The Centers for Medicare and Medicaid Services (CMS) recently released a proposed rule that would exempt states with at least 85 percent of their Medicaid population in managed care (currently 17 states) from most access-monitoring requirements for services provided through the traditional fee-for-service avenue. Though California (at 81 percent) does not currently meet the 85 percent threshold, it will likely do so it the near future.

Currently, states are required to analyze, document and report to CMS the impact of Medicaid fee-for-service payment amounts on beneficiary access to covered health care services. The California Medical Association (CMA) is concerned that exempting states from the access monitoring process will result in reduced access for Medicaid beneficiaries. This monitoring remains important for beneficiaries, even as greater numbers move over to managed care, as it ensures the most medically fragile patients continue to have access to care.

Under the CMS proposal, states would also no longer be required to analyze access impacts of provider payment cuts of less than 4 percent (or 6 percent over two consecutive years). Eliminating monitoring activities risks exposing providers to a series of cuts just below these thresholds, further exacerbating the significant underpayment of Medicaid services.

Low reimbursement rates have driven many of California's providers from the Medi-Cal program. Medi-Cal is the largest Medicaid program in the nation, with 13.5 million people—about one-third of the state’s population—enrolled. And yet, California still pays among the lowest reimbursement rates of all 50 states, creating a serious access issue for patients. California’s Medi-Cal rates don’t come close to covering the cost of providing care—meaning that physicians lose money for every Medi-Cal patient they serve. Many providers find that they cannot continue to treat Medi-Cal recipients and maintain a viable practice.

CMA submitted comments on this proposed rule, urging CMS to enforce a true “equal access” standard that ensures rates paid to Medicaid providers are sufficient to ensure that beneficiaries can access to care on an equal basis with the general population. CMA also urged CMS to require states to increase rates paid to providers when access issues are identified.

CMA believes that greater public transparency and accountability in the rate-setting process would help to provide more consistent access to care to the Medi-Cal population. CMA is concerned that the CMS proposal will instead decrease the incentives for states to improve this process by removing access monitoring requirements.