Skip to Content

Stakeholders push for Medicaid rate reform

Stakeholders push for Medicaid rate reform Early progress in Florida, Virginia sets stage for stability

Medicaid councilWASHINGTON – As part of a new national campaign, AAHomecare is asking industry stakeholders to use the recent CPI-U adjustments to the Medicare fee schedule as a talking point with state Medicaid programs to increase their rates. 

CMS in December published a fee schedule reflecting 6.4% to 9.1% CPI-U adjustments, prompting AAHomecare to develop a template letter that stakeholders can personalize and share with state Medicaid programs to help provide a “rationale” for increasing their rates, as well, says Laura Williard, vice president of payer relations for the association. 

“There’s a good story to tell around those increased Medicare rates,” she said. “I know that, from some of the states we’re working in, there hasn’t been a rate increase in decades. In Florida, it has been 23 years; in Georgia, I think it’s been at least 18 years.” 

Thirty states base their rates off of Medicare rates as a result of the CURES Act in 2018 and, therefore, could be up for an increase: 21 states off of rates in non-rural areas, four states off of rates in rural areas and five states off of rates in competitive bidding areas. The remaining states do not follow Medicare rates. 

As part of the campaign, AAHomecare also wants stakeholders to make the case with lawmakers in their states for setting a “rate floor” for Medicaid managed care, says David Chandler, senior director of payer relations for the association. 

“For the 30 states that follow Medicare, we want to ensure they’re applying the CPI-U adjustments, but for the states with proprietary fee schedules, there’s less obligation to make those adjustments, so there is a need for rate stability,” he said. “Some pay a discount off of Medicare. So, there are efforts in several states to adjust the methodology for setting rates.” 

The specific strategy for pushing for rate increases and rate floors will vary, but so far stakeholders, like the Florida Alliance of Home Care Services, have had good luck with getting amendments included in budgets. In Florida, the state Medicaid program, the Agency for Health Care Administration, has put in for a 5% rate increase for DME. 

“That’s just the first step,” Williard said. “It must also be worked into the governor’s budget and then passed by the legislature. But we’re at the table and part of the conversation.” 

In Virginia, there are budget amendments in play in the House and Senate that would direct the state Medicaid program, the Department of Medical Assistance Services, to set rates at 100% of the Medicare rates in rural areas. 

“This is something we’ve been working on heavily in Virgina,” Chandler said. “We’re working with providers there who are having to pull back on services, meaning patients have less access in those areas. We’re trying to modernize the way those rates are set.”


To comment on this post, please log in to your account or set up an account now.