Medicaid: CMS Action Needed to Ensure Compliance with Abortion Coverage Requirements
Released: 2019-02-04T00:00:00

Letter

Background

Abortion in the United States

In 1973, the U.S. Supreme Court concluded in Roe v. Wade that a woman has a fundamental right protected by the U.S. Constitution to decide whether to terminate her pregnancy. However, the Court also recognized that a state may have an interest sufficient to regulate abortion after the first trimester of the pregnancy or proscribe abortion after the fetus reaches viability, the point at which the fetus could live outside the womb. Over time, states have adopted a range of abortion- related laws or policies, including the following examples.

Gestational limits: Prohibiting abortions after a specified gestational age.

Insurance limitations: Limiting insurance coverage of abortions to certain circumstances in either publicly or privately funded insurance plans.

Laws regulating abortion providers: Requiring abortion providers to meet certain standards, such as standards that specify facility room size or corridor widths.

Mandatory counseling: Requiring specific information, including information on fetal development or gestational age of the fetus, be provided to a woman prior to an abortion.

Parental involvement: Requiring the consent or notification of one or both parents for minors seeking an abortion.

Waiting periods: Requiring a certain amount of time to elapse between informed consent—which may include mandatory counseling—and having an abortion.

Since Roe v. Wade was decided, many of these state laws have been challenged, and the Court, in reviewing these laws, has considered whether they impose an undue burden on a woman’s right to choose an abortion. Most recently, in 2016, the Court found that two Texas laws regulating abortion providers offered few, if any, health benefits and posed a substantial obstacle to women seeking abortions. Therefore, the Court found that these two Texas laws constituted an undue burden and were unconstitutional.

The number of abortions performed in the United States has steadily declined over the past 30 years, with the abortion rate reaching its lowest point in 2014—the most recent year data were available—at 14.6 abortions per 1,000 women of reproductive age, according to a 2017 study. This study attributed this decline primarily to a decrease in the number of unintended pregnancies and to a lesser extent, laws or policies that may limit women’s access to abortions.

Abortions are typically performed in a clinic or other nonhospital setting and involve one of two methods: medical abortion or surgical abortion. Medical abortions involve using prescription drugs to terminate a pregnancy. The prescription drug mifepristone, sold under the brand name Mifeprex, in combination with the prescription drug misoprostol, is the only Food and Drug Administration (FDA) approved medication for medical abortions in the United States, and is approved for use through 10 weeks gestation. FDA has restricted the administration of Mifeprex to patients in certain healthcare settings under the supervision of a certified prescriber; thus, the drug cannot be sold in retail pharmacies. According to Danco Laboratories, the manufacturer of Mifeprex, there is at least one certified Mifeprex provider in every state. Surgical abortions, which can involve different procedures depending on the stage of a women’s pregnancy, account for the majority of abortions in the United States. However, according to a recent study, the incidence of medical abortions increased 7 percent from 2011 to 2014, with medical abortions accounting for 31 percent of all nonhospital abortions in 2014.

Medicaid Coverage of Abortions

Medicaid expenditures are financed by both the federal government and the states. In order to receive federal funding for Medicaid expenditures, states must adhere to a broad set of federal requirements and administer their programs consistent with individual state plans approved by CMS. However, Medicaid, by design, allows significant flexibility for states to design and implement their programs. States have some discretion in, among other things, setting Medicaid eligibility standards and provider payment rates; determining the amount, scope, and duration of covered benefits; and developing their own administrative structures. For example, states must cover certain mandatory populations and services—including abortions in cases of rape, incest, or life endangerment—but may impose certain requirements on that coverage, such as requiring authorization before a service is provided. States may also opt to cover other optional populations and services, including abortions for which federal funding is not available.

States may also decide how Medicaid-covered services provided to beneficiaries will be delivered. For example, states may pay health care providers for each service they provide—referred to as fee-for-service (FFS)—or contract with managed care organizations (MCO) to provide a specific set of Medicaid-covered services to beneficiaries and pay them a set amount per beneficiary, typically per month. While most states use both delivery systems, the percentage of beneficiaries served through comprehensive MCOs has grown in recent years, and represented nearly 70 percent of all Medicaid beneficiaries in 2016.

