Idaho temporarily delays Medicaid cuts to services for developmentally disabled

After receiving harsh criticism over its decision to slash Medicaid reimbursement rates for in-home care for developmentally disabled individuals, the Idaho Department of Health and Welfare (Department) is delaying the reimbursement rate reductions by one month, to February 1, 2016. Previously, the Department announced that starting on January 1, 2016, rates would be returning to their 2006 levels, which would amount to as much as a 46 percent cut in daily reimbursement rates for providers who offer in-home care at an “intense level.”

Rate challenge

The rate reduction comes in response to the U.S. Supreme Court’s decision in Armstrong v. Exceptional Child Center, Inc. (135 S. Ct. 1378, 2015), in which the court held that providers could not challenge state-determined Medicaid rates in federal courts (see High court reverses 9th Cir.; won’t allow providers to bring private action to challenge Medicaid reimbursement, Health Law Daily, March 31, 2015). The decision overturned a previous ruling by a lower court that increased reimbursement rates based on a challenge to the state’s practice of keeping rates at 2006 reimbursement levels despite evidence suggesting that the costs of providing such care had increased.

Dramatic cuts

Advocates say the rate reductions are severe, amounting to a 15 percent cut in real reimbursement, when taking into account the general rate of inflation. This means that a provider that currently receives $500 per day for providing in-home services at the “intense” level will receive $270 for the same services. However, the Department says that only 200 individuals receive intense level care and that the reimbursement rates for the largest group of participants will be reduced by only $23 per day. Rates for the lowest level of support were cut by 37 percent and nine percent for “high” level of support services.

Provider concerns

Health care providers criticized the timing of the announcement, which came close to the holidays and gave less than 30 days’ notice. Others say that they cannot continue to provide services after the rate reductions go into effect, which will force developmentally disabled individuals to go into state institutions.

The Department previously said that the short timeframe for the rate changes was necessary because delaying the rate reduction would cost the state $1 million per month. However, the Department backed off on the January implementation rate after realizing that it would not be enough time for providers and beneficiaries to come up with alternative plans and now intends on implementing the rate reduction on February 1, 2016.

The Department also said that it would continue to review the rates to ensure that the participants have access to quality services.