May 22, Submitted via: regulations.gov..

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1 May 22, 2018 Submitted via: regulations.gov.. Centers for Medicare and Medicaid Services Department of Health and Human Services Attention C Security Boulevard Baltimore, Maryland Re: CMS 2406-P: Medicaid Program: Methods for Assuring Access to Covered Medicaid Services-Exemptions for States with High Managed Care Penetration Rates and Rate Reduction Threshold The Centers for Medicare and Medicaid Services (CMS) and the U.S. Department of Health and Human Services have proposed a number of reforms in the requirements state Medicaid programs must follow in set payment rates in fee-for-service Medicaid benefits in the Notice of Proposed Rulemaking (NPRM). 83 Fed. Reg (March 23, 2018). The proposed changes would significantly dilute the protections that existing rules provide relative to ensuring that payment rates are sufficient to secure access to care under 42 USC 1396(a)(30)(A). The National Association for Home Care & Hospice (NAHC) respectfully submits these comments regarding the proposals contained within the NPRM. NAHC is the largest trade association representing the interests of Medicaid home health agencies (HHAs) and home and community based care providers nationwide including nonprofit, proprietary, urban and rural based, hospital affiliated, public and private corporate entities, and government run providers of home care since NAHC members provide the significant Medicaid home care services in all states, territories and the District of Columbia... 1

2 NAHC is also an original provider-member of the Leadership Council of Aging Organizations (LCAO) as it has put patients first in its health policy and advocacy positions since its inception. Each year, NAHC members serve millions of patients of all ages, infirmities, and disabilities, providing an opportunity for individuals to be care for in their own homes, the care setting preferred by virtually all people. The NPRM includes a variety of proposed rule changes regarding state analysis of access to care, public reporting, and application of requirements for an access monitoring review plan. NAHC strongly opposes these proposed changes. For many years, health carte providers had access to federal court review of Medicaid rate changes. However, in 2015, the US Supreme Court essentially closed off access to federal courts on these matters in Armstrong v. Exceptional Child. Fortunately, CMS stepped up to provide practical protections for Medicaid beneficiaries and the providers that serve them with a series of process standards that required the states to monitor the impact of payment rates and rate changes on access to care. Under these rules, CMS became a protector of access to care. With the proposed changes in the rules, CMS would greatly dilute these thoughtful processes thereby putting access to care at risk. It is well recognized that Medicaid payment rates generally are lower than the cost of care. At the same time, some states have reduced payment rates over the years purely for budgetary reasons without analysis or evaluation of the impact of rates on care access. Similarly, some states have left payment rates unchanged for years as care costs have increased jeopardizing continued access to care. Essentially, providers of care have had to use revenues from other payer sources to subsidize Medicaid. However, the margins from other payer sources are shrinking, deteriorating any continued subsidization potential. Diminishing the protections found in the existing rules now creates higher risk than ever that care access will be reduced or lost entirely. The risks are acute in home care given changes in minimum wage and overtime obligations under federal and state laws. Further, the risks have been heightened in home care as providers compete for staff with institutional care providers who have the benefit of reasonable payment rates from commercial; payers while home care providers rely on Medicare, Medicaid, VA and other government program-based payment sources. Accordingly, NAHC respectfully urges CMS to withdraw its proposal and instead work to strengthen the rate setting protections instituted in These protections are barely out of their infancy. As such, it is highly premature to consider changes even before the impact of the existing rules is fully known. These rules are the only barrier to arbitrary reductions in payment rates within the Medicaid programs. The existing rules are needed now more than ever. CMS must not exempt states with high managed care enrollments and retain the protections promulgated for all fee for service Medicaid benefits CMS proposes to exempt states where at least 85% of Medicaid beneficiaries are enrolled in a Medicaid managed care plan. However, Medicaid beneficiaries receiving services under the traditional fee for service benefit model deserve the protections afforded by the existing rules whether those beneficiaries represent more or less than 15% of the state s Medicaid 2

3 beneficiaries. CMS has put forward no evidence that rate reductions in states with 85% or more managed care enrollment have lees affect on care access for fee for service beneficiaries than in states with less that 85% managed care enrollment. It is pure speculation that the existing protections under the rules are not needed in such jurisdictions. It is distinctly possible that whole populations of Medicaid beneficiaries will be put at risk with the CMS proposal. That is very possible with respect to home care as there are many states that have not instituted Managed Long Tem Services and Supports programs while enrolling non-mltss beneficiaries entirely in managed care. Medicaid home and community based care on a fee for service basis can represent the majority of long term care spending in a given state at an amount that exceeds the total Medicaid spending for managed care enrollees. While NAHC opposes the CMS proposal on a wholesale basis, if CMS chooses to move ahead, NAHC suggests that CMS consider an exemption standard that is based on the percentage of beneficiaries in each benefit category separately rather than looking at the overall Medicaid population. Further, any such exemption should be subject to a qualification that is based on the nature of the population remaining in a fee for service model. For example, technologydependent pediatric patients are a unique category of Medicaid beneficiaries of the private duty nursing benefit and the rules should continue to apply to protect that unique patient population. Similarly, beneficiaries in rural areas of a state may not have managed care available and often find unique difficulties in home care access, including Medicaid payment rates that do not account for extensive travel time. States should not simply have to certify that the rates are adequate in those rural areas. Instead, the protections provided in the existing rules should be retained. CMS should not exempt states from the access rules when the rate cut is 4%or lower in one year or a cumulative 6% in two years Without any empirical support, CMS proposes to exempt rate reductions that are 4% or lower in one year or 6% over two years based on a classification of such rate reductions as nominal. However, CMS offers no basis for that finding. First, it seems to start from an assumption that existing rates are either sufficient or more than sufficient to secure access to care. Second, it seems to assume that whatever Medicaid margin current rates provides (positive or negative) is 4% or more higher than needed to maintain care access in all provider categories. Such an assumption is beyond reasonable. The average margin for freestanding home health agencies (HHAs) participating in Medicare in 2016 was 1.95%. Medicaid law requires that an HHA participate in Medicare. The margin for all Medicare HHAs (with institution based included) is lower. However, such data is not publicly available. With the CMS proposal, a 4% rate reduction in a Medicaid payments would likely bring the average HHA into insolvency. It is reasonable to assume that if the average HHA is insolvent that access to care for its Medicaid patients would be at risk. Typically, a Medicaid home care payment rates are below a provider s cost of care. In the event that Medicaid rates fall to a point where the HHA is insolvent, the most likely way to regain stability is to drop a Medicaid patients as they are the central cause of the insolvency. With 3