Oversight of the Medicaid program is also shared by the federal government and the states, and is aimed, in part, at ensuring that funds are used appropriately and that beneficiaries have access to covered services. With respect to abortion coverage, federal law and CMS guidance outline specific requirements for federal funding to be available. For example, states that claim federal funding for abortions in the case of life endangerment must obtain a physician’s certification that the abortion is necessary for this purpose. While there is not a similar certification requirement for federal funding of abortions in cases of rape or incest, CMS guidance specifies that states may impose certain additional requirements on providers and beneficiaries as a condition of Medicaid payment for abortions eligible for federal funding, provided such requirements are reasonable and do not deny or impede coverage for such abortions.

In the case of medical abortions, federal law does not specifically require Medicaid coverage of the prescription drugs used to terminate a pregnancy. However, state Medicaid programs that opt to cover prescription drugs—which is the case in all 51 states—are generally required to cover outpatient drugs of any manufacturer participating in the Medicaid Drug Rebate Program. Danco Laboratories has a rebate agreement for Mifeprex, and, as result, states should generally cover it for abortions in the circumstances eligible for federal funding. In determining states’ compliance with this requirement, CMS guidance states that the agency will consider several factors, including a state’s authority to set limitations on covered outpatient drugs under relevant state laws.

To inform its oversight of Medicaid, CMS relies on state-reported data that contain information on multiple aspects of the program. States claiming federal funding for Medicaid services, including abortions, are required to report quarterly expenditures to CMS on the form CMS-64. CMS uses these data to pay states for the federal share of program spending and the agency is responsible for ensuring that federal payments are made appropriately. Additionally, states submit Medicaid expenditure and utilization data that can be linked to individual beneficiaries to CMS on a monthly basis through the agency’s new Transformed Medicaid Statistical Information System (T-MSIS).

Multiple Factors Could Present Challenges to a Woman’s Access to Abortions Depending on Where She Lives

Through provider interviews, we identified multiple factors that could present challenges to women accessing abortions, but the extent to which these factors were present in a state varied, as did their effect on access. In addition, the studies we reviewed examined some of these factors more than others, but often pointed to the challenges they could pose. Medicaid beneficiaries may experience further challenges accessing abortions in some states due to variation in Medicaid abortion coverage and related payment requirements.

Providers and Literature Pointed to Multiple Factors that Could Present Challenges to Women Accessing Abortions across States

We identified seven key factors as potential challenges to women accessing abortions based on our interviews with eight selected providers: (1) gestational limits; (2) mandatory counseling; (3) out-of- pocket costs; (4) parental involvement; (5) provider availability; (6) stigma and harassment; and (7) waiting periods. (See table 1.)

The extent to which these factors are present in a state varies. For example, one provider who did not identify stigma and harassment as a factor affecting women in the state it operates in noted that women from all over the country come to its clinics. The provider said this was because women see its clinics as a safer place to obtain an abortion than seeking care in their own state, where they would likely be stigmatized or harassed. Additionally, providers in some states told us that they were able to cover the entire cost of the abortion and pay for associated costs, such as transportation, for women who could not afford to pay, while providers in other states said that they could not cover the entire cost of the abortion due to funding limitations. See figure 1 for an example of differences in factors present in two states.

In addition, a factor could be more challenging in one state versus another, depending on the details of the factor and other factors present. For example, one provider noted that the 24-hour waiting period in one state it serves poses a minimal challenge, because women can complete part of the process online and only make one visit to the abortion provider. Conversely, a provider in another state said that the state’s 72- hour waiting period requires two in-person visits and that the same doctor be present at both, which can create delays in care and increase costs, particularly if the woman needs to travel a long distance for her appointments. Differences in access can also exist within a state. Most notably, some selected providers pointed out that women in a state’s rural areas typically have more limited access to abortion providers than those who live in the state’s urban areas.

The 52 studies we reviewed examined the key abortion access factors identified through our interviews with selected providers, though some factors were studied more than others. (See app. I.) Most of the reviewed studies conducted statistical analyses to evaluate the effects of a factor on abortion access and often identified access challenges. For example, nearly two-thirds of the statistical studies for the three most commonly studied factors—out-of-pocket costs, parental involvement, and provider availability—found that the factor adversely affected a measure of abortion access. (See table 2.)

