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MACPAC Discusses Relief Funding and Updates on Medicaid’s Response to COVID-19

September 25, 2020

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CONTACTS
Andrew Amari, Hospital Policy and Regulatory Specialist

The Medicaid and CHIP Payment and Access Commission (MACPAC) met Sept. 24 to discuss Medicaid’s ongoing response to the COVID-19 public health emergency and provide updates on relief funding for providers impacted by the PHE, among other topics.

Relief Funding for Medicaid Providers Affected by the Covid-19 Pandemic

Commission staff members presented information on the impact of relief funding for the public health emergency and the status of provider finances, highlighting increased costs and decreased revenue for providers.

While expanded telehealth use has offset some revenue loss, hospitals remain below their pre-pandemic revenue levels. Critically, providers with high shares of Medicaid patients have been more severely impacted during the pandemic, since visits by Medicaid enrollees have not yet recovered in comparison with other payers.

The issue is further exacerbated by the fact that $15 billion in funding was allocated for distribution to Medicaid and CHIP providers through Phase 2 funding of the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136) [see Washington Highlights, March 27], but only $2.2 billion of that funding has been paid to date. Notably, only 14.8% of eligible providers have applied for Phase 2 funding through the CARES Act, despite 38% of Medicaid and CHIP providers meeting eligibility for these payments. The commission staff estimated that provider relief funds and Medicare payment changes have been sufficient to offset approximately three to five months of April-level losses.

The commission staff pointed out that states have leveraged advanced payments, directed payments, and enhanced payment rates for services through Medicaid authorities. However, several of these payments, they said, are tied to Medicaid utilization, which has been lower due to the PHE and therefore decreasing their effectiveness.

During the discussion, several commissioners expressed concern that Medicaid providers may experience a second wave of financial distress due to a loss of the enhanced federal medical assistance percentage increase, among other funding limitations.

To address this, commissioners requested staff to provide further analysis in three general areas:

  • Examine ways to help providers obtain value-based payments to invest toward telehealth infrastructure.
  • Identify barriers to payment at the state level.
  • Explore ways for states to leverage existing Medicaid authorities to provide additional payments.

Update on Medicaid’s Response to COVID-19

The commission staff briefly presented information on Medicaid funding and regulatory flexibilities made available to providers during the public health emergency, including state plan amendments and Appendix K waivers [see Washington Highlights, April 3].

The detailed MACPAC letters to the Centers for Medicare & Medicaid Services emphasized the need for guidance regarding timelines and priorities for states’ return to routine operations.

The presentation also covered the rapid expansion of telehealth during the public health emergency and emphasized growing state support for permanently providing regulatory flexibility for telehealth services. Commission staff reported that telehealth has broad appeal for promoting equitable access to care in areas with limited broadband infrastructure. In addition, use of telehealth in substance use disorder treatment has shown high patient satisfaction and has garnered additional state support for a variety of reasons, including lower patient no-show rates when compared with in-person visits, they said.

Finally, commission staff discussed the racial and ethnic disparities in the number of cases and hospitalizations due to COVID-19. Significantly, the rate of COVID-19 cases for African American, Native American, and Hispanic persons is more than 2.5 times compared with white individuals, and the rate of hospitalization is roughly five times greater.

Commissioners expressed significant concern over the possibility of states beginning their annual Medicaid eligibility redeterminations. Commissioners seek to shift CMS’s attention and request guidance on this issue given that redeterminations could begin in some states as early as November 2020 and beneficiaries could be significantly affected without further action.

Commissioners agreed that telehealth is likely to remain a permanent fixture of Medicaid moving forward. Several commissioners suggested conducting an analysis examining the correlation between telehealth adoption and reimbursement rates. Another commissioner highlighted the need to continue monitoring telehealth utilization.

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