HHS to Delay, ‘Soften’ Medicaid Managed Care Regulations

The Bush administration has chosen to delay and "soften" regulations issued during the final days of the Clinton administration that would provide a host of patient protections for Medicaid beneficiaries enrolled in managed care plans, the Washington Post reports. HHS officials plan to announce tomorrow that the "streamlined" revisions -- which one agency source calls "extensive" and which the Post reports come after an "intensive lobbying campaign" by health plans and state governments -- will grant states greater flexibility in how the protections are "carried out" while maintaining the "same broad categories" of safeguards. The rules, originally scheduled to take effect in April but delayed twice by the administration and now scheduled to be implemented sometime next year. Under the original rules, Medicaid managed care beneficiaries would be granted guaranteed access to emergency room care and women's health services, and health plans would be required to provide easily understandable information and establish a grievance process for patients dissatisfied with their care. The regulations, however, would not have given patients the right to sue their health plans, the main point of contention in the patients' rights debate in Congress (Goldstein, Washington Post, 8/15). Giving an example of how states would have greater "power over the details" of the rules, an HHS official said that states could now "set their own time frames under which a health plan would have to review a patient complaint" (Meckler, Associated Press, 8/15).

State and Industry Concerns
An unnamed HHS official said the revisions were necessary because the original rules are so "burdensome and prescriptive" that health plans might stop accepting Medicaid beneficiaries. Currently, about 56% -- nearly 19 million -- Medicaid beneficiaries are enrolled in some type of managed care plan. Addressing criticism that the revisions will delay the protections for these beneficiaries, the official said, "better that this be a good rule that will work." Since Bush took office in January, one day after the final rule was issued by the Clinton administration on Jan. 19, the National Governors Association and the National Association of State Medicaid Directors have brought their complaints to HHS Secretary Tommy Thompson, former governor of Wisconsin, saying that the rules were "too onerous." State officials, the Post reports, "particular[ly]" objected to the grievance provision of the regulations, saying that it "conflicted with similar rules already adopted by more than 40 states." Lee Partridge, health policy director of the American Public Human Services Association, said, "We had considerable concerns about the burdens they were placing ... on our ability to continue as good business partners" with private health plans.

An Unfulfilled Compromise?
Nevertheless, news of the proposed changes drew criticism from congressional Democrats and health advocacy groups. In a letter this week to Bush, Reps. John Dingell (D-Mich.), Sherrod Brown (D-Ohio), and Henry Waxman (D-Calif.) said that the Clinton rules contained "key measures to protect millions of Americans from managed care abuses --- including measures that are identical to those contained in the very bill [passed by the House last month] you support." The Post reports that it is "uncertain" whether a federal patients' bill of rights would extend protection to Medicaid managed care beneficiaries; the Senate bill "explicitly" places Medicare and Medicaid beneficiaries under the scope of the safeguards, but the language in the House bill is "somewhat looser." In addition, critics of the revisions also say they "undermine a compromise" reached as part of the 1997 Balanced Budget Act in which states were granted "new freedom" to require Medicaid beneficiaries to enter managed care without federal permission "in exchange" for HHS creating the patient protections. "It was a very delicate balance that was struck," Joan Alker, deputy director of government affairs for Families USA, said, adding, "The states have gotten their flexibility, but we're still waiting for the protections" (Washington Post, 8/15).