The other factors identified by providers—gestational limits, stigma and harassment, mandatory counseling, and waiting periods—were less frequently examined in the reviewed studies, and the findings from these studies were more mixed. For example, gestational limits and stigma and harassment were the least studied of all the factors with only three and two studies, respectively, and the reviewed studies found both adverse effects on access, as well as effects that were statistically insignificant. While there were more studies on waiting periods, the results were similarly mixed, with at least one study suggesting that the type of waiting period could change the effect on access. This study found that while a waiting period requiring two in-person visits could delay care, the effect of waiting periods that required fewer in-person visits was not significant. Finally, for mandatory counseling, the studies we reviewed rarely found that the factor had a statistically significant effect on a measure of abortion access (2 of 10 studies).

Variation in State Coverage and Payment Requirements Could Further Challenge Medicaid Beneficiaries’ Access to Abortions

In responding to our survey, 29 states reported limiting abortion coverage for Medicaid beneficiaries to the three circumstances required under federal law—rape, incest, and life endangerment—while 21 states reported broader abortion coverage. The remaining state, South Dakota, reported that it limits abortion coverage for Medicaid beneficiaries to circumstances when the pregnancy endangers the life of the woman, and does not cover abortions in cases of rape or incest. CMS confirmed that South Dakota’s Medicaid state plan does not include coverage of abortions in cases of rape or incest, and shared a letter it sent to the state in 1994 outlining that the state’s coverage did not comply with federal law and expressing CMS’s intent to work with the state on possible solutions. However, according to CMS officials, the agency has not taken any action since that time to ensure South Dakota’s compliance, and does not have plans to do so. As a result, Medicaid beneficiaries in South Dakota do not have Medicaid coverage for abortions in cases of rape or incest.

States also varied in the extent to which their Medicaid programs covered Mifeprex, the prescription drug most commonly used for medical abortions. (See fig. 2.) As previously noted, state Medicaid programs that opt to cover prescription drugs—which is the case in all 51 states—are generally required to cover outpatient drugs of any manufacturer participating in the Medicaid Drug Rebate Program, subject to a few statutory exceptions. CMS officials told us that Mifeprex, which became a covered outpatient drug in 2001, does not meet any of the exceptions for categorical exclusion from coverage. However, 14 states reported that they do not cover Mifeprex. Without such coverage, Medicaid beneficiaries seeking abortions in these states would have to find another way to pay for the drug or undergo a surgical abortion instead. CMS officials were not aware that these states did not cover Mifeprex, and thus the agency had not taken any action to address states’ non-compliance.

Beyond differences in the scope of their abortion coverage, states varied in the types of requirements they imposed as a condition of Medicaid payment for abortions eligible for federal funding, which could also affect women’s access to the procedure. Provider certification that the abortion met the circumstances of rape, incest, or life endangerment was the most common requirement reported by states. Other commonly reported requirements included provider certification of counseling, beneficiary certification of rape or incest, documentation of rape or incest, and prior authorization by the state Medicaid agency. (See table 3.)

The details of particular requirements also varied across states. For example, among the 32 state Medicaid programs that claimed federal funding for abortions, we reviewed available documents implementing the federal requirement that physicians certify the abortion is necessary in the case of life endangerment and found differences among the states. In particular, some states’ documents incorporated the statutory wording of the life endangerment exception, others incorporated the wording of the related federal regulation, and others used different wording. Additionally, CMS officials told us that the agency does not require that physicians fill out a specified form to meet the certification requirement, and the 32 states varied in whether or not they had such a form. In another example, of the 14 states that required documentation of cases of rape or incest, some states specifically required a police report, and other states allowed the beneficiary the option of either filing a police report or filing a report with another public agency, such as a public health agency.

Finally, states also varied in terms of the number of requirements they imposed specific to Medicaid payment of abortions eligible for federal funding. For example, some states had no requirements specifically for these abortions, while one state had all five of the requirements most commonly reported. In general, states that used state-only funds to cover abortions in circumstances beyond those eligible for federal funding had fewer requirements. (See fig. 3.)

Our interviews with the eight selected providers suggest that the scope of a state’s Medicaid abortion coverage and related payment requirements could affect abortion access. For example, six selected providers said that they rarely submit abortion claims to state Medicaid programs that limit abortion coverage to circumstances eligible for federal funding, in part, because obtaining payment is challenging; involves multiple, often unclear requirements; and frequently results in denied claims. One of these providers noted that not obtaining Medicaid payment puts additional pressure on already strained resources, affecting its ability to cover abortions for women in general. Conversely, two providers operating in states with broader Medicaid abortion coverage stated that they frequently submit claims for abortions and receive payment.

