By Sara Rosenbaum

Background

Access to health care has been a prime focus of the Medicaid program since it’s enactment in 1965. A key aim of the Medicaid statute has been to integrate Medicaid beneficiaries into the general health care system, affording them insurance coverage that would enable them to secure care from the participating provider of their choice in a manner similar to that enjoyed by privately insured individuals and Medicare beneficiaries.^[1] It is evident, however, that despite Medicaid’s enormous achievements, access to “mainstream” medical care has remained elusive. Medicaid beneficiaries continue to receive a disproportionate amount of health care from “safety net” providers such as community health centers, public hospitals, and free clinics, while private physicians participate in Medicaid to a much more limited extent. Physicians considered Medicaid “high-share” and “moderate-share” participants are more likely to be located in lower income communities and to work at community health centers and public hospitals. High-share physicians, who comprise 19% of all primary care physicians, the overwhelming majority report accepting all or most new Medicaid patients. But 80% of Medicaid low-share or no-share primary care physicians accept no new Medicaid patients into their practices.^[2] Specialty care represents a particularly serious challenge for Medicaid patients; similarly, long-term care remains segregated, with Medicaid beneficiaries disproportionately represented in nursing homes that are more likely to have been identified and sanctioned for poor performance.^[3]

In 1989, Congress amended the Medicaid statute to strengthen its access requirements. Section 1902(a)(30)(A) of the Social Security Act provides, in pertinent part, that state Medicaid plans must “. . . assure that payments are consistent with efficiency, economy, and quality of care and are 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.” Since 1989, however, the U.S. Department of Health and Human Services (HHS) has provided no comprehensive regulatory interpretation of the law that explains how state compliance with Section 1902(a)(30)(A) is to be implemented or measured. In recent years, the Centers for Medicare and Medicaid Services (CMS) has requested additional information from states in evaluating proposed provider payment rate changes under its existing federal provider payment rules. CMS also has asked states for assurances that access would not be affected by payment reductions. CMS notes that “only a few states indicated that they relied upon actual data to make the determination.”^[4] According to the agency, states tend to rely on “historical levels of provider enrollment and their belief that providers would not disenroll based on a reduction in payments.”^[5] CMS further notes that states tend to lack a systematic approach to gather data on the access impact of rate cuts or measure impact on an ongoing basis.^[6]

The issue of provider payments and their impact on access also has been extensively litigated in the courts.^[7] In fall 2011, the United States Supreme Court is expected to hear a case that raises the question of whether the Constitution permits beneficiaries and providers to bring judicial challenges to state Medicaid provider payment reductions that threaten to reduce access to care.^[8]

Furthermore, in its first Report to Congress, the Medicaid and CHIP Payment Advisory Commission (MACPAC) focused on Medicaid and access to health care. MACPAC recommended use of an “access framework” to assess access to primary and specialty care providers and services; the framework consists of “three main elements: enrollees and their unique characteristics, availability of providers, and utilization.”^[9] Under this framework, multiple factors become important: enrollee characteristics (e.g., where they live, cultural diversity, family income, health needs); provider availability and participation in Medicaid; and actual use of health care.^[10]The report also notes that access must be measured “in terms of the appropriateness of services and settings for care; efficiency, economy, and quality of care; and overall health outcomes.”^[11]

Changes Made by the Affordable Care Act

The Affordable Care Act (ACA) expands Medicaid eligibility to an estimated 16 million additional persons, bringing renewed attention to Medicaid’s basic obligation on states under §1902(a)(30)(A).

Implementation

Agency and Key Dates 

On May 6, 2011, CMS published a proposed rule^[12] implementing Section 1902(a) (30)(A); the public comment period closes on July 5, 2011. The proposed rule amends existing Medicaid regulations governing provider payment to add requirements designed to more clearly delineate federal expectations regarding states’ responsibilities under Medicaid’s access law. The proposed rule contains the following key elements:

