On November 2, 2015, the Centers for Medicare and Medicaid Services (CMS) issued a long-awaited final regulation implementing Medicaid's so-called "equal access" requirement. The rule is an endgame of sorts in a legal saga that began nearly 40 years ago and that, even considering just how complicated Medicaid is, has involved an unusual number of twists and turns. The access rule takes effect on January 4, 2016 following a 60-day comment period.
Primarily a response to the United States Supreme Court's 2015 decision in Armstrong v. Exceptional Child Center, Inc., the final rule focuses on a narrow swath of all Medicaid-financed health care and in doing so, takes modest steps toward creating a stronger evidence base and review process for evaluating the sufficiency of state Medicaid payments in relation to beneficiary access to health care. In so doing, the rule exempts much of the health care Medicaid purchases and avoids establishing national standards for defining access to care.
Legislative And Judicial Background
The final rule implements the "equal access" provision, found at 42 U.S.C. §1396a(a)(30)(A). Enacted in 1989 (Section 6402(a), Pub. L. 101-239 (1989)), this provision was itself the codification of an earlier Medicaid rule virtually identical to the language eventually adopted by Congress. As enacted into law, the equal access provision requires that state Medicaid provider payments be "consistent with efficiency, economy, and quality of care and . . . sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area." A separate "request for information" (RFI) accompanying the rule seeks public input on "data metrics and alternative processes" for measuring access to care.
The final rule emerged 25 years after statutory enactment and four years after it was initially proposed in 2011 — and then proceeded to disappear (76 Fed. Reg. 26342 (May 6, 2011)). The 2011 proposed rule came after years of litigation brought by providers and beneficiaries to halt states from implementing what the challengers alleged were payment standards (often in the form of payment reductions) that violated the law.
Many of these cases eventually lost. But courts not infrequently used their broad powers to temporarily enjoin potentially unlawful conduct while states' actions could be reviewed. This, of course, meant that payment cuts taken in the face of budget reductions were held up in the judicial review process.
In response to what they understandably perceived as unwelcome judicial incursions into their payment decisions, states began to push back, especially those states (Alaska, Arizona, California, Idaho, Montana, Nevada, Oregon, and Washington State) in the jurisdiction of the 9th Circuit U.S. Court of Appeals, which historically tended to use a more plaintiff-friendly standard in evaluating the adequacy of state payment rates. This pushback came in the form of two separate appeals to the United States Supreme Court.
Joined by the Obama Administration, the states argued in both cases that the courts had no legal power to intervene in advance of the Department of Health and Human Services (HHS) review and that Congress had given HHS sole initial oversight of Medicaid payment adequacy. Rather than testing the underlying merits of state payment policies, therefore, the cases that were appealed involved the threshold question and more nuanced question of whether providers have access to the courts at all in the initial stages of a Medicaid payment dispute. The first case, Douglas v. Independent Living Center of Southern California (California), ended inconclusively on the question of advance judicial intervention; on remand, the 9th Circuit ruled in California's favor.
But in the second case, Armstrong v. Exceptional Child Center, Inc., a 5-4 majority held that as drafted, Medicaid's equal access provision bars the courts from early-stage involvement and vests sole discretion in HHS to make the first-level decision about whether a state's payments satisfy the equal access standard. Longstanding principles of administrative law would give providers and beneficiaries a right to judicial review of a Secretarial decision once made, but of course such review happens only after the fact, meaning that payment rates that have the effect of impairing access can take effect, with judicial review only subsequent to implementation. (In its final rule, CMS freely admits that its "policy permits states flexibility to implement approvable rate changes without delay while it undergoes federal review.")
Having succeeded in ending what it considered judicial interference with primary federal agency oversight of state Medicaid rate-setting duties, the Obama Administration found itself, in the wake of its Armstrong victory, without either standards or a formal process for carrying out its rate-setting responsibilities under the law. (Indeed, no Administration ever has put such a review system in place.) It is in this context that the final rule emerged, as CMS noted:
Further delaying this rule could result in confusion as to the application of the access requirement . . . especially given the Supreme Court's decision in Armstrong v. Exceptional Child Center, which specifically stated that providers do not have a private right of action to enforce [the equal access requirement] and that CMS is ultimately responsible for enforcing the statutory requirements. (80 Fed. Reg. 67576, 67581 (Nov. 2, 2015))
What The Final Rule Does And Does Not Do
The final rule is notable not only for what it does, but also, for what it does not do.
What The Final Rule Does Not Do
First, the final rule excludes access reviews for Medicaid managed care arrangements. The logic behind this exclusion might be that proposed Medicaid managed care regulations, issued on June 1, contain relevant provisions regarding both payment and network adequacy. In fact, however, CMS takes matters a step further in its rule with the sweeping statement that the equal access standard itself applies only "to state payments to providers and not to capitated payments to managed care entities." (80 Fed. Reg. 67582.)
This apparent wholesale exclusion of managed care from the equal access framework would appear to leave the 75 percent of all Medicaid beneficiaries who receive treatment through managed care networks without the protection of the equal access standard itself. Furthermore, the decision to exclude managed care creates a situation in which Medicaid providers who furnish care through networks are left without any external objective standard for measuring payment sufficiency (i.e., the amount paid by comparable private health plans for the same service).
Second, the rule similarly excludes waiver and demonstration programs, again, leaving providers and beneficiaries apparently untethered from any external frame of reference for measuring the issue of access in relation to payment. According to CMS, the rationale for this decision is that the agency uses separate waiver- and demonstration-specific standards. But while many demonstrations may involve services and supports that are unique to Medicaid and lack a private sector frame of reference, the exclusion of these arrangements from the rule creates the same dilemma: care arrangements whose accessibility measure has no external objective standards.
