Tenacity pays off in 10 states, and counting

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03/19/2018
Laura Williard
vice president of payer relations, AAHomecare

In December 2016, Congress passed wide-ranging healthcare legislation popularly known as the Cures bill that expedited the implementation of a requirement that the federal portion of Medicaid reimbursement to states for HME cannot exceed what Medicare would have allowed for these items, in aggregate, beginning on Jan. 1, 2018.

CMS provided its first update to Medicaid directors via a webinar in December, but it failed to include information needed for states to understand how to implement the new requirements. They released additional information less than a week before the Jan. 1 implementation date that confirmed that these requirements do not apply to medical supplies or O&P products and noted that states do have flexibility in setting rates to ensure access for their patients. The guidance gave states an option of basing Medicaid rates on Medicare’s lowest fee schedule or competitive bid rates for the state (which they described as the “simplest” option), or to conduct a comparison using both rate and unit utilization data to calculate the aggregate reimbursement under Medicare for those same items to show that the state payments are less than the federal allowable.

Many in the DME community (myself included) were taken aback by CMS’s original deadline of Dec. 31 for states to determine their approach, especially given that their guidance was issued on Dec. 27. AAHomecare quickly pushed back on that un-meetable deadline and helped convince CMS to issue an update giving states the time they needed to assess their options. We also encouraged CMS to promptly publish a listing of the codes affected, which has still not occurred. However, AAHomecare received a copy of the list of codes from CMS and provided that to Medicaid directors and the state and regional DME associations for distribution. CMS is still providing this to states as they request it.

Since that time, AAHomecare has been working with leaders at state and regional associations to help convince state Medicaid officials to analyze their spending for the appropriate coding and, if under the aggregate, to not perform any rate reductions. If states are over the aggregate amount, AAHomecare is encouraging them to make sure that cuts are limited to the 244 codes affected. As of this writing (March 8), we’ve received confirmation that 10 states are not changing their rates: Florida, Georgia, Hawaii, Michigan, Minnesota, North Carolina, Pennsylvania, South Carolina, Tennessee, and Texas. Nine states have made the decision to move to Medicare rates but AAHomecare and state associations are hopeful to change the outcome on these, as we are still working with five of those states.

We’re currently working closely with stakeholders in Ohio, Missouri, North Dakota, Colorado, and South Carolina to encourage those still-undecided states to adopt the aggregate pricing approach. In these states, we want to make sure that state officials have a clear understanding of their options. We’ve also shared our recent studies that show that DME suppliers are already operating at razor-thin or even negative margins on many products and illustrating the threat to patient access.

Challenges remain in many other states that are still analyzing their data using tools and guidance provided by CMS. Connecticut Medicaid officials, for example, just announced their intention to adopt Medicare pricing across all DME, O&P and supplies codes, going beyond the scope of the new provisions. The state’s intention to implement drastic cuts of 50% to 60% with just 30 days notice and without any consultation of the DME community is even more troubling. AAHomecare has joined the Home Medical Equipment and Services Association of New England and NCART in asking for a 90-day delay to make sure Connecticut officials have all the information available to make a better-informed decision. Other states have also used this legislation as a platform to evaluate and reduce their entire fee schedules despite efforts by stakeholders to convince them of the access to care issues.
Our state association partners have done terrific work in making sure that Medicaid officials understand their options under the new requirements beyond CMS’s self-described “simplest” approach, as well as giving them a clear picture of the potential impacts. For me, it’s been rewarding to work with dedicated state associations to fight back, and AAHomecare will continue to support their efforts to secure smarter and sustainable Medicaid reimbursement policies wherever we can. hme

Laura Williard is vice president of payer relations for AAHomecare. Reach her at lauraw@aahomecare.org.