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NCD Letter to CMS Regarding Medicaid Reimbursement Rate NPRM

Tuesday, May 22, 2018

May 22, 2018 


The Honorable Seema Verma
Centers for Medicare and Medicaid Services
U.S. Department of Health and Human Services
7500 Security Boulevard
Baltimore, Maryland 21244-1850


Dear Administrator Verma:


I write on behalf of the National Council on Disability (NCD), an independent, nonpartisan federal agency charged with advising the President and Congress on disability policy matters, in response to the Notice of Proposed Rulemaking that seeks to give states greater flexibility to lower reimbursement rates to Medicaid providers. The proposed rule would relieve states of the obligation to analyze data and monitor access when they reduce reimbursement rates when the state has an 85% or higher Medicaid managed care penetration rate or when the reductions in fee-for-service payment rates are considered nominal. While NCD understands that the Administration is attempting  to eliminate unnecessary red tape, the implications of this proposal are, in fact, much broader. Lower reimbursement rates can negatively impact the quality of the services provided, which can lead to unintended consequences, particularly for individuals who rely on Medicaid for the services they need to remain in their homes and communities.


NCD agrees that states should be allowed to innovate to find better, more efficient ways to provide services to their Medicaid beneficiaries, particularly people with disabilities, who may need expensive long-term home and community-based services. However, states face enormous pressure to lower reimbursement rates, particularly in states with significant revenue shortfalls despite the risk that low reimbursement rates are already contributing to crisis level shortages in the long-term care workforce. Simply put, lowering reimbursement rates to providers makes it near impossible to recruit and retain a workforce that is adequate to meet the needs of the growing aging population and people with disabilities. Additionally, the Americans with Disabilities Act (ADA) requires that services be provided in the least restrictive environment. Without an adequate workforce to meet this growing demand, individuals face unnecessary institutionalization and often inadequate and/or unsafe care. 


While the proposed rule only allows states the discretion to reduce rates no more than 6% over two years in the fee-for-service context and when the Medicaid managed care penetration rate is 85% or greater, this can still have a tremendous impact on the direct-care workforce. In the first instance, while 6% sounds minimal, it must be understood that most states’ reimbursement rates already ensure low wages for direct support staff for personal assistance services. Low reimbursement rates not only fail to attract adequate numbers of support staff but also affect the competence of the staff who do fill those positions and ensure that those jobs remain entry-level, low-skill, high-turnover jobs. Unfortunately, we have already seen a number of states struggle to hold managed care companies accountable when they provide inadequate care, which means that the managed care penetration rate requirement provides little assurance that the reimbursement rates will not lead to inadequate provider networks and substandard care. 


While the CMS’s stated goal of avoiding micromanaging state Medicaid agencies is laudable, adequate reimbursement rates are fundamental to ensuring that people with disabilities are able to receive quality home and community based services in the least-restrictive environment. This is a matter of freedom and safety for people who rely on these services, and it is a cornerstone of achieving the promise of the ADA to give people with disabilities a chance to live independently and participate in their communities. NCD’s study of this issue indicates that CMS should continue to hold states accountable for setting reimbursement rates that ensure adequate quality of long term care services. 




Neil Romano

An official website of the National Council on Disability