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CMS Pushes For Expanded Oversight Over State Medicaid Rate Negotiations

by Benjamin Domenech on September 5, 2011

The Hill reports today on a recent push by Don Berwick and CMS to expand their oversight of state Medicaid rate negotiations, prompting significant pushback from state level health secretaries. As The Hill notes, CMS wants the states to “document the potential impact of proposed cuts to payment rates for doctors and hospitals”, based on concerns about shrinking access to care for Medicaid beneficiaries.

“The idea that Washington has to control everything because states can’t be trusted to act in the interest of their own citizens frankly is an insult to the states,” said Dennis Smith, secretary of the Wisconsin Department of Health Services…

Republican state officials say the proposal would cripple states’ ability to negotiate Medicaid payment rates.

“Ultimately these are (state officials’) decisions to make,” Wisconsin’s Smith said. “If providers know, well I’m going to get whatever I can out of you and then whatever I don’t get I’ll run to the feds to get the rest, it really ties your hands in trying to negotiate in good faith.”

Virginia Secretary of Health and Human Resources Bill Hazel agreed.

“Any regulations on our ability to set rates would essentially be inhibiting the General Assembly’s ability to set rates, which is what they do,” Hazel told The Hill. “What we are faced with now with the new potential regs is a situation where instead of flexibility, we’re being told that you have to do all these studies.”

“It’s the time as much as the process,” he added. “You’ve got a 60-day General Assembly period. Suppose the feds don’t like what you’re trying to do: How does it work?”

This matter is not just of note for Republican states – California, for example, has requested an across-the-board 10 percent cut in Medicaid reimbursement rates. Once again, this is an indication that the administration believes a public shaming on rate hikes or cutbacks is a substitute for good policy or a long term solution – which simply is not borne out by experience at the state level.

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