As Pandemic-Era Policies End, Medicaid Programs Focus on Enrollee Access and Reducing Health Disparities Amid Future Uncertainties: Results from an Annual Medicaid Budget Survey for State Fiscal Years 2024 and 2025
Executive Summary
State fiscal years begin on July 1 except for these states: New York on April 1; Texas on September 1; Alabama, the District of Columbia, and Michigan on October 1.
Florida did not respond to the 2024 survey. In some instances, we used publicly available data or prior years’ survey responses to obtain information on Florida’s Medicaid program. However, unless otherwise noted, Florida is not included in counts throughout the survey.
Introduction
The four states that had not completed unwinding by August 2024 were Alaska, the District of Columbia, North Carolina, and New York.
Florida did not respond to the 2024 survey. In some instances, we used publicly available data or prior years’ survey responses to obtain information on Florida’s Medicaid program. However, unless otherwise noted, Florida is not included in counts throughout the survey.
State fiscal years begin on July 1 except for these states: New York on April 1; Texas on September 1; Alabama, the District of Columbia, and Michigan on October 1.
Delivery Systems
Sparer, Michael. “Medicaid managed care: costs, access, and quality of care.” Research Synthesis Report No. 23, Robert Wood Johnson Foundation (2020).
Franco Montoya, Daniela, Puneet Kaur Chehal, and E. Kathleen Adams. "Medicaid managed care's effects on costs, access, and quality: an update." Annual Review of Public Health 41.1 (2020): 537-549. https://doi.org/10.1146/annurev-publhealth-040119-094345
Medicaid and CHIP Payment and Access Commission, “Managed care’s effect on outcomes,” September 2023, https://www.macpac.gov/subtopic/managed-cares-effect-on-outcomes/
Federal regulations require actuarially sound capitation rates that are “projected to provide for all reasonable, appropriate, and attainable costs that are required under the terms of the contract and for the operation of the MCO, PIHP, or PAHP for the time period and the population covered under the terms of the contract . . .” 42 CFR §438.4(a).
Medicaid and CHIP Payment And Access Commission, “Medicaid Managed Care Capitation Rate Setting,” March 2022, https://www.macpac.gov/wp-content/uploads/2022/03/Managed-care-capitation-issue-brief.pdf
Connecticut does not have capitated managed care arrangements but does carry out many managed care functions through ASO arrangements that include payment incentives based on performance, intensive care management, community workers, educators, and linkages with primary care practices.
Vermont runs a public, non-risk bearing prepaid health plan delivery model under its Section 1115 Global Commitment to Health waiver.
Idaho’s Medicaid-Medicare Coordinated Plan has been recategorized by CMS as an MCO but is not counted here as such since it is secondary to Medicare. Publicly available data used to verify status of Florida (state did not respond to the 2024 survey).
For purposes of this report, states contracting with “PCCM entities” are also counted as offering a PCCM program. In addition to furnishing basic PCCM services, PCCM entities also provide other services such as intensive case management, provider contracting or oversight, enrollee outreach, and/or performance measurement and quality improvement. 42 CFR §438.2.
Florida did not respond to the 2024 survey. Therefore, the status of its dental services PHP was confirmed via publicly available data.
The 85% minimum MLR is the same standard that applies to Medicare Advantage and private large group plans.
42 CFR § 438.8(c)
During the rating period, states may increase or decrease rates by a “de minimis amount” per rate cell. Federal regulations define the de minimis amount as 1.5% per rate cell (§438.7(c)(3)). If, however, the state initially elects to certify a rate range for a rate cell, the state is not permitted to use this de minimis change authority but may increase or decrease a capitation rate within a rate range by up to 1% during the rating period without submission of a new rate certification as long as the resulting rate does not fall outside of the 5 percent range limit allow by federal regulations (42 CFR §438.4(c)(2)(iii)).
One state, Illinois, reported encouraging rather than requiring employment of CHWs, and New Jersey reported plans to implement a voluntary CHW pilot program for MCOs in FY 2025 (these voluntary strategies not included in count).