• Access reviews. The proposed rule would revise current Medicaid payment method rules^[13] to require that, in addition to documenting payment rates, state Medicaid programs must document access to care. Specifically, a state Medicaid agency would be required to “record and update, medical assistance access reviews for each covered benefit” in accordance with new federal requirements.^[14] Medical assistance access reviews must be published or “promptly made available” to the public, and furnished to CMS on request.
  • In their access reviews, states “must document using data trends and factors, an analysis that demonstrates sufficient access to care, considering, at a minimum”^[15] (i) the extent to which enrollee needs are met; (ii) the availability of care and providers; and (iii) changes in beneficiary utilization of covered services.
  • The access review also must include (A) beneficiary information^[16] (through hotlines, surveys, ombudsman, or “another equivalent mechanism”)^[17] and (B) access review Medicaid payment data (defined as the payment percentile of Medicaid payments in relation to estimated average customary provider charges as well as estimated Medicare payments or commercial payments, or Medicaid allowable costs for services). Furthermore, where the state proposes to revise payment rates, the state review also must include “an estimate of the composite average percentage increase or decrease resulting from any proposed revision in payment rates.”^[18]
• Form, timing, and basis of the access review. State access reviews must explain their methods and must review all covered services at least once every 5 years.^[19] The proposed regulation does not prescribe minimum data measures for nationwide, uniform use.^[20]
• Reviews that reveal “access issues.” “[I]n circumstances when changes could result in access issues,” the agency must submit the results of its access review along with any proposed state plan amendment to reduce or restructure provider rates. The access review, which must conform to the proposed access review requirements, must have been completed within the past 12 months and “. . . must demonstrate sufficient access for any service for which the state agency proposes to reduce payment rates or restructure provider payments in circumstances when the changes could result in access issues.”^[21] The state also must continue to monitor access to care “after the state plan service rate reduction or payment restructuring.”^[22]
• Beneficiary input. States must have “ongoing mechanisms” for “beneficiary input on access to care (through hotlines, surveys, ombudsman, or another equivalent mechanism).”^[23]
• State obligations where “access issues” exist. If a state’s access review or monitoring procedures “determine access issues, regardless of whether the issue would indicate non-compliance with the statutory standard” [emphasis added], the state agency must submit a corrective action plan to address the issue within 90 days of discovery.^[24] The goal for remediation should be “no longer than 12 months” even if the plan includes longer term measures as well.
• Special procedures to accompany state proposals to reduce or change provider payments. States that propose to reduce or restructure provider payments must specifically assess the impact on access. A state must: (i) submit an access review pertaining to the services for which rate reductions are planned; (ii) monitor access on an ongoing basis; (iii) allow for beneficiary response and “maintain a record” of such responses; and (iv) submit an analysis “reflecting consideration of the information and procedures.”^[25] The proposed rule specifies that submission of rate reductions or modifications without such an analysis and procedural steps may result in disapproval of the state plan amendment as well as compliance actions outlined in federal regulations, such as a partial withholding of federal funding otherwise due the state.^[26]
• Public notice. Current rules require that state agencies provide public notice of “significant” changes in payments and methods. The proposed rule would permit states to use electronic communication using a web site “developed and maintained by the single state agency . . . that is accessible to the general public.” If a state website is used, it must be updated regularly, with a date of release of the initial publication, and with preservation of the initial publication in its original proposed form.^[27]
• Compliance costs. CMS estimates modest state costs associated with the regulation. In the agency’s view, each access data review will cost slightly more than $18,000, with an entire estimated annual cost for state reviews of slightly more than $900,000. Ongoing access monitoring would cost slightly less than $90,000 annually for affected states, beneficiary feedback mechanisms, slightly less than $230,000 for all states, and annual corrective actions about $37,000 annually for all affected states.^[28]

Key Issues

• Omission of managed care. CMS notes that because managed care is governed by separate statutory and regulatory requirements, its standards apply only to the fee-for-service portion of state Medicaid programs.^[29] Half of all Medicaid beneficiaries are in risk-based managed care arrangements; this figure rises to over 70% if all forms of managed care are included. Nothing in the Medicaid statute exempts such arrangements from the requirements of §1902(a)(30)(A). Will CMS develop access review standards governing managed care?
• Absence of nationally uniform access measures. The proposed rule permits state Medicaid programs to develop their own access measures as long as they adhere to the MACPAC access framework. CMS’ rationale for this decision rests in part on the local variability of conditions that collectively shape health care access. Is it important, however, that federal and state policymakers be able to understand how comparable local conditions yield different access results? As Medicaid moves toward more uniform eligibility standards for the poorest adults, should access measures be similarly uniform?
• What is a “significant” change in payment methods and standards? The current rule requires public notice when “significant” changes in payment standards are proposed. The term “significant” is not defined. CMS specifically asks for public comment on the question of whether the term “significant” should be retained or eliminated in favor of a more universal comment requirement, particularly in light of the agency’s decision to allow electronic posting of information at a controlled state agency website.
• A focus on geographic patterns? The proposed rule focuses on enrollee needs and provider availability for Medicaid beneficiaries, but the statute itself focuses on availability in relation to other populations with a geographic area. How will the final rule address the relational test set forth in the statute?
• Provider participation goals. The proposed rule is designed to gather important information about access, but does not set any outcome goals for provider availability. Will the final rule address access outcomes of state policy interventions to remedy access issues?
• Where will state data come from? CMS notes a variety of possible data sources but also allows states to develop their own data on beneficiary characteristics, use of services, and provider participation. How will states approach these data development responsibilities and what types of technical information might be made available on a sub-regulatory basis? Is the cost of data development assumed in CMS’ estimates regarding the cost of the rule?
• Remedies for beneficiaries and providers. CMS proposes a system under which federal approval of rate cuts is conditioned on certain procedural steps, including an access review of the services whose payment rates are to be cut, ongoing monitoring, mechanisms for beneficiary input, and a remediation plan if access is an “issue.” States that proceed with rate cuts in the absence of such a review risk state plan amendment disapproval and compliance actions including the partial or full loss of federal financial participation. If a state nonetheless proceeds with a provider rate reduction that implicates access, in advance of the CMS review process, might other CMS remedies be available? Would beneficiaries and providers be expected to pursue private remedies in the courts? If this is the case, then what might be the impact be of a Supreme Court decision in Maxwell-Jolly barring private actions in such circumstances?

Recent Agency Action and Authorized Funding Levels

The proposed rule was issued on May 6, 2011, and the comment period closes July 6, 2011. Medicaid is a statutory entitlement with mandatory spending; therefore, funding levels are not an issue.