Payer Relations: Choose the correct path

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Wednesday, March 11, 2020

Q. What are the pros and cons of solving state Medicaid issues with regulation vs. legislation?

A. There are two principal paths to solving state Medicaid issues: either through regulation or legislation. Both are effective ways of resolving issues, but each comes with their own costs and benefits. It is typically a good idea to start with the regulatory approach so that you don’t burn any bridges with state regulators and overlook any potential allies. However, I always recommend weighing the pros and cons when evaluating your strategy.

Some of the pros with regulation include a less cumbersome and quicker implementation. In addition, you may not need to enlist a lobbyist if relationships with the Medicaid agency are strong. However, your policy gains can just as easily be changed or reversed, policy could be misinterpreted by MCO plans or new policy staff, and this misinterpretation could be difficult to turn around.

Legislation is often a more permanent solution, multiple options are available within the state’s general assembly for identifying champions, and there is less opportunity for misinterpretation by MCO plans. Cons include the potential costs of hiring a lobbyist, the legislative path can take longer than regulatory, the potential for other groups to oppose legislation, the Medicaid department still has to issue guidance based on legislation, and in many cases a fiscal note detailing budget impacts of your legislation will need to be developed by state officials. 

State Medicaid payer issues will remain a major focus for HME providers as the managed care model continues to expand throughout the country. It is always recommended to consult your state association and AAHomecare’s payer relations team for advice and access to subject matter experts with experience crafting successful regulatory and legislative strategies. The difference of a successful effort can be as simple as aligning with other stakeholders and choosing the correct plan. 

David Chandler is director of payer relations for AAHomecare. Reach him at davidc@aahomecare.org.