CMS Provides New Clarity for Family Planning Under Medicaid

Adam Sonfield, Guttmacher Institute
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Family planning services and supplies have been a part of the Medicaid program since it was first established half a century ago. And over the past several decades, Medicaid has become the dominant public funding source for family planning in the United States, accounting for three-quarters of that funding at last count. That should not come as a surprise, given the demographics of the population that Medicaid insures: According to unpublished tabulations of U.S. Census Bureau data, 20 percent of U.S. women of reproductive age (15–44) are enrolled in Medicaid, including 47 percent of those living below the federal poverty level.

This spring, the Centers for Medicare and Medicaid Services (CMS) turned an unprecedented amount of attention to these issues, recognizing Medicaid’s importance in enabling low-income women to access the family planning care they need. Sweeping new regulations governing the involvement of private-sector managed care plans in the Medicaid program and three additional pieces of guidance to state officials focusing exclusively on family planning together form the most comprehensive set of rules, principles, and recommendations for states that CMS has offered on the subject.

Free Choice of Services

Since 1972, federal law has required all state Medicaid programs to cover family planning services and supplies for all enrollees of reproductive age, and to do so without copayments or other forms of patient out-of-pocket costs. Federal regulations expand on that requirement, making it clear that Medicaid enrollees must be "free from coercion or mental pressure and free to choose the method of family planning to be used."

Beyond those basic rules, however, states have traditionally had considerable leeway in deciding which family planning services and supplies would be covered under Medicaid. States have sometimes imposed, or allowed Medicaid managed care plans to impose, additional restrictions on enrollees’ choice of methods and services in the name of controlling utilization and costs.

This started to change with the Affordable Care Act (ACA). People newly eligible for Medicaid under the ACA’s Medicaid expansion are enrolled in Alternative Benefit Plans (ABPs), which are designed to mirror private-sector health plans and therefore must comply with the ACA’s requirement to cover a wide array of recommended preventive services without cost-sharing. That includes contraceptive counseling and services and every contraceptive method for women (currently 18 of them) recognized by the Food and Drug Administration.

CMS has not required states to cover the same list of contraceptive methods for traditional Medicaid enrollees. But in a June 14 letter to state officials, the agency recommended that states cover every contraceptive method, including both prescription and over-the-counter methods, arguing that "because not all forms of contraception are appropriate for all beneficiaries, in the absence of contraindications, patient choice and efficacy should be the principal factors used in choosing one method of contraception over another."

Moreover, in both the June 14 letter and the Medicaid managed care regulations issued on April 25, CMS made it clear that many common utilization control techniques are inappropriate and must not be used when it comes to family planning care, because they interfere with enrollees’ ability to choose a method free of coercion or mental pressure. Specifically, CMS:

  • reminded states and managed care plans that cost-sharing is prohibited for family planning services and supplies, including contraceptive drugs and devices;
  • explicitly prohibited the use of so-called step therapy (requiring that a patient try one method and fail with it before trying the method of their choice);
  • barred states and plans from imposing policies that restrict a change in method, such as refusing to reimburse for the removal of an intrauterine device or contraceptive implant;
  • severely restricted the use of prior authorization by making it clear that patients must be free to choose a method based on criteria such as side effects, clinical effectiveness, whether the method is reversible, and ease of use; and,
  • discouraged practices that impose inappropriate quantity limits, such as covering only one IUD every five years, even if a previous IUD was expelled or removed for a planned pregnancy.

In addition, CMS reiterated and reinforced confidentiality protections for Medicaid enrollees, including the obligation of states, plans, and health care providers to accommodate requests to communicate with the enrollee by alternative means or at an alternative location (e.g., via e-mail rather than by paper mail at her home address). Many routine communications to enrollees in Medicaid and private insurance, particularly those related to billing and reimbursement, can inadvertently violate patient confidentiality. Protections against this possibility are particularly important for sensitive services such as family planning care.

