Some providers say states such as Oklahoma and North Dakota may be cutting Medicaid rates by as much as 25% and 47% respectively, as a way to cover up how much future payment cuts would affect beneficiaries.
In a letter to the CMS (PDF), the American Academy of Pediatrics, American College of Physicians, American Medical Association and American Osteopathic Association say they believe the states may be dropping their rates now in anticipation of new rules that require the states to assess how payments affect access to care.
There is “deep concern over the disturbing trend of states cutting Medicaid payment rates," providers said in letter, adding that they believe it is calculated. "Drastic cuts such as these will harm children, adolescents and adults and almost certainly cause clinicians to stop accepting Medicaid enrollees into their practices.”
The rule requires each state to establish a monitoring and review plan. The CMS gave states a four-month extension until Oct. 1 to submit those plans because states said they needed more time.
The providers say the CMS should insist states use 2014 payment rates as a baseline. That way, if a state cuts rates in the coming years, the agency has a more accurate picture of the impact of those cuts.
“We just want to make sure states aren't gaming the system,” said Robert Hall, associate director of federal affairs at the American Academy of Pediatrics.
The providers argue that slashing rates repels providers. For instance, when North Carolina reduced rates by 23% in 2015, about 25% of pediatricians surveyed by the state's pediatric society said they began limiting the number of new Medicaid patients they would accept.
Experts say the providers are raising valid concerns that the CMS should address.
Mark Gallant, co-chair of the healthcare practice at the law firm Cozen O'Connor and former deputy general counsel for the CMS, said the agency must set payment floors.
Jane Perkins, legal director of the National Health Law Program, said the CMS must step in and ensure state compliance, especially since the Supreme Court last year ruled that providers cannot sue state Medicaid agencies over low reimbursement rates.
For their part, Oklahoma and North Dakota say the proposed cuts are being made to comply with state balanced budget laws and not in response to the rule-making.
“Oklahoma is experiencing a significant revenue shortfall, resulting in anticipated decreased appropriations to state agencies,” said Nico Gomez, CEO of the Oklahoma Health Care Authority, the state's Medicaid agency known as the OHCA. “The only area the OHCA can cut that would result in the savings needed to balance our budget is provider rates.”
LuWanna Lawrence, spokeswoman for the North Dakota Department of Human Services, made similar remarks.
A CMS spokesperson did not respond to a request for comment.