Provider Rates and Taxes
Social Security Act Section 1902(a)(30)(A) and 42 CFR Section 447.204.
CMS “Medicaid SPA Processing Tools for States” webpage; https://www.medicaid.gov/resources-for-states/spa-and-1915-waiver-processing/medicaid-spa-processing-tools-for-states/index.html#:~:text=As%20part%20of%20a%20strategy,as%20more%20tools%20are%20developed
42 CFR Sections 438.6 and 438.60.
Permissible under 42 CFR Section 438.6(c).
89 Fed. Reg. pp. 40542-40874.
42 CFR Section 442.43.
42 CFR Section 438.207(b)(3).
42 CFR Section 438.6(c)(2)(i).
42 CFR Section 438.6(c)(2)(iii).
Medicaid and CHIP Payment and Access Commission, “Medicaid Base and Supplemental Payments to Hospitals,” April 2024, https://www.macpac.gov/publication/medicaid-base-and-supplemental-payments-to-hospitals/
42 CFR Section 433.68.
Social Security Act Sections 1902(a)(13)(A)(iv) and 1923.
Medicaid and CHIP Payment And Access Commission, “Medicaid Base and Supplemental Payments to Hospitals,” April 2024, https://www.macpac.gov/publication/medicaid-base-and-supplemental-payments-to-hospitals/
Ibid.
Vermont also reported an SDP in place for hospital services. While Vermont does not contract with MCOs, under its Global Commitment to Health Section 1115 demonstration waiver, the Department of Vermont Health Access (DVHA) acts as a public, non-risk-bearing prepaid inpatient health plan.
Office of Governor Jim Pillen Press Release, Gov. Pillen, State Senators, and Healthcare Leaders Celebrate Legislation to Provide $1 Billion Annual Boost to Nebraska’s Hospitals, March 29, 2024, https://governor.nebraska.gov/press/gov-pillen-state-senators-and-healthcare-leaders-celebrate-legislation-provide-1-billion
Medicaid and CHIP Payment And Access Commission, “Nursing Facility Fee-for-Service Payment Policy,” December 2019, https://www.macpac.gov/wp-content/uploads/2019/12/Nursing-Facility-Fee-for-Service-Payment-Policy.pdf
Florida did not respond, and Tennessee’s Medicaid program is entirely managed care so there are no fee-for-service rates to report on.
The HCBS and home health payment rate data reported from this survey are not directly comparable to data collected in KFF’s annual HCBS survey. The surveys ask different questions and the Budget Survey is a statewide survey whereas the HCBS Survey is of officials administering HCBS programs, including home health, personal care, and waiver services.
S. Silow-Carroll, K. Gifford, C. Rozenzweig, K. Ryland and A. Pham, “Medicaid’s Non-Emergency Medical Transportation Benefit: Stakeholder Perspectives on Trends, Challenges, and Innovations,” August 2021, https://www.healthmanagement.com/wp-content/uploads/HMA.NEMT_.Report.for_.Publication.Aug_.2021.pdf
Government Accountability Office, Medicaid: CMS Needs More Information on States’ Financing and Payment Arrangements to Improve Oversight (Washington, DC: Government Accountability Office, December 2020), https://www.gao.gov/assets/gao-21-98.pdf
FL did not respond to the 2024 survey; publicly available data used to verify taxes in place.
The Deficit Reduction Act amended the federal Medicaid provider tax law to restrict the use of MCO taxes effective July 1, 2009. Prior to that date, states could apply a provider tax to Medicaid MCOs that did not apply to MCOs more broadly and could use that revenue to match Medicaid federal funds. Since 2009, several states have implemented new MCO taxes that tax member months rather than premiums and that meet the federal statistical requirements for broad-based and uniform taxes. In addition to the 20 states reporting implemented MCO taxes, some states have implemented taxes on health insurers more broadly that generate revenue for their Medicaid programs.