State-reported information on denied abortion claims suggests that the difficulty the selected providers faced in obtaining Medicaid payment for abortions eligible for federal funding in certain states could exist in other states. Specifically, among the 15 states reporting information on denials of payment for abortions in circumstances eligible for federal funding, denial rates ranged from 4 percent to nearly 90 percent, with about half of the 15 states reporting denial rates of 60 percent or more. While we did not ask states to report on their reasons for denying Medicaid payment for abortions, some states provided this information. For example, one state said that its high denial rate is due to the initial denial of all claims for abortions in cases of life endangerment that do not have the recipient’s address, as required by federal regulation. In addition, 7 states reported having no payment denials, 4 of which did not receive any claims for abortions eligible for federal funding over the 5- year period.

Findings from the studies we reviewed also highlight the potential effect of states’ Medicaid coverage and payment requirements on a woman’s access to abortions. Eight studies that examined the effect of limiting Medicaid abortion coverage to those eligible for federal funding found that such coverage limits were associated with a reduction in the number of women having abortions. For example, one of these studies analyzed national data from 1985 to 2005 and found that limiting Medicaid coverage to abortions eligible for federal funding reduced a state’s abortion rate by 8 to 9 percent. In addition, six studies that examined providers’ experiences obtaining Medicaid payment for abortions corroborated many of the concerns raised by our selected providers. For example, one study examining abortion provider experiences in six states found that many providers choose not to bill Medicaid for abortions, because obtaining payment for the procedure requires a significant time commitment, and when states do pay, the amount is typically lower than the cost of providing the abortion.

Information on Abortions Eligible for Federal Medicaid Funding Is Incomplete, but Showed a Wide Range in the Number of Procedures Covered across States

The usefulness of federal information—namely CMS-64 data—for identifying the number of abortions eligible for federal Medicaid funding is limited, which could hamper CMS’s efforts to ensure proper payments and states’ coverage of abortions in cases of rape, incest, or life endangerment. In particular, the CMS-64 does not include the following information.

Abortions states paid for through MCOs. The CMS-64 does not include information on abortions eligible for federal funding provided to Medicaid beneficiaries through MCOs, because states are not required to identify expenditures for individual managed care services on the form. In our survey, 23 states reported claiming federal Medicaid funding for abortions from fiscal years 2013 through 2017 that were, at least in part, paid for through MCOs.

Abortions in states reporting FFS abortions incorrectly. The CMS-64 is also an incomplete information source, because of inaccurate state reporting. CMS requires states to report FFS abortions for which they claim federal funding on line 14 of the form. However, in our survey, eight states reported that they include the costs of such abortions on other lines of the CMS-64, such as on the lines for outpatient hospital or physician services. According to agency officials, CMS conducts quarterly reviews of the CMS-64 data states report. CMS officials also said that reviewers are not required to confirm whether states that report no abortions on line 14 have accurately reported the information, which means that reviewers may not identify states reporting abortions elsewhere. As a result, information from the CMS-64 does not accurately reflect the number of FFS abortions for all states that may be claiming federal Medicaid funding.

In addition, because state Medicaid programs use the CMS-64 to claim federal funding for services provided, the form does not include information from states that covered abortions for Medicaid beneficiaries in circumstances of rape, incest, or life endangerment, but did not seek federal funding for those costs. In our survey, 15 states—accounting for nearly half the Medicaid population nationwide—reported that, from fiscal years 2013 through 2017, they did not claim federal funding for abortions covered by their programs.

In comparison with the CMS-64 data, the information states reported through our survey was more comprehensive. For example, 16 states claiming federal Medicaid funding provided us information on the number of abortions paid for through MCOs, information that was not captured on the CMS-64 as individual services, but often represented a significant portion of the abortions covered by these states. Similarly, the 8 states we identified as incorrectly reporting their FFS abortions on the CMS-64 reported the number of such abortions to us, and these states accounted for half of all FFS abortions for which states reported claiming federal funding in our survey. As a result, the number of abortions for which states claimed federal funding that was reported to us was substantially higher than the number in CMS’s annual reports to Congress on such abortions, which are based on CMS-64 data. From fiscal year 2013 to fiscal year 2016—the latest year of data available from CMS’s annual reports—our survey identified nearly 5,000 abortions for which states claimed federal funding versus the approximately 550 identified in the agency’s reports.

