Press release

CMS Proposes Regulation to Alleviate State Burden

CMS Proposes Regulation to Alleviate State Burden
Proposed rule furthers President Trump’s commitment to “cutting the red tape” by relieving states of burdensome paperwork requirements

Today, The Centers for Medicare & Medicaid Services (CMS) issued a notice of proposed rulemaking (NPRM) that would provide state flexibility from certain regulatory access to care requirements within the Medicaid program. Specifically, the NPRM would exempt states from requirements to analyze certain data and monitor access when the vast majority of their covered lives receive services through managed care plans. CMS regulations separately provide for access requirements in managed care programs. Additionally, the NPRM would provide similar flexibility to all states when they make nominal rate reductions to fee-for-service payment rates.

States have raised concerns over undue administrative burden associated with meeting the requirements of the final rule, Medicaid Program; Methods for Assuring Access to Covered Medicaid Services (published in November 2015). Specifically, states with few Medicaid members enrolled in their fee-for-service program or when members are only temporarily enrolled, and states making small reductions to fee-for-service payment rates, have urged CMS to consider whether analyzing data and monitoring access in that program is a beneficial use of state resources. To respond to these concerns, the NPRM proposes the following changes:

  • States with an overall Medicaid managed care penetration rate of 85% or greater (currently, 17 States) would be exempt from most access monitoring requirements.
  • Reductions to provider payments of less than 4% percent in overall service category spending during a State fiscal year (and 6% over two consecutive years) would not be subject to the specific access analysis..
  • When states reduce Medicaid payment rates, they would rely on baseline information regarding access under current payment rates, rather than be required to predict the effects of rate reductions on access to care, which states have found very difficult to do.

This notice furthers President Trump’s commitment to “cut the red tape” and is part of a series of initiatives aimed at helping states focus more resources and time on patient outcomes in their Medicaid programs. In a speech to the National Association of Medicaid Directors last year, CMS Administrator Seema Verma emphasized CMS’s commitment to “turn the page in the Medicaid program” by giving states more freedom to design innovative programs that achieve positive results for the people they serve. In total, the proposed changes are estimated to reduce state administrative burden by 561 hours with a total savings of over $1.6 million.

These proposed regulatory changes do not change the underlying statutory responsibilities for states to ensure that Medicaid recipients have appropriate access to services. These efforts are instead designed to support CMS efforts to move away from micromanaging state programs and instead focus on measuring program outcomes and holding states accountable for achieving results.

“Today’s proposed rule builds on our commitment to strengthening the Medicaid program and assist those it serves through state partnerships that improve quality, enhance accessibility and achieve outcomes in the most cost effective manner,” said CMS Administrator Seema Verma. “These new policies do not mean that we aren’t interested in beneficiary access, but are intended to relieve unnecessary regulatory burden on states, avoid increasing administrative costs for taxpayers, and refocus time and resources on improving the health outcomes of Medicaid beneficiaries.”

In a March 14, 2017 letter to Governors, the Department of Health and Human Services and CMS announced a new commitment “to empower all states to advance the next wave of innovative solutions to Medicaid’s challenges – solutions that focus on improving quality, accessibility, and outcomes in the most cost-effective manner.”

For more information regarding CMS 2406-P: Methods for Assuring Access to Covered Medicaid Services – Exemptions for States with High Managed Care Penetration Rates and

Rate Reduction Threshold, and to make a comment regarding the proposed rule, please visit (https://www.medicaid.gov/medicaid/access-to-care/index.html)

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