Twenty-three states reported planned increases to one or more provider taxes in FY 2025: Arizona, California, Colorado, District of Columbia, Hawaii, Idaho, Kansas, Kentucky, Maine, Maryland, Massachusetts, Mississippi, Nevada, New Jersey, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Washington, and West Virginia. These increases were most commonly for taxes on hospitals.
Benefits
42 CFR. Section 440.230(b).
Medicaid managed care organizations, which deliver care to more than two-thirds of all Medicaid enrollees, may also limit services based on medical necessity or utilization management tools (e.g., prior authorization) but services must be no less (in amount, duration, and scope) than offered under fee-for-service.
1902(a)(43) and 1905(a)(4)(B) of the Social Security Act.
In a few instances throughout this section, publicly available data (e.g., Section 1115 waiver documents or Medicaid State Plan Amendment documents) was used to supplement reported state benefit changes.
The Medicaid Certified Community Behavioral Health Center (CCBHC) Medicaid demonstration program aims to improve the availability and quality of ambulatory behavioral health services and to provide coordinated care across behavioral and physical health. CCBHCs provide a comprehensive range of nine types of services. The CCBHC demonstration program was first established by the Protecting Access to Medicare Act of 2014; more recently, the 2022 Bipartisan Safer Communities Act allocated funds for additional planning grants to states to participate in the demonstration.
The 11 states that reported adding or expanding crisis services are: Connecticut, Illinois, Louisiana, Maine, Maryland, Montana, Nebraska, New Mexico, South Carolina, West Virgina, and Wisconsin.
HHS Office of the Assistance Secretary for Planning and Evaluation, Contingency Management for the Treatment of Substance Use Disorders: Enhancing Access, Quality, and Program Integrity for an Evidence-Based Intervention, November 2023, https://aspe.hhs.gov/sites/default/files/documents/72bda5309911c29cd1ba3202c9ee0e03/contingency-management-sub-treatment.pdf
Diamond State Health Plan (DSHP) Section 1115 waiver approval, May 2024, https://www.medicaid.gov/medicaid/section-1115-demonstrations/downloads/de-dshp-dmntn-appvl-05172024.pdf
California Advancing and Innovating Medi-Cal (CalAIM) Section 1115 waiver approval, December 2021, https://www.medicaid.gov/medicaid/section-1115-demonstrations/downloads/wa-medicaid-transformation-ca-06302023.pdf
Health and Ending Addiction through Recovery and Treatment Demonstration (HEART) Section 1115 waiver approval, February 2024, https://www.medicaid.gov/medicaid/section-1115-demonstrations/downloads/mt-heart-cms-amendment-approval-20240226.pdf
Medicaid Transformation Project 2.0 Section 1115 waiver approval, June 2023, https://www.medicaid.gov/medicaid/section-1115-demonstrations/downloads/wa-medicaid-transformation-ca-06302023.pdf
Hawaii QUEST Integration Section 1115 waiver extension request, January 2024, https://www.medicaid.gov/medicaid/section-1115-demonstrations/downloads/hi-quest-pa-01172024.pdf
Michigan 1115 Behavioral Health Demonstration extension request, April 2024, https://www.medicaid.gov/medicaid/section-1115-demonstrations/downloads/mi-behavioral-health-demo-extn-appl-req-pa.pdf
Rhode Island Comprehensive Demonstration Section 1115 waiver extension request, May 13 2024, https://www.medicaid.gov/medicaid/section-1115-demonstrations/downloads/ri-compr-demo-hrsn-cm-adnm-extnsn-aplctn-pa.pdf
West Virginia Creating a Continuum of Care for Medicaid Enrollees with Substance Use Disorders (SUD) Section 1115 waiver extension request, May 2022, https://www.medicaid.gov/medicaid/section-1115-demonstrations/downloads/wv-creating-continuum-care-medicaid-enrollees-sud-ext-req-06012022.pdf
The 14 states that reported expanding coverage of doula services are: Arizona, Colorado, Delaware, Illinois, Kansas, Massachusetts, Missouri, New Hampshire, New York, Ohio, Oklahoma, Pennsylvania, South Dakota, and Washington. Publicly available information was used to confirm the target implementation date of Washington’s doula benefit: https://www.hca.wa.gov/billers-providers-partners/program-information-providers/doulas
The 8 states that reported expanding coverage of lactation consultation and breastfeeding supports are: Colorado, Connecticut, Illinois, Missouri, Nebraska, New Hampshire, New Mexico, and Tennessee.
