As Congress debated health care reform, many people criticized the expansion of Medicaid as an illusory promise to expand care. In many states there is a Medicaid access crisis. Beneficiaries have trouble accessing care because providers refuse to treat them. And in communities where the numbers of Medicaid beneficiaries and the uninsured are high, providers like private hospitals, physicians, and other specialty centers are fleeing the community altogether.
The federal government has a critical role to play in fixing this problem, but the latest health care reform law does not signal a serious commitment by federal goverment to use its power in that way.
One of the biggest sources of this Medicaid access crisis has been low payment rates, and in response to budget crises, states are cutting rates even further. This crisis was acknowledged by the authors of the Patient Protection and Affordable Care Act, and the new law does include one improvement: the Act increases Medicaid payments for primary care services provided by primary care doctors (physicians with a primary specialty designation of family medicine, general internal medicine, or pediatric medicine) to 100% of the Medicare payment rates. The reality, however, is that this isn't enough.
While this may help improve primary care somewhat, it doesn't help Medicaid beneficiaries who need on-going specialty care for chronic conditions, rehabilitation, or surgical care. Other Medicaid providers, including many specialists, dentists, pharmacies, and hosptials, are reimbursed at rates that are less than Medicare and, in many cases, far below their costs. There should be parity in reimbursement for these providers as well.
The new law also fails to establish a clear, transparent process for states to follow in setting rates. While federal law establishes certain general factors that must be considered by states, states retain essentially total discretion to establish their own payment methodologies, prioritize among various criteria, and set the rates. There is no uniform procedure or methodology outlined that states must follow to minimize disparities or ensure the adequacy of rates.
It is disappointing that the new law doesn't do a better job of expressly remedying this problem. Nonetheless, the federal government can still try to address the problem through its administrative oversight of the Medicaid program: it has always had this power and the new law doesn't change this.
First, the federal Medicaid Act requires states to consider factors, such as access and quality of care, in setting payment rates for providers. Payment rates must be sufficient to ensure that enough providers will participate in the program so that Medicaid patients will have meaningful health care access. Many states clearly violate these procedural and substantive requirements, which have led to a number of lawsuits discussed in my prior post, California Lawsuit Evidence of Medicaid Access Crisis.
Second, the Medicaid Act requires states to submit their plans for Medicaid administration, including payment rates, to the federal government for approval. CMS (the Centers for Medicare and Medicaid Services), is the division of the U.S. Department of Health Services that administers Medicaid. CMS has the authority and duty to review state plans for compliance and can reject plans that violate any of these conditions. In addition, prior law created something called the Medicaid and CHIP Payment and Access Commission, also known as MACPAC. One of MACPAC's duties is to review Medicaid and CHIP payment policies to determine what factors and methodolgies are used to set payments and to assess the impact of these on access and quality of care for Medicaid and CHIP beneficiaries, specifically, as well as for health care delivery generally.
The problem is that there has been no meaningful federal oversight of state administration of Medicaid or response to evidence of the harmful impact on health care access and quality. Despite blatant defects in states' processes, the federal government has essentially been hands-off, approving plans without real scrutiny. Just as states must comply with certain federal requirements in the Medicaid Act, the federal government must also be held accountable for its oversight obligations under this Act. CMS has a clear legal duty to protect Medicaid beneficiaries and providers by ensuring that a state's Medicaid plan and administration is fair and transparent, and that it facilitiates, rather than undermines, health care access.
So the question remains: Will Medicaid expansion really improve health care access? The answer depends, in part, on the willingness of the federal government to meaningfully review state Medicaid plans and to use its oversight power to enforce federal access protections. But history shows us that this is not very likely.
