The American Hospital Association’s Response to New Regulatory Landscape
The American Hospital Association (AHA) recently offered their viewpoints on the proposed rules affecting Medicaid and Children’s Health Insurance Program (CHIP) managed care, as well as the fee-for-service (FFS) delivery systems. They asserted to the Centers for Medicare & Medicaid Services (CMS) that these new regulations would have a significant impact on the current regulatory environment for Medicaid and CHIP programs.
Despite appreciating the overall direction of these proposals, the AHA expressed apprehension over the possible risk to states’ access to essential financial resources. They cited the CMS’s plan to further tighten state sources of Medicaid funding and impose additional attestation requirements on hospitals as potential hazards. The AHA urged CMS to consider using the average commercial rate as the upper payment for state-directed payments to hospitals, opposing any more restrictive upper payment options.
The AHA also highlighted the need for states to analyze and disclose the comparison between rates for certain crucial services and Medicare FFS rates. However, they advised against assuming the adequacy of Medicare FFS rates. They pointed out that Medicare underpayments to providers exceeded $75 billion in 2020, stressing that this analysis should be seen as a part of a larger review on the impact of provider payment on beneficiaries’ access to care.
Welcoming Proposals, Addressing Challenges
In recent communications, the AHA has been particularly supportive of certain specific proposals. They welcomed plans for states to regularly publish fee-for-service rates transparently, breaking down the rates by geography, population, and provider type. They also agreed with proposals for states to conduct a “threshold access analysis” that should approximate 80% of Medicare rates, and to improve oversight of home- and community-based services.
While supporting CMS’s direction with these propositions, the AHA also recognized that states are currently under considerable strain. As they embark on the largest eligibility redeterminations in the program’s history, it is imperative to maintain a balance between reform and state capacity.
Balancing Eligibility Redetermination with Access Improvement
The AHA encouraged CMS to remain considerate of eligibility redetermination efforts. They suggested that further information, such as comparisons with Medicare fee-for-service rates, is needed to understand provider payment rates better. As new proposals and rules reshape the Medicaid and CHIP landscape, a balanced approach that addresses access, finance, and quality is crucial to ensuring healthcare access for all beneficiaries.
Benefits of comprehensive comparisons with Medicare fee-for-service rates:
More Informed Policymaking: These comparisons can provide policymakers with the data they need to make informed decisions about future regulations and improvements.
Enhanced Rate Transparency: This practice promotes transparency, which can lead to improved trust and understanding between service providers, beneficiaries, and regulators.
Assessment of Financial Adequacy: By evaluating the payment rates against those of Medicare, the adequacy of payments for services can be assessed, ensuring fair compensation and financial sustainability for service providers.
Improved Access to Care: If payment rates are adequate and sustainable, providers are more likely to continue offering essential services, enhancing beneficiary access to care.
Potential to Adjust Underpayment Issues: By identifying instances where underpayment may be occurring, corrective measures can be taken to adjust these issues, ensuring that providers receive adequate compensation for their services.
Better Insight into Market Trends: Comparing provider payment rates with Medicare fee-for-service rates can reveal market trends and disparities that need to be addressed.
