Physician groups push back on Medicaid block grant plan


It took less than a day for physician groups to start pushing back at the Centers for Medicare & Medicaid Services over its new Medicaid block grant plan, which was introduced on Jan. 30.

Dubbed “Healthy Adult Opportunity,” the agency is offering all states the chance to participate in a block grant program through the 1115 waiver process.

According to a fact sheet issued by the agency, the program will focus on “adults under age 65 who are not eligible for Medicaid on the basis of disability or their need for long term care services and supports, and who are not eligible under a state plan. Other very low-income parents, children, pregnant women, elderly adults, and people eligible on the basis of a disability will not be directly affected – except from the improvement that results from states reinvesting savings into strengthening their overall programs.”

States will be operating within a defined budget when participating in the program and expenditures exceeding that defined budget will not be eligible for additional federal funding. Budgets will be based on a state’s historic costs, as well as national and regional trends, and will be tied to inflation with the potential to have adjustments made for extraordinary events. States can set their baseline using the prior year’s total spending or a per-enrollee spending model.

A Jan. 30 letter to state Medicaid directors notes that states participating in the program “will be granted extensive flexibility to test alternative approaches to implementing their Medicaid programs, including the ability to make many ongoing program adjustments without the need for demonstration or state plan amendments that require prior approval.”

Among the activities states can engage in under this plan are adjusting cost-sharing requirements, adopting a closed formulary, and applying additional conditions of eligibility. Requests, if approved, will be approved for a 5-year initial period, with a renewal option of up to 10 years.

But physician groups are not seeing a benefit with this new block grant program.

“Moving to a block grant system will likely limit the ability of Medicaid patients to receive preventive and needed medical care from their family physicians, and it will only increase the health disparities that exist in these communities, worsen overall health outcomes, and ultimately increase costs,” Gary LeRoy, MD, president of the American Academy of Family Physicians, said in a statement.

The American Medical Association concurred.

“The AMA opposes caps on federal Medicaid funding, such as block grants, because they would increase the number of uninsured and undermine Medicaid’s role as an indispensable safety net,” Patrice Harris, MD, the AMA’s president, said in a statement. “The AMA supports flexibility in Medicaid and encourages CMS to work with states to develop and test new Medicaid models that best meet the needs and priorities of low-income patients. While encouraging flexibility, the AMA is mindful that expanding Medicaid has been a literal lifesaver for low-income patients. We need to find ways to build on this success. We look forward to reviewing the proposal in detail.”

Officials at the American College of Obstetricians and Gynecologists said the changes have the potential to harm women and children’s health, as well as negatively impact physician reimbursement and ultimately access to care.

“Limits on the federal contribution to the Medicaid program would negatively impact patients by forcing states to reduce the number of people who are eligible for Medicaid coverage, eliminate covered services, and increase beneficiary cost-sharing,” ACOG President Ted Anderson, MD, said in a statement. “ACOG is also concerned that this block grant opportunity could lower physician reimbursement for certain services, forcing providers out of the program and jeopardizing patients’ ability to access health care services. Given our nation’s stark rates of maternal mortality and severe maternal morbidity, we are alarmed by the Administration’s willingness to weaken physician payment in Medicaid.”

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