Medicaid home- and community-based services (HCBS) vary by state, in many ways. And while it makes the space a complex one for providers to navigate, a greater understanding of the complexities allows for more success.
Broadly, Medicaid is a state and federal partnership. The federal government sets rules and parameters. The state takes those parameters and implements their own programs within the framework that the Centers for Medicare & Medicaid Services (CMS) provides.
However, the federal guidance around state rates is minimal, according to Damon Terzaghi, senior director of Medicaid advocacy at the National Association for Home Care & Hospice (NAHC).
“What we always refer to, when we’re talking about Medicaid payment policy, is section 1902(a)(30)(A),” he said during a presentation at NAHC’s Financial Management Conference, which took place last week. “[It] basically says that CMS, the federal government, does not have statutory authority to tell states what they must pay for programs, for services and those sorts of things.”
Hospice is one of the few exceptions. It is one of the programs that has a federal minimum payment rate.
In general, the Medicaid program has a history of under-reimbursing for services in comparison to Medicare and private insurance.
“It has led to a lot of challenges and concerns around whether they’re truly meeting that access-to-care requirement,” Terzaghi said.
Terzaghi noted that these problems eventually led to the “Ensuring Access to Medicaid Services” rule.
“You can draw a direct line from the [Armstrong v. Exceptional Child Center] Supreme Court decision, through various iterations of CMS rulemaking, straight to this access regulation where CMS says, ‘We can’t tell you a minimum payment rate, providers can’t sue, [but] we can start to put a framework around what equal access looks like,” he said.
One of the main positives of the rule is that it’s now a regulatory standard for states to have rates high enough to attract a sufficient workforce to deliver care.
There are a handful of ways that different states approach payment. Fee for services is one of the most common ways that HCBS are reimbursed through Medicaid.
There are some states that adjust payment rates to keep pace with cost-of-living differences based on geography.
In addition to geographic adjustments, some states do acuity use adjustments.
“In the Medicaid program, frequently there’s a comprehensive functional assessment of need, for individuals before you start delivering these in-home care services, so we’ve seen more and more states start to tie reimbursement to acuity,” Terzaghi said.
There are also bundled payments, which groups services together, and then providers receive a single rate.
“The states are trying to give some flexibility to meet the individual where they’re at, as opposed to having a more regimented prior authorization process,” Terzaghi said.
Managed care
Managed care organizations (MCO) get paid a per member, per month risk adjusted rate from the state.
It’s important for providers to understand that operating in a state that has managed care doesn’t mean that every home- and community-based service is under the MCO.
“I’ll use Georgia as an example, it’s mandatory managed Medicaid, except if you are using an LTSS service, for example, or if you have private-duty nursing that falls under the GAPP program, which falls outside of the MCO,” Jim Melançon, senior vice president of government affairs at Aveanna Healthcare, said during the presentation.
Melançon noted that managed Medicaid is the predominant service delivery model that most states are following.
Ultimately, providers should pay attention to services covered in their states, how rates are established and their state’s budgeting process.
“The market is going to dictate what the rate is going to be for your workers, and that’s what you will – as a provider – have to look at,” Melançon said.
Companies featured in this article:
Aveanna Healthcare, The National Association for Home Care & Hospice
