What The ‘Fundamentally Contradicting’ Medicaid Access Rule Includes

The White House teased the finalized Medicaid Access Rule early Monday, and the Centers for Medicare & Medicaid Services (CMS) later revealed more intricate details attached to the rule.

Firstly, the timeline of the rule is now clear. Specifically:

– In three years, states must “report on their readiness to collect data regarding the percentage of Medicaid payments for homemaker, home health aide, personal care and habilitation services spent on compensation to the direct care workers furnishing these services.”


– In four years, states must “report on the percentage of Medicaid payments for homemaker, home health aide, personal care and habilitation services spent on compensation to the direct care workers furnishing these services, subject to certain exceptions.”

– Then, in six years, states must “generally ensure a minimum of 80% of Medicaid payments for homemaker, home health aide and personal care services be spent on compensation for direct care workers furnishing these services, as opposed to administrative overhead or profit, subject to certain flexibilities and exceptions.”

The certain flexibility and exceptions are a part of the HCBS payment adequacy provision, which provides states the option to establish “hardship exemptions” and objective criteria for providers that may be facing “extraordinary circumstances.”


There also will be a separate performance level for small providers “meeting state-defined criteria based on a transparent state process and objective criteria.” The adequacy provision also exempts the Indian Health Service and Tribal Health program from complying with certain requirements, CMS said in its fact sheet.

Providers and advocates expressed displeasure with the 80-20 rule being finalized Monday, but there appears to be two parts of the finalized rule that could offer some grace to providers.

The first is a longer runway – six years as opposed to four – and the second is states’ ability to create their own criteria for exemptions, though it is unclear just how much wiggle room they will have under CMS’ watch.

Other provisions included in the rule include the requirement for states to report on Medicaid waiting lists and service timeliness for HCBS, as well as a “standardized set of HCBS quality measures,” which will likely be welcomed news for most providers.

“Ensuring beneficiaries can access covered services is a critical function of the Medicaid program and a top priority of the Department of Health and Human Services, Centers for Medicare & Medicaid Services,” CMS wrote. “The Ensuring Access to Medicaid Services (Access rule) final rule advances access to care and quality of care, and will improve health outcomes for Medicaid beneficiaries across fee-for-service (FFS) and managed care delivery systems, including home- and community-based services provided through those delivery systems.”

The fight to stay in business

After a public comment that drew major feedback – both in volume and in opposition – many top HCBS stakeholders believed that CMS would not go ahead with the Medicaid Access Rule as it was originally proposed in April of last year.

And, while there are certainly added elements and adjustments compared to the proposal, the finalized version is still a disappointing development for the HCBS community.

“Are we surprised? I think disappointed is probably a better word,” National Association for Home Care & Hospice (NAHC) President William A. Dombi told Home Health Care News Monday. “Surprise is probably not what we feel, because this administration has been pretty focused on making this happen from Day One. And when the president references home care in the State of the Union address twice in a row, a lot of signs indicated it was going to be pretty close to the proposed rule.”

Dombi, along with Damon Terzaghi – the director of Medicaid advocacy at NAHC – believed there are parts of the rule that could lead to positive HCBS progress, but that the 80-20 provision will likely overshadow those.

Ultimately, providers’ ability to operate is obviously paramount to greater access to HCBS. With blanket wage mandates, their ability to do so is hindered.

“The reality is, there are all sorts of requirements placed on providers to operate in the Medicaid home care space,” Terzaghi said. “And they are important requirements to protect the health and welfare of participants to ensure quality services are delivered, and to prevent fraud and abuse. All of those are administrative requirements that take money to implement. So, if you’re saying you have to do all of these things to participate in the program, but by the way, you don’t have enough money to perform those required functions, how do you – as a provider – justify continuing to deliver services?”

While the current administration has been supportive of the idea of enhanced home-based care services in the U.S., its strategies to get there haven’t always been backed by providers.

“At its core, the rule is a fundamental contradiction,” Dombi said. “It’s saying, we have all of these things we need to do to improve the quality of care, to improve the lives and the health and safety of individuals. All of those things require administrative expenses to achieve. Yet at the same time, the rule is saying, ‘We’re cutting the available funding for you to implement those same activities we’re requiring.’”

CMS could urge states to raise rates so that providers can keep their heads above water with the 80-20 provision in place.

Without that, there will undoubtedly be agency closures, a warning echoed by many industry advocates Monday.

“This goes to the heart of who decides what a Medicaid program looks like in a state, and how it’s operated,” Dombi said. “The broad parameters that are in the federal law clearly set a standard for the structure. But this goes to unprecedented depths of micromanaging that I think you’re going to find the states concerned that, alright, this is the first chapter of micromanaging. What’s the next chapter? What’s the next chapter after that?”

This is a developing story. Please check back later for more updates at homehealthcarenews.com.

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