Free Choice of Providers

Strong protections for family planning coverage must be paired with ready access to qualified providers, and Medicaid has several key protections to that effect. Most notably, long-standing federal law guarantees that Medicaid enrollees have a free choice of any qualified family planning provider, even if they are enrolled in a managed care plan that otherwise restricts enrollees’ coverage to a network of providers. Enrollees cannot be required to obtain a referral for family planning, regardless of whether the provider is in-network or out of network.

CMS’ recent regulations and guidance bolster and clarify these protections. For example, the April 25 managed care regulations set new standards to ensure that plans’ provider networks be extensive enough to meet enrollees’ needs. That includes specific standards for obstetrician-gynecologists, and a requirement that plans demonstrate that they have sufficient family planning providers in their networks to ensure timely access to care. In-network access matters, as the agency noted, because "use of network providers facilitates claims payment, helps enrollees locate providers more easily, and improves care coordination."

In addition, CMS has used its regulations and guidance to remind states and plans of other related obligations: states and plans are required to inform enrollees about their right to obtain care from the family planning provider of their choice. They must reimburse providers in a timely manner, even when an enrollee is obtaining family planning care out of network. And states must ensure Medicaid enrollees’ timely access to all covered information and services, even when health care providers and managed care plans have religious or moral objections.

In perhaps its highest profile move, CMS issued an April 19 letter to state officials making it clear that federal law prohibits them from discriminating against family planning providers. The letter was a public rejection of recent attempts in numerous states to deny Medicaid reimbursement to Planned Parenthood health centers and other providers that either offer abortion services or are affiliated with an abortion provider. CMS clarified that attempts by states to bar providers from Medicaid without legitimate evidence of wrongdoing would violate Medicaid enrollees’ right to a free choice of qualified providers. It stated explicitly that enrollees cannot be denied access to a provider solely because they offer the "full range of legally permissible gynecological and obstetric care, including abortion services." Federal courts have agreed with CMS on this interpretation of federal law.

Focus on Long-Acting Reversible Contraceptives

In addition to clarifying the obligations of states and managed care plans, CMS has taken steps to encourage states to go beyond what is merely required of them. In particular, the agency has expressed an interest in helping states and family planning providers break down barriers to Medicaid enrollees’ choice of long-acting reversible contraceptives (LARCs), namely intrauterine devices and contraceptive implants. LARC methods are many times more effective than oral contraceptives or condoms in everyday use, and are extremely cost effective in the long run.

In 2014, CMS launched a Maternal and Infant Health Initiative, which has made increasing access to and use of effective methods of contraception one of its two main pathways for improving maternal and infant health outcomes. As part of that initiative, CMS is working with other federal agencies and a selection of states to test out several new quality measures on the use of effective contraceptive methods by Medicaid enrollees. The primary measure being tested looks at use of a wide array of effective contraceptive methods. It is meant to encourage providers to ask their female patients about their pregnancy intentions and to counsel them about the full range of contraceptive options.

A secondary measure focuses exclusively on use of LARC methods. It is meant to be used by states and plans as a measure of access, to help identify providers and sites that are rarely or never offering LARCs and then help them identify and remove barriers. As CMS itself notes, the LARC-specific measure would be inappropriate if used to incentivize providers, because that could lead to coercive practices that violate enrollees’ free choice of methods.

Building on this earlier work, an April 8 bulletin from the Maternal and Infant Health Initiative and a section of the June 14 letter to state officials have detailed multiple approaches to overcoming commonly reported obstacles to making LARC methods available for Medicaid enrollees. For example, CMS highlighted state efforts to improve reimbursement for LARCs and other contraceptive methods in order to help providers offer the full range of choices. Those efforts have included unbundling payment for LARCs from other labor and delivery services, and allowing providers to bill for both an office visit and a device insertion on the same day. CMS also touted collaborations with pharmaceutical manufacturers to address the up-front costs of keeping expensive devices in stock. It even suggested that states might seek special permission from CMS to purchase contraceptive supplies up-front for providers.

Taken together, these recent actions by CMS represent a significant and welcome shift in the agency’s focus, and a recognition of Medicaid’s responsibilities as the United States’ primary public funding source for family planning services and supplies.


This article was originally published in Health Affairs Blog