Medicaid transparency push riles state officials

A federal push for more transparency in how states run their Medicaid programs is pitting patient advocates and medical providers against state officials who fear being hamstrung.

The transparency effort comes as states seek ever greater flexibility in how they manage their Medicaid programs to cope with historic budget woes. Federal regulators have expressed sympathy for states’ concerns, but they are also required to answer Congress’s calls for more public information about what states are up to.

{mosads}“The idea that Washington has to control everything because states can’t be trusted to act in the interest of their own citizens frankly is an insult to the states,” said Dennis Smith, secretary of the Wisconsin Department of Health Services.

Advocates, however, say a dearth of rules has allowed states to get away with major changes to programs on which millions of vulnerable people depend with very little oversight.

“Going back quite some time we had been complaining that the … process was very closed to the advocacy community, both on the state level and on the federal level,” said Julie Ward, director of health policy for The Arc, an advocacy group for people with disabilities. “It’s been a long-standing problem but it’s only been with these recent struggles with the Medicaid budget that provider cuts and such are on the table as much.”

Federal regulators are seeking more transparency on two levels, both of which have sparked concerns among state officials.

Last September, the Centers for Medicare and Medicaid Services (CMS) proposed regulations to promote transparency and public notice procedures when states seek to waive federal requirements to test such Medicaid innovations as managed care. The federal government has been raising concerns with so-called 1115 waivers since at least 2002, when a Government Accountability Office report brought up “both legal and policy concerns” with the process.

“Opportunity for the public to learn about and comment on pending waivers has not been consistently provided,” GAO found.

The calls for greater transparency were included in the healthcare reform law. They’ve received some pushback from states, notably the proposed requirement that states provide the public at least 30 days to comment on a proposed waiver before an application is submitted to CMS.

“Review of a draft application is not necessary for members of the public to have a ‘meaningful level’ of input at the state level,” a consortium of 13 states argued in comments to CMS.

The regulatory process has since stalled, prompting three dozen advocacy groups to ask CMS to speed things up.

“Given that many states are already discussing Medicaid waivers,” they wrote to CMS Administrator Don Berwick in April, “we hope that you will make finalizing these important regulations a top priority.”

An even greater concern for states has been CMS’s separate effort to require states to document the potential impact of proposed cuts to payment rates for doctors and hospitals. Federal law requires Medicaid beneficiaries to have good access to medical care, and advocates say deep cuts — including California’s request for an across-the-board 10 percent cut — would violate the law because many providers would quit the program.

Congress did not explicitly require action on rate justifications, but a new Medicaid payment-and-access commission created in 2009 recommended action in its March 2011 report to Congress.

“States lack the guidance that they need to understand the types of information that they are expected to analyze and monitor,” the proposed regulation states. The result, CMS said, has been a flurry of lawsuits from providers and widespread uncertainty about what states are supposed to do.

Republican state officials say the proposal would cripple states’ ability to negotiate Medicaid payment rates.

“Ultimately these are [state officials’] decisions to make,” Wisconsin’s Smith said. “If providers know, ‘Well I’m going to get whatever I can out of you and then whatever I don’t get I’ll run to the feds to get the rest,’ it really ties your hands in trying to negotiate in good faith.”

Virginia Secretary of Health and Human Resources Bill Hazel agreed.

“Any regulations on our ability to set rates would essentially be inhibiting the [Virginia legislature]’s ability to set rates, which is what they do,” Hazel told The Hill. “What we are faced with now with the new potential regs is a situation where instead of flexibility, we’re being told that you have to do all these studies.”

“It’s the time as much as the process,” he added. “You’ve got a 60-day [state legislature] period. Suppose the feds don’t like what you’re trying to do: How does it work?”