Obama Administration Position Grants State Lawmakers More Control Over Medicaid Rates

Joe Jaszewski / Idaho Statesman

In his January State of the State address, Gov. Otter said he hopes to find an Idaho-specific alternative to expanding Medicaid eligibility.

Idaho policymakers may claim more leeway to lower Medicaid repayment rates based on a legal brief filed by the Obama administration yesterday. In a move that frustrated health care providers, the administration said states may contain Medicaid costs by reducing reimbursement rates. That’s according to The New York Times.

The Idaho Medical Association’s Susie Pouliot calls Medicaid reimbursement rates “a fine balance,” explaining that some medical practices in the state have already begun to limit the number of Medicaid recipients they treat.

“Especially in a rural state like ours, policymakers need to balance access to care with cost savings at the expense of providers,” Pouliot says. 

She says the administration’s position is of particular note in light of a 2011 change to Idaho Statute that repealed the annual adjustment of state Medicaid reimbursement rates to keep pace with costs. Now, the state Department of Health and Welfare must make increases through the Legislature’s annual budgeting process, Pouliot explains.

“Obviously we would be concerned about the state taking advantage of this permission from the feds, because we feel it will have an immediate impact on patient access to care if they do decide to cut rates at a drastic level,” she says.

According to the Times‘ Robert Pear, “Federal law says Medicaid rates must be “sufficient to enlist enough providers” so that Medicaid beneficiaries have access to care at least to the same extent as the general population in the same geographic area.”

Average monthly enrollment in Idaho’s Medicaid program topped 225,000 people last year. That number could grow by more than 120,000 if Idaho opts into the Medicaid expansion that is a key component of the Affordable Care Act. Gov. C.L. “Butch” Otter took the expansion off the table for the current legislative session by urging no action in his State of the State address.

The governor’s press secretary did not respond to StateImpact‘s request for comment.