Third, even for the services it does cover, the rule contains no standards against which access will be measured. Instead, the rule delegates to states, as discussed below, the responsibility for setting standards and access measures and then engaging in access measurement analyses against those standards. The point of the RFI is to develop possible federal standards, but clearly this will be a long process especially given the agency's admission in the Preamble that it had sought and failed to identify uniform national standards (one cannot help but wonder why beneficiaries in Oregon should have to wait any longer than those in Boston for an urgent care appointment).
Finally, the rule prescribes no remedial actions that will be required—whether before or after rate changes take effect—in the event that its access reviews identify problems. Indeed, CMS explicitly states that its rule "does not prescribe specific state actions to address access to care issues. The rule instead requires procedures that will inform states and CMS of access concerns before [state plan amendment] approval and on an ongoing basis. This information should be useful to state legislators as they make budgetary decisions and is not intended to hamper the legislative process." (80 Fed. Reg. 67583.)
What The Final Rule Does Do
Despite these rather fundamental shortcomings, the rule does advance the ball a bit, by essentially setting up a written, evidentiary framework against which state payment decisions must take place and ensuring that the framework captures both access data and payment data. This framework applies to fee-for-service payments, whether for patients exempt from managed care arrangements entirely or patients who are members of plans but receiving care that has been carved out of a contract and left in the underlying fee-for-service delivery structure. (Presumably the fact that carve-out service delivery and payment arrangements are to be covered by the equal access requirements may hasten their inclusion in contracts, at least in some states.)
But for the time being, even in many states that make extensive use of managed care, key services may continue to be carved out, and of course, in the case of elderly populations and beneficiaries with disabilities, managed care is just coming on line.
In the case of covered payment arrangements, the rule requires each state to develop and publish a "medical assistance access monitoring review plan" that must be made available for public comment (42 C.F.R. §447.203(b)). This review plan must provide an "access monitoring analysis" encompassing:
Data, sources, methodologies, baselines, assumptions, trends and factors, and thresholds that analyze and inform determinations of the sufficiency of access to care, which may vary by geographic location within the state and will be used to inform state policies affecting access to Medicaid services such as provider payment rates. (42 C.F.R. §447.203(b)(1)).
Furthermore, a state's plan must adhere to an analytic framework that considers "the extent to which beneficiary needs are fully met," "the availability of care through enrolled providers to beneficiaries in each geographic area, by provider type and site of service," "changes in beneficiary utilization of covered services in each geographic area," population characteristics, and "actual or estimated levels of provider payment available from other payers, including other public and private payer, by provider type and site of service." (42 C.F.R. §447.203(b)(1)(i)).
In other words, access plans must not only report on a common access framework consisting of beneficiary need, provider availability, use of care, and population characteristics but also must provide geographic-specific comparative payment information (42 C.F.R. §447.203(b)(3)). Furthermore, under the rule, the plan must contain agency recommendations regarding "the sufficiency of access to care based on the review." As noted, because the rule contains no federal access standards, it directs states to set the specific measures they will use to measure access such as time and distance, provider participation, acceptance of new beneficiaries, and beneficiary access and use information (42 C.F.R. §447.203(b)(4)).
The rule specifies that states' access review plans must be developed on a triennial schedule, with separate reviews for primary care (physician, FQHC, clinic, and dental care), physician specialist services, behavioral health services, pre- and post-natal obstetric services including labor and delivery, and home health services. (Ironically, residential treatment for exceptionally disabled children, whose payment sufficiency was at issue in Armstrong, is not one of the types of services for which a triennial access review is a basic requirement).
Finally, the rule requires that states accompany state plan amendments to reduce or "restructure" (undefined) provider payments with access reviews that must to be completed within the preceding 12 months. These special access reviews must be submitted in any case in which payment reduction or restructuring "could result in diminished access," (42 C.F.R. §447.203(b)(6)). (Presumably CMS would have the final say over whether a state plan amendment affecting payment is one that "could" result in diminished access, thereby triggering the review requirement.) Once the state plan amendment is implemented, the state must monitor the impact of the reduction or restructuring for at least three years.
What Does It All Mean?
There is not much substance to the rule, and there are far too many troubling exemptions that basically leave beneficiaries and providers at sea, unmoored from any external objective process or standards by which to measure the reasonableness of access. In carving out entire swaths of care from ongoing review, CMS may leave itself vulnerable to ongoing legal actions challenging its failure to act in the face of evidence of serious access problems, whether in fee-for-service care, managed care, or demonstrations involving long term services and supports. While Armstrong bars direct provider litigation against the states under the equal access provision, as Justice Breyer pointed out in his concurrence, legal action against the Secretary remains permissible
On the other hand, the rule is a step forward of sorts, establishing a framework for evidence-based decision making over payment questions, while better ensuring that this framework and the evidentiary record it is designed to produce will apply to any decision to reduce or restructure the full range of Medicaid provider payments.
Of course, in the end, the fact remains that payment reforms are not the only strategy for improving access by Medicaid beneficiaries. But CMS itself notes that payment strategies that expose beneficiaries to reduce access or care of significantly impaired quality can never be considered "consistent with efficiency, economy, and quality of care." That's a start.
Author's Note
Professor Rosenbaum's Medicaid research is supported by a generous grant from the Commonwealth Fund.
from Health Affairs Blog http://ift.tt/1OT8p3U
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