America’s Essential Hospitals has urged the Medicaid and CHIP Payment and Access Commission (MACPAC) to account for provider contributions to the federal share in state directed payment (SDP) analyses.
The association shared its concerns in an Oct. 31 letter on MACPAC’s updated analysis of directed payment spending as well as the policy changes to separate payment terms and interim payments in the 2024 managed care rule.
In an updated issue brief, MACPAC reported a total projected spending for 2024 is $110.2 billion, a nearly 60 percent increase in projected spending from SDPs, without acknowledging the provider contribution to the nonfederal share. The association asked MACPAC to report data on the total federal share of SDP spending until data is available to report on net payments after accounting for provider contributions to the nonfederal shares.
The association also shared its concerns with two barriers in the final managed care rule that likely will undermine the effectiveness of Medicaid SDPs: the elimination of separate payment terms and the prohibition on interim payments based on historical utilization. These provisions do not change the amount of SDPs providers are eligible to receive, but they will add substantial administrative costs to states, health plans, and providers with no meaningful benefit for patients.
Eliminating separate payment terms will disproportionately harm essential hospitals, because it will make it more difficult for states to target directed payments to safety net providers. Further, interim payments help states make more timely and predictable payments to providers, which is important for maintaining cash on hand at essential hospitals. The association included its letter to the Centers for Medicare & Medicaid Services outlining these concerns in greater detail.
Finally, the association shared a Sept. 12 policy brief on SDPs, detailing the important role and successes of directed payments at essential hospitals.
Contact Director of Policy Rob Nelb, MPH, at rnelb@essentialhospitals.org or 202.585.0127 with questions.
Author