The United States House of Representatives passed H.R. 3716, the “Ensuring Terminated Providers are Removed from Medicaid and CHIP Act.” The Act, introduced in October 2015 by Larry Bucshon, amends Title XIX (Medicaid) and Title XXI (Children’s Health Insurance Program [CHIP]) of the Social Security Act to prohibit federal payment under Medicaid for nonemergency services given by providers whose participation in Medicaid, Medicare, or CHIP has been terminated.
Under current law, a state is responsible for excluding providers from Medicaid participation who have been terminated under any state’s Medicaid program or Medicare. In addition to excluding providers who have been terminated under CHIP, the bill also revises a state’s reporting requirements with respect to terminating a provider under a state plan. States shall now require each Medicaid or CHIP provider to enroll with the state by providing specified identifying information. When informing the Department of Health and Human Services (HHS) that a provider has been terminated under a state plan, the state must also submit information regarding the termination date and reason for termination. HHS is to include termination notifications in a database.
Additionally, this bill requires states to have a system for notifying managed care organizations (MCOs) when a provider is terminated under Medicaid, Medicare, or CHIP. A contract between the state plan and an MCO must allow for such providers to be excluded from participation in the MCO provider network.
Background
This bill was brought about because of a report issued by the Office of Inspector General (OIG). The OIG report found that even with a provision in the Affordable Care Act which forces states to terminate the participation of a provider found to be engaging in fraud in any other state, twelve percent of providers terminated for cause from a state Medicaid program during 2011 were active in another state several years later. These Medicaid programs paid $7.4 million to ninety-four providers for services performed after each provider’s termination for cause by the initial state.
The report also highlighted some of the issues that are complicating state’s abilities to terminate providers, most of which were taken under advisement by Congress and were mentioned earlier as new provisions of the law. Previously, of the forty-one states that used managed care to deliver Medicaid services, twenty-five of them did not require providers who participated via management care to be directly enrolled with the state Medicaid agency. If a state has not directly enrolled a provider, it cannot terminate that provider, and it may not even be aware that the provider is participating in its Medicaid program. Another complication, according to the OIG report, is that some states misunderstand that if a provider has an active license from the relevant state board, the state Medicaid agency should defer to the judgment of that board and not terminate the provider for cause.
Conclusion
According to the House Committee on Energy and Commerce, the bill offers a “one-two punch” to help strengthen Medicaid. For one, it gets rid of bad actors by ensuring that providers who are terminated from Medicare or a state Medicaid program for fraud, integrity, or quality concerns, are terminated from all other state Medicaid programs. Second, the bill expands access beyond just the emergency room. Beneficiaries under fee-for-service or primary care case management programs will now have a directory of physicians who are participating in the program.
According to Chairman Fred Upton, “This week, Republicans and Democrats will help deliver an important ‘one-two punch’ to strengthen Medicaid for the most vulnerable – cutting back on fraud and increasing access. It’s an important step forward as we work to strengthen Medicaid and promote meaningful 21st century reforms.”
After this bipartisan approval in the house, the bill needs to be voted on by the Senate before final approval by President Obama, before coming law.