Our readers may remember our discussion of the ongoing saga surrounding enforcement of the entitlement to Medicaid. We have covered it several times before (here and here) on this blog. Aside from discussing the topic because it allows us to flex our legal muscle with italicized case names, we also believe it’s critical for our readers to understand how Medicaid entitlement has evolved over time. Today, we discuss a proposed rule recently published by the Center for Medicare and Medicaid Services that raises some interesting legal considerations regarding the enforceability of § 1902(a)(30)(A), also referred to as the “equal access” requirement. In short, the proposed rule would reduce the administrative burden for states that is associated with the process for documenting whether Medicaid payments in fee-for-service (FFS) systems are sufficient to enlist providers to assure beneficiary access to covered care and services.
Under § 1902(a)(30)(A) of the Social Security Act, states are required to “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” (equal access requirement). CMS has historically relied on state certifications and available supporting information that Medicaid payment reductions met the equal access requirement.
This changed on November 2, 2015 when CMS published a final rule with comment period that imposed a data-driven process for states to meet their statutory obligations under the equal access requirement. Under this data driven process, referred to as the “Access Monitoring Review Plan” (AMRP), states must empirically support their determination of whether beneficiaries have sufficient access to care. States must update the AMRP at least every three years for eight different categories of services, such as primary care, behavioral health, home health services, and additional types of services selected by the state. At a minimum, the AMRP must document the specific measures that the state uses to analyze access to care (e.g. time and distance standards, provider participation in Medicaid, providers with open panels, providers accepting new Medicaid beneficiaries, service utilization patterns, identified beneficiary needs, data on beneficiary and provider feedback and suggestions for improvement, etc.).
According to CMS, many states with high rates of comprehensive, risk-based managed care complained about the administrative burden associated with the AMRP requirements during the first year of implementation. Now CMS believes that certain changes to its AMRP regulations are warranted based on its implementation experience thus far.
To address the administrative burden described above, CMS is proposing to establish a threshold over which certain states with high managed care enrollment will be exempt from submitting an AMRP (managed care exemption). States with an overall comprehensive, risk-based managed care enrollment rate of 85 percent or greater would be exempt. Moreover, states qualifying under the managed care exemption would not be required to conduct a public process and access analysis for payment reductions as required under current regulations. Instead, these states would need to submit alternative information supporting compliance with section § 1902(a)(30)(A). In the proposed rule, CMS solicits comments on the types of alternative data and analysis that states may present to support compliance with the statute.
Furthermore, CMS is proposing to codify a broader exemption to the proposed rate reductions or restructuring procedures in § 447.203(b)(6). For this exemption to apply, states do not need to have high rates of managed care enrollment. Rather, the exemption applies for payment reductions within a state plan service category that are less than 4 percent of overall spending on the category within a single state fiscal year, and less than 6 percent over 2 consecutive state fiscal years. CMS believes that changes below this 4 percent threshold (nominal reductions) are generally unlikely to diminish access to care. CMS solicits comments on whether the threshold should be higher or lower.
Finally, CMS is proposing that states will not be required to provide a detailed analysis of the changes’ effect on access. CMS states that their experience has shown these analyses are limited in their accuracy and usefulness due to inherent uncertainties. CMS believes that the monitoring and corrective action provisions in the regulations ensure that access remains undiminished after a payment rate change goes into effect. CMS also believes that the public input process for payment reductions in excess of the 4 percent threshold will help it understand the potential effects of any proposed changes. Therefore, CMS is proposing to instead require that states submit an “assurance that current access is consistent with the requirements of § 1902(a)(30)(A) at the time of the SPA submission, and the baseline data that supports this assurance.”
Many Medicaid providers and beneficiaries have reason to be concerned with CMS’ proposal because it may lead to weaker federal oversight of provider payments and access to care.
As alluded to in our previous blog piece, the Supreme Court dramatically curtailed the use of the federal Civil Rights statute to enforce federal law against the states in Gonzaga v. Doe. Appellate courts across the country thereafter interpreted Gonzaga as meaning that § 1902(a)(30)(A) could not be enforced via § 1983 because § 1902(a)(30)(A) does not confer a “right” to providers. (See e.g., Long-Term Care Pharmacy Alliance v. Ferguson, 362 F.3d 50 (1st Cir. 2004); Sanchez v. Johnson, 416 F.3d 1051 (9th Cir. 2005)). Then, in Armstrong v. Exceptional Child Center, 135 S. Ct. 1378 (2015), the Supreme Court also effectively foreclosed enforcement of the equal access requirement under the Supremacy Clause of the United States Constitution. Therefore, to the extent that a state Medicaid program violates § 1902(a)(30)(A), it appears that solely CMS is responsible for providing the appropriate remedy: the withholding of federal funds.
In response to these court decisions, CMS promulgated the November 2015 rule discussed above that established the AMRP. But in doing so, CMS clarified that “provider and beneficiary challenges are not available to supplement CMS’ review and enforcement” pursuant to the AMRP regulations. In other words, the AMRP gives CMS a framework under which to evaluate whether a state Medicaid proposal is compliant with the equal access requirement, but it should not be interpreted as giving beneficiaries or providers a cause of action for seeking judicial review.
Now that the proposed rule exempts some states from the AMRP and other related provisions, however, some providers, beneficiaries and their advocates may be concerned that there is insufficient federal oversight to ensure states comply with the equal access requirement. And without a clear avenue for seeking judicial review, federal oversight is really all that’s left.
Providers and patient groups should be sure to provide input on CMS’ proposed rule, particularly on the question of what “alternative information” will replace the requirement to submit an AMRP. The public comment period closes at 5:00pm on May 22, 2018.
 “Methods for Assuring Access to Covered Medicaid Services—Exemptions for States with High Managed Care Penetration Rates and Rate Reduction Threshold,” 83 Fed. Reg. 12696 (March 23, 2018).