Commissioners that help guide federal Medicaid policy raised concerns Thursday over why few Medicaid providers applied for federal relief funds amid the pandemic. Of the $175 billion allocated by Congress to help providers, about $15 billion has been allocated for Medicaid providers specifically.
However, despite the billions in relief available, few Medicaid and CHIP providers applied for the money, or what is referred to as phase two funding. Only about 15% of those potentially eligible applied as of Aug. 30, according to staff members from the Medicaid and CHIP Payment and Access Commission.
So far, about $2.2 billion of the $15 billion has been paid out to Medicaid providers as of Sept. 11, according to a presentation delivered by MACPAC staff to commissioners on Thursday. The deadline for phase two funding closed on Sept. 13, according to staff.
This prompted questions and concerns from commissioners.
“It’s sort of disturbing that so little of that fund has been actually distributed,” Commissioner Tricia Brooks, senior fellow at Georgetown University Center for Children and Families, said.
Early criticism of the initial federal relief funds was that Medicaid providers were largely left out. The first rescue packages were delivered based on Medicare fee-for-service revenue and net patient service revenue.
As a result, the industry clamored for regulators to funnel money toward Medicaid providers. In June HHS announced that it would, earmarking $15 billion specifically for them.
Still, the initial formulas put certain providers at an advantage, namely those that tended to be for-profit with higher-margins, or those who were already well off heading into the pandemic, according to a previous Kaiser Family Foundation analysis.
One reason relief funding was not delivered as quickly to Medicaid providers was because CMS did not have a list of participating providers like it does for Medicare. Regulators then needed to collect that information from states and the providers themselves. Although the federal government helps states pay for Medicaid, it is a state-run program.
But commissioners were left wondering why so few funds have been delivered while providers continue to report historic levels of financial stress.
“Do we have a good sense of why people aren’t applying?” Melanie Bella, chair of MACPAC, asked.
Robert Nelb, a principal analyst at MACPAC, offered some theories. “One of the challenges is just the complexity of the application process. Another challenge is sort of figuring out exactly who is eligible and who is not because many providers are part of larger organizations that maybe applied through the first phase,” Nelb said.
Before advising CMS to reopen the application process, Bella said it will be important to dig deeper into the barriers that impeded applications.
Also top of mind for commissioners was how states will begin determining eligibility once again when the public health crisis ends. The emergency declaration barred states from kicking Medicaid members off the program amid the pandemic. MACPAC is thinking about whether they should release a statement on the importance of setting up guardrails as redeterminations start up again, or wait for CMS’ guidance before commenting.
Jim Roberts with the Alaska Native Tribal Health Consortium urged commissioners to weigh in before CMS issues its own guidance to influence the outcome. He also highlighted how important it is for states to accept electronically signed documents during this time.
“We think additional guidance is needed from CMS to let the states know that they can accept other types of document products like Docu-sign,” Roberts said. “We’re in a situation where we continue to shelter in place with many of our workers. Our eligibility determination workers are working from home and it’s very difficult when a live signature is needed — a wet signature is needed — on a new application.”