Healthcare Business News

Rule seeks to address conflicting court decisions on Medicaid reimbursements

By Rich Daly
Posted: April 29, 2011 - 4:00 pm ET

CMS officials may have kept the Supreme Court from injecting itself into the controversy over disparate state Medicaid payment rates for various providers through a proposed rule (PDF) issued Friday.

The rule would require states to perform an analysis of their provider payment systems under their fee-for-service Medicaid programs to determine if their payment rates have created “access issues.” However, even if such access problems are discovered “states may be able to resolve those issues through means other than increasing payment rates,” according to the explanation of the proposed rule.

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The proposed rule came after the Supreme Court announced earlier this year that it would consider one of growing number—and sometimes conflicting—federal court rulings regarding the right of states to cut reimbursements for hospitals, physicians and other healthcare providers as part of efforts to close recent budget deficits. The federal rule explicitly acknowledged that it is in response to those lawsuits.

“These decisions have left states without clear and consistent guidelines and have subjected them to considerable uncertainty as they move forward in designing service delivery systems and payment methodologies,” according to the proposed rule.

For the first time, the rule would require states to “periodically monitor” enrollee needs, the availability of care and providers, and the utilization of services in their Medicaid programs to determine if it provides sufficient access to care. That information would be available for the public and the CMS to review. A separate process is already in place to monitor access to care in Medicaid managed care plans.

The proposed rule would allow states to resolve any provider access problems discovered through various steps, including “redesigning service delivery strategies, improving provider enrollment and retention efforts.”

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