South Dakota Medicaid Billing and Policy Manual, Pregnancy Program, August 2024, Pregnancy_Program.pdf (sd.gov)
New Jersey FamilyCare Comprehensive Demonstration, March 2023, nj-1115-cms-exten-demnstr-aprvl-03302023.pdf (medicaid.gov)
MassHealth Medicaid and Children’s Health Insurance Program (CHIP) Section 1115 Demonstration, Special Terms and Conditions, April 2024, https://www.mass.gov/doc/masshealth-amendment-stcs-4-19-24-0/download
Beginning October 1, 2023, Section 11405 of the Inflation Reduction Act (IRA) requires Medicaid coverage for approved adult vaccines recommended by the Advisory Committee on Immunization Practices (ACIP) and their administration, without cost sharing.
The National Institute for Medical Respite Care reports Michigan’s recuperative care benefit, approved outside of Section 1115 waiver authority, will be funded using a combination of state general fund dollars (for room and board services) and federal Medicaid match (for care coordination services). National Institute for Medical Respite Care, Issue Brief: Status of State-Level Medicaid Benefits for Medical Respite Care (January 2024), https://nimrc.org/wp-content/uploads/2024/01/Status-of-State-Level-Benefits-for-Medical-Respite-Care-4.pdf
CMS, Coverage of Health-Related Social Needs (HRSN) Services in Medicaid and CHIP (November 2023, available at Coverage of Health Related Social Needs Services in Medicaid and CHIP.
See also KFF Section 1115 Medicaid Waiver Tracker, available at https://www.kff.org/medicaid/issue-brief/medicaid-waiver-tracker-approved-and-pending-section-1115-waivers-by-state/
A Section 1115 waiver is generally required to include room and board as part of a medical respite benefit. As of October 2, 2024, 7 states (California, Illinois, Massachusetts, New Mexico, New York, North Carolina, and Washington) have approved Section 1115 waivers for medical respite services and 6 states (District of Columbia, Hawaii, Kentucky, Rhode Island, Utah, and Vermont) have Section 1115 waiver requests pending.
eMedNY New York State Medicaid Provider Policy Manual: Community Health Worker Services Policy Manual, https://www.emedny.org/ProviderManuals/CommunityHealth/PDFS/CHW_Policy_Manual.pdf
State of New Mexico Medical Assistance Program Manual Supplement: Implementation of Community Health Workers (CHW) and Community Health Representatives (CHR), May 2024, https://www.hca.nm.gov/wp-content/uploads/Final-24-08-Supplement-CHW-CHR-LR_TDG5.20.24-003-1.pdf
Georgia State Plan Amendment (#24-0005), August 2024, GA-24-0005.pdf (medicaid.gov)
Nebraska Department of Health and Human Services, Medicaid Dental Care, https://dhhs.ne.gov/Pages/Medicaid-Dental-Care.aspx
Department of Vermont Health Access, Advisory: Dental Benefit Changes are being Implemented July 1, 2023, July 2023, July2023Advisory.pdf (vtmedicaid.com)
Methods
State fiscal years begin on July 1 except for these states: New York on April 1; Texas on September 1; Alabama, the District of Columbia, and Michigan on October 1.
Florida did not respond to the 2024 survey. In some instances, we used publicly available data or prior years’ survey responses to obtain information for Florida. However, unless otherwise noted, Florida is not included in counts throughout the survey.