AHA Addresses Challenges and Proposals to Improve Medicaid and CHIP

July 3, 2023

AHA comments on two new rules designed to improve Medicaid, CHIP, and FFS delivery systems

The American Hospital Association (AHA) recently addressed two proposed rules related to access, finance, and quality in the Medicaid and Children’s Health Insurance Program (CHIP) managed care and fee-for-service (FFS) delivery systems. In their comments, the AHA told the Centers for Medicare & Medicaid Services (CMS) that, “the regulations advance many important policies that will reshape the regulatory landscape for the Medicaid and CHIP programs.”

However, when the AHA addressed the rule on managed care, they expressed concern that certain policies may jeopardize states’ access to critical financial resources. An example cited was the CMS proposal to “further restrict state sources of Medicaid financing and use hospitals to enforce compliance with CMS’s policy positions through new attestation requirements.” The AHA encouraged CMS to “adopt the average commercial rate as the upper payment for state-directed payments to hospitals, opposing any more restrictive upper payment approaches.

Among its specific concerns, the AHA said it supports requiring states to evaluate and disclose how rates for certain critical services compare to Medicare FFS rates, but cautioned against assuming that Medicare FFS rates are adequate. “Indeed, Medicare underpayments of providers in 2020 totaled more than $75 billion. Instead, this analysis should be viewed as one piece of information as policymakers and stakeholders evaluate the impact of provider payment on beneficiary access to care.”

In a recent letter from the AHA, specific proposals they welcomed included:

· A plan for states to routinely publish fee-for-service rates in a transparent way, with such rates displayed by geography, population and provider type

· States conduct a "threshold access analysis" that should be approximately 80 percent of Medicare rates

· Improved oversight of home- and community-based services

The letter said, “While we are generally supportive of CMS' direction with these proposals, we are mindful that states are under considerable strain right now as they undertake the largest scope of eligibility redeterminations in the program's history.”

The AHA also urged the CMS to be mindful of eligibility redetermination and said more information is needed regarding provider payment rates, for example, by comparing with Medicare fee-for-service rates.