona, Iowa, Florida, Louisiana, Texas, Kentucky, Rhode Island, Maryland, Oregon, New Mexico, Ohio, Washington, and D.C.

CMS sought comment on whether it should lower the exemption threshold even further—to 75 percent. We strongly urge advocates in states with managed care penetration between 75 - 85 percent--Utah, New York, Pennsylvania, Indiana, West Virginia, California, Minnesota, Virginia, Missouri, South Carolina--to tell CMS not lower the threshold even further and detail the impact the rule will have on access to care for in fee-for-service, particularly for vulnerable populations.