4 current average margins below 2%, the CMS proposal would essentially allow states to trigger this result without the protections currently provided in Medicaid rules. While the NPRM notes that the general standard under. 42 USC 1396(a)(30)(A) would still apply, there is no required minimum process that would effectuate that standard. Experiences demonstrate that states would take a reactionary approach, adjusting rates only after access has been actually lost or significantly reduced, an action that can take years. Comparing Medicare per visit rates with current state Medicaid rates for the same service discipline indicates that access is already at risk for Medicaid patients. Not one single state has a payment rate equal to or greater than a Medicare visit rates. Accordingly, a 4% rate reduction is a recipe for disaster. It is not reasonable to consider such a rate reduction as nominal in this context and the context matters. It would be wholly different if the context was that HHAs had Medicaid payment margins in the double digits. However, the CMS proposal ignores the real life context of current Medicaid rates that are below cost nationwide. The proposal is seriously flawed for other reasons as well. The proposed policy of exempting states that institute rate reductions of 4% or lower is calculated on the basis of the overall reduction within the benefit category. That means that a state could institute a 20% rate cut in one service discipline in the home health benefit if the overall reduction in the aggregate of all service disciplines is 4% or lower. For example, if a state provides for coverage of nursing, physical therapy, occupational therapy, speech language pathology and home health aide services, it could reduce physical therapy rates by much more than 4% so long as it does not result in an overall payment reduction of 4% or more for the combination of care disciplines. That standard is far from a nominal reduction. The 4% nominal exception policy also does not take into account cost increases that occur following the original rate setting. For example, if a state sets its rates for personal care services considering the minimum wage at the time, a 4% rate reduction certainly would not be nominal. However, it would be even more concerning if the state later instituted a 4% rate reduction during a point when the minimum wage is increased. A rate cut of any nature at a time of rising costs cannot be considered nominal.. CMS should take steps to strengthen the reporting responsibilities of states and the process for protecting access to care in Medicaid rate setting As the existing rules requiring an access monitoring plan are the only substantive protections from faulty or arbitrary Medicaid rate setting, it is essential that CMS look for ways to strengthen this limited, but valuable protection. NAHC recommends that CMS establish a uniform reporting tool that requires a reasonable analysis of existing Medicaid rates along with a structure process for evaluating rate reductions. The process should include an analysis of current Medicare, VA, commercial insurance, managed care and private pay rates for the services. In addition, the process should involve an evaluation of the provider marketplace that includes such factors as market saturation or shortages of providers. Further, states should consider wait-listing timeframes for service access as well as evidence of start of care or patient referral delays from 4

5 other care settings. Job market data should be part of any rate evaluation as increasing demand and worker shortages can often translate to the need for higher worker wages. These are just a few of the measures that should be included in a minimum data set for rate evaluations. It is also important that states conduct the rate sufficiency evaluations no less than annually to improve the chances of continuing care access. Annual reviews are conducted by the Medicare Payment Advisory Commission (MedPAC) in Medicare. Medicaid beneficiaries deserve the same level of protection. NAHC is very open to working with CMS to develop the baseline data and the tools necessary for consistent evaluation of the sufficiency of Medicaid payment rates. One a design is developed, it would be relatively easy for states to conduct an evaluation and to report uniform data to CMS for its review..simply waiting to hear whether patients or their representatives are complaining about access problems is not a reliable system for ensuring ongoing access. The value of an effective rate evaluation system far outweighs any burden on the states The NPRM reveals that the burden of the existing rules on state Medicaid programs is minute. CMS calculates in its impact analysis that the proposed exemptions and other modifications in the access rule save a total of $1,667,363 annually. In a program of over $300 billion in annual spending, that is a small price to pay to protect access to care for some of the nation s most vulnerable citizens. In providing a reasonable semblance of protection from the consequences of inadequate payment rates, CMS can likely save billions of dollars. For example, if a person who can be effectively cared for at home loses access to care due to inadequate payment rates, it is highly likely that the individual will end up in a much more costly care setting such as a hospital. The investment in a set of payment rate protections in each state would pay great dividends in both the short run and the long run. Rarely does doing something cheaply bring effective outcomes. Here, CMS s own analysis shows that the AMRP requirements are far from costly. Conclusion On behalf of the millions of Medicaid beneficiaries that receive some form of home care each year and the thousands of providers of that care, NAHC appreciates the opportunity to submit these comments for consideration. We look forward to the issuance of the Final Rule with the hope that CMS considers these comments constructively as they are intended to be. Very truly yours William A. Dombi, Esq. 5

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