AAP policy and advocacy strongly influenced new Medicaid rules that will expand access to care for patients and increase payment rate transparency for providers.
The Centers for Medicare & Medicaid Services (CMS) announced two final rules on April 22.
The first is aimed at improving access to care in fee-for-service Medicaid and the Children’s Health Insurance Program (CHIP). The rule also sets minimum standards for payments to direct care workers providing home and community-based services (HCBS) and advances provider rate transparency.
The second rule will improve access to care, accountability and transparency for more than 70% of Medicaid and CHIP beneficiaries who are enrolled in a managed care plan. It will require a limit on how long enrollees have to wait for an appointment and allow people to compare plan performance based on quality and access to providers.
"The AAP is thrilled with the final rules announcement, which builds on our efforts to advocate for improved access to health care coverage," said AAP President Benjamin D. Hoffman, M.D., FAAP. "As a result, the system will be more transparent and child and family centered, leading to better access to care when they need it. For pediatricians, these rules will create a more equitable payment structure, that will improve our ability to provide the care kids need, and make provider rates more visible for families who access this care. Millions of children, families and adults will benefit from these improvements to Medicaid and CHIP."
The 2023 AAP policy statement Medicaid and the Children’s Health Insurance Program: Optimization to Promote Equity in Child and Young Adult Health, calls for foundational and stepwise changes to strengthen the Medicaid and CHIP programs with the goal of improving health care and access for all children. AAP leaders say the policy statement, as well as the organization’s response to a 2022 CMS request for information, pushed the Biden administration to take steps to improve Medicaid and CHIP for children.
“This is an opportunity we have not had since the Medicaid program was created,” said AAP CEO/Executive Vice President Mark Del Monte, J.D. “With these important new rules, CMS will be bringing a new level of accountability and transparency to an issue pediatricians know firsthand — the link between payment and access in the Medicaid and CHIP programs. These rules distinguish between pediatric payment rates and adult payment rates and provide a new line of sight into Medicaid managed care. Significant and ongoing AAP advocacy, informed by the Academy’s groundbreaking 2023 Medicaid policy statement, has resulted in these changes, and we will continue to monitor and help guide the implementation of these rules for our members and the families they serve.”
As part of increasing payment rate transparency, the access rule will require states to publish fee-for-services rates for all services. It also requires an analysis comparing rates to those of Medicare for primary care, obstetrics/gynecology (OB/GYN), outpatient mental health and substance use disorder (SUD) services, and HCBS. Rate comparisons must be published by July 1, 2026, for Medicaid rates in effect July 1, 2025.
The access rule also requires that at least 80% of Medicaid HCBS payments go toward compensating direct care workers rather than covering administrative overhead.
"These new rules represent years of AAP advocacy work and are an important first step toward payment transformation for pediatrics,” said AAP Immediate Past President Sandy L. Chung, M.D., FAAP. “For the first time, the public and policymakers will be able to see how inequitable payment for pediatrics is across the country. With the data that these rules require, we can truly make progress towards change.”
States also will be required to publish the number of claims paid by Medicaid and the number of Medicaid beneficiaries receiving each service. If a state proposes a rate cut, it must meet several conditions. If it cannot meet the conditions, an even more rigorous analysis is required. States also must have an ongoing mechanism for provider and beneficiary access-related input, and when deficiencies are identified, they must submit a plan to address each issue.
The managed care rule also requires states to establish appointment wait time standards for managed care plans, with the goal of ensuring children enrolled in Medicaid will not have to wait longer than their commercially insured peers to get the care they need. Wait time standards will include:
- primary care — no more than 15 business days from date of request (adult and pediatric patients);
- outpatient mental health and SUD — no more than 10 business days from date of request (adult and pediatric patients); and
- OB/GYN — no more than 15 business days from date of request.
States must also establish a minimum wait time standard for one other service.
State compliance with wait time standards will be verified by conducing “secret shopper” surveys, which will also assess the accuracy of managed care plans’ provider directories.
AAP officials say Medicaid managed care organizations may need to expand their provider networks to meet the new standards, which in turn could drive higher payment rates and reductions in administrative burdens to attract more providers.
Like the access rule, the managed care rule also requires states to conduct an annual payment analysis for every managed care plan of the total amount paid for evaluation and management (E/M) codes for primary care, OB/GYN and mental health/SUD and as a proportion of Medicare’s payment rate, and HCBS services as a proportion of Medicaid fee-for-service rates. If rates differ for adult vs. pediatric care, the percentage must be reported separately.
AAP leaders plan to develop resources to help chapters provide information about the new rules to members, and advocate at the state level as these rules are implemented in coming years.
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