CMS Issues Guidance Letters to State Medicaid Directors Expanding Medicaid Flexibilities

The Centers for Medicare & Medicaid Services (CMS) recently issued guidance letters to state Medicaid directors.

The first letter, dated Jan. 4, establishes a new opportunity for states to use Medicaid funding to address social determinants of health, thereby producing better health outcomes, lowering costs and narrowing the health disparities gap. Under this expanded “in lieu of services and settings” option, Medicaid-managed care dollars can be used to address health-related social needs, for example, housing instability and food insecurity, without the need for states to apply for waivers.

The second letter, dated Jan. 5, clarified that Medicaid and Children’s Health Insurance Program (CHIP) policy for coverage and payment of interprofessional consultations is “permissible, even when the beneficiary is not present, as long as the consultation is for the direct benefit of the beneficiary.” It also noted that the consultation must be “directly relevant to the individual patient’s diagnosis and treatment, and the consulting practitioner must have specialized expertise in the particular health concerns of the patient.” Both practitioners must be in Medicaid physicians’ network.

Previously, Medicaid prohibited coverage and payment of interprofessional consultation, unless the patient was physically present during the consultation. The previous guidelines also required a complicated payment arrangement between the provider and the consultant. Specifically, the policy prohibited direct payment to the specialty consultant; rather, the provider would be paid by Medicaid and then the consultant would be paid by the provider. Under the new guidance, not only can interprofessional consultation occur outside of the physical presence of the patient, but also payment can be made directly from Medicaid to the consultant.