On July 11, 2019, CMS released a proposed rule that would rescind certain state reporting requirements relating to Medicaid (the Proposed Rule) that potentially could make it easier for states to reduce Medicaid benefits and expenditures. Under Section 1902(a)(30)(A) of the Social Security Act, a state Medicaid agency is required to ensure that its state plan makes payment that is “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.” CMS issued a final rule in 2015 in which it adopted requirements for compliance with this provision. The Proposed Rule would rescind certain requirements and provide states with more “flexibility.” The Proposed Rule was published today in the Federal Register. Comments are due by September 13, 2019.

The CMS 2015 final rule instructed states to document their compliance with Section 1902(a)(30)(A) by submitting to the agency an access monitoring review plan (AMRP), that is updated at least every three years, for the following services: (1) primary care (including those provided by a physician, federally qualified health center, clinic or dental care); (2) physician specialist services (for example, cardiology, urology, radiology); (3) behavioral health services (including mental health and substance use disorder); (4) pre- and post- natal obstetric services, (including labor and delivery); (5) home health services; (6) any additional types of services for which a review is required under §447.203(b)(6) because of a proposed payment rate reduction or restructuring; (7) additional types of services for which the state or CMS has received a significantly higher than usual volume of beneficiary, provider or other stakeholder access complaints for a geographic area; and (8) additional types of services selected by the state. The 2015 rule also required states to go through a process of notice and comment before adopting a state plan amendment (SPA) that would restructure payment rates in any of these categories, and to submit documentation to CMS that would show that any changes to payment rates would not harm beneficiary access to care.

The Proposed Rule would rescind these requirements and would provide states “flexibility” to provide CMS with other forms of data would document a SPA’s compliance with Section 1902(a)(30)(A). The Proposed Rule does not purport to change the substantive network adequacy requirement under Section 1902(a)(30)(A), although CMS is separately considering a proposal to revisit these requirements for Medicaid managed care plans. However, because there is no private right of action under Section 1902(a)(30)(A), and CMS is the only enforcement authority, this proposal may give rise to a concern that a rescission of the reporting requirements would, as a practical matter, permit state Medicaid agencies to depart from the statutory requirement for adequate payments for Medicaid providers. Hospitals are advised to track the Proposed Rule and to be aware of the possibility that, if the Proposed Rule takes effect, it may impact the health care services offered under Medicaid in some states.