Medicaid Reimbursement Rates and the Future of the Program
A recent monumental decision by the Supreme Court was just passed, and it will define the way Medicaid providers will be reimbursed now and in the future. Many Medicaid providers, including doctors, hospitals, and healthcare organizations, are already concerned with the low reimbursement rates, but now, due to the 5-4 vote by the Supreme Court, many will not have the right to push the states into increasing their payments.
In 2009, there was a ruling passed by the lower courts in Idaho to increase the state’s reimbursement rates. The ruling came about due to the fact that the centers that provided care for about 6,000 mentally disabled adults and children were being reimbursed at the 2006 Medicaid reimbursement rates. The centers stated in their filings that the cost to maintain the treatment of these patients was substantially higher than what they were being reimbursed by the state. But then the Supreme Court stepped in and overturned this decision, citing that the Medicaid providers have no right to sue under the current laws pertaining to the federal funding for Medicaid programs.
The positive result of the 2009 ruling of the case, Armstrong v. Exceptional Child Center Inc., was that it set a precedence on enforcing federal payment requirements. Many of the other Medicaid states were using this as a foundation for their pursuit of fairer reimbursement. The basis of the argument was that federal requirements for rates must be “sufficient to enlist enough providers so that care and services are available under the plan. . . to the general population in the geographic area (42 U. S. C. §1396a(a)(30)(A) (“§30(a)”). Now, with the overturn of the decision, this could mean that fewer providers of service will participate in the Medicaid program, which will mean that Medicaid members will have fewer choices and restricted access to care.
Supreme Court Justice Beyer stated his decision was made based upon the rationale on “several characteristics of federal statute,” in particular the Administrative Procedure Act. The debate that ensued during the session, and the final determination made, was mainly focused on alternative remedies, one of which was to engage the Department of Health and Human Services (“HHS”) and cite §30(a) to withhold Medicaid funding, if the rates were inadequate.
The ruling has caused multiple groups, including 28 states, to voice their concerns with the decision. While this will be a long-term debate on both sides of the spectrum, conservatives and liberals, one thing is for sure: in the current environment, there needs to be risk strategies set into place so that the current, and future, players in Medicaid can keep sustaining the care provided with the ever-changing financial atmosphere. Gorman Health Group (GHG) understands the complexities of the numerous shifting of variables and has a team with the expertise and knowledge to perform risk adjustment models and make recommendations based on revenue vs. medical spend. Most states have rates that vary and are often moving targets; many organizations need to operate on projections or estimates.
GHG can provide assistance with identifying current and future costs of doing business while building in anticipated adjustments that make sense for the population served. We will position you for success by building a strategy that takes into account the service area, market environment, core competencies, and vision for the future. Contact us today to get started >>
Resources
Over the last several years, GHG has committed our time to understanding the needs of the dual population, which has allowed us to build systems and processes that yield quality outcomes. As states begin to increase oversight activities and implement more robust compliance and fraud waste and abuse practices, our expertise in compliance program development will be an asset to any organization. Visit out website to learn more >>