Provider groups are concerned that a HCFA move to exempt Medicaid managed-care plans from a guarantee of adequate payments will result in even lower reimbursements for providers, particularly in states that are implementing healthcare reform measures.
Several groups met with HCFA officials last week in Washington to persuade them not to exempt managed-care programs from the Boren amendment, a federal law that requires states to pay "reasonable and adequate" Medicaid rates.
The groups also hope to use the amendment dispute to examine how HCFA ensures that all provider reimbursement rates set by federal and state governments are adequate.
Several individuals who attended the meeting said HCFA officials made no assurances that they would change their plan.
For several years, state governors have called for the repeal, or at least a significant loosening, of the Boren amendment. The measure is named after retiring Sen. David Boren (D-Okla.) and was passed to ensure that reimbursement rates under Medi-caid are high enough to make it economically feasible to care for Medi-caid patients. It covers both hospitals and nursing facilities.
Providers in several states have used the Boren amendment to successfully sue for higher payments.
With the growing movement toward managed-care programs for Medicaid patients, states have stepped up their efforts to weaken the measure.
At a meeting earlier this year with provider groups, including the American Hospital Association, HCFA first disclosed its intention to issue proposed exemption for managed-care plans by year-end.
The provider groups argue that if states are not forced to pay a reasonable reimbursement rate, it will become impossible for providers to cover Medicaid patients without taking huge losses.
"If payment rates for managed-care organizations are too low, many providers who predominately serve Medicaid and uninsured patients will no longer be able to survive, or the quality of care they provide will begin to deteriorate," provider groups wrote in a letter to HCFA.