HealthLawProf Blog

Editor: Katharine Van Tassel
Case Western Reserve University School of Law

Thursday, August 9, 2012

The trope of flexibility

On Monday, Cindy Mann, Director of the Center for Medicaid and CHIP at CMS, spoke to the National Conference of State Legislators and assured them of CMS's permissive approach to participation in the Medicaid expansion.  Her statements were striking for their willingess to allow states flexibility in joining, participating in, and dropping the new expansion population.  Mann indicated this was CMS's interpretation of the Court's decision in NFIB, but CMS is offering much more flexibility than the Court required.  

Why would CMS read NFIB so broadly when it appears to limit HHS authority, or at least devolve a great amount of authority to the states?  One word: coverage.  If the agency's goal is to get as many lives as possible enrolled in Medicaid, then presenting the states with flexibility is probably the way to do it, at least in the current political environment.  But, Republican Governors have scoffed at Mann's offer of total flexibility.  It is hard to imagine any level of flexibility that would satisfy them beyond block grants with no conditions attached.

This drive for coverage should be balanced with the reality of payment sufficiency; will CMS be ‘flexible’ about what states pay the providers for the Medicaid expansion too?  CMS faces perverse incentives in its enforcement of the Medicaid Act - the federal government saves money if the states pay less for Medicaid services, even though the Act demands sufficient payment to ensure equal access to medical care in a geographic region.  If the states underpay their providers, the expansion population will have a very hard time accessing medical care.  Until now, CMS has been notoriously lax in enforcing the Equal Access provision, but it is in the process of writing final regulations to explain how that requirement should work.  CMS should ensure that the Equal Access regulations achieve the goals of Medicaid expansion rather than continue the old patterns of nonenforcement.  Otherwise, the "flexibility" offered to the states for enrollment of the newly eligible will only provide a veneer of coverage.


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