However, the information on abortions eligible for federal funding that states reported to us was also incomplete.

Nine states, accounting for about one-third of total Medicaid enrollment, were unable to provide any information. These states use only state funds to pay for abortions, and, for example, do not require providers to report the circumstance for the abortion when requesting Medicaid payment, including those eligible for federal funding.

Six states provided only FFS information, though they also reported paying for abortions through MCOs. Because over 60 percent of Medicaid beneficiaries in five of these states are enrolled in MCOs, information was not available for a significant portion of their beneficiaries.

There were also other, smaller gaps in the states’ information. For example, six states were not able to provide information for at least 1 year of the survey time frame, and one state was not able to provide information on abortions in the case of life endangerment, which, based on information provided by other states, typically accounts for the majority of abortions eligible for federal Medicaid funding.

While not always complete, 42 states reported information to us on abortions eligible for federal Medicaid funding, which showed a wide range in the number of procedures covered across states. Most of these states (37 of 42) reported covering 15 or fewer abortions eligible for federal funding per year, on average, from fiscal years 2013 through 2017, though this number may be understated in some states due to the data limitations discussed above. However, during this same time frame, 3 states (Iowa, South Dakota, and Wyoming) reported covering no abortions eligible for federal funding, and 2 states (Nevada and Pennsylvania) reported annually covering an average of more than 300 and 700 such abortions, respectively. (See app. II.)

Additionally, when excluding Nevada and Pennsylvania, states reporting information showed an aggregate decrease in the number of abortions eligible for federal Medicaid funding they covered during the fiscal year 2013 through fiscal year 2017 time period (from 383 to 200). When data from these two states were included, there was an aggregate increase (from 876 to 1,544), as the number of abortions covered by Nevada and Pennsylvania was much higher in later years.

T-MSIS could be a potential future source of more complete information on the number of abortions eligible for federal Medicaid funding. However, in two reports issued in January 2017 and December 2017, we examined T-MSIS implementation and identified issues with the completeness and comparability of T-MSIS data across states, as well as uncertainty with respect to how CMS will ensure the quality of the data or use them for oversight purposes. Based on our findings, we recommended that CMS expedite efforts to ensure the quality of T-MSIS data and articulate its plan and associated time frame for using these data for oversight. CMS agreed with these recommendations, but as of October 2018, the agency had not fully implemented them, and we continue to believe that these recommendations remain valid. Further, due to ongoing concerns regarding the quality of T-MSIS data and the small number of abortion services relative to other Medicaid services, CMS officials said that the agency has focused its oversight efforts in other areas.

Conclusions

CMS has a central role in monitoring states’ compliance with federal requirements for coverage of abortions eligible for federal funding in the Medicaid program. However, our work identified limitations in CMS’s oversight. In the case of South Dakota, CMS is aware that the state does not cover abortions in cases of rape or incest, as required by federal law, but has not taken any action in 25 years to ensure the state’s compliance. CMS was not aware of the14 states that reported not covering Mifeprex despite the requirement to do so under federal law. Without such coverage, Medicaid beneficiaries seeking abortions in these states would have to find another way to pay for the drug or undergo a surgical abortion. Finally, incomplete federal data on the number of abortions eligible for federal Medicaid funding—in part, due to inaccuracies that we identified in the reporting of these expenditures by eight states—limit the agency’s ability to ensure that states are covering such abortions and that federal payments are made appropriately.

Recommendations

We are making the following three recommendations to the Administrator of CMS.

CMS should take action to ensure South Dakota’s Medicaid state plan provides coverage for abortions in cases of rape and in cases of incest, in addition to life endangerment, to comply with federal law, which currently requires such coverage. (Recommendation 1)

CMS should determine the extent to which state Medicaid programs are in compliance with federal requirements regarding coverage of Mifeprex and take actions to ensure compliance, as appropriate. (Recommendation 2)

CMS should determine the extent to which state Medicaid programs are accurately reporting fee-for-service abortions on line 14 of the CMS-64 and take actions to ensure accuracy, as appropriate. (Recommendation 3)

Agency Comments

We provided a draft of this product to the Department of Health and Human Services for comment. In its written comments, HHS concurred with our recommendations and indicated a commitment to working with states to address them. In doing so, HHS noted that while CMS encourages states to design their Medicaid programs to meet the needs of local beneficiaries, states must operate their programs consistent with all applicable federal laws, including those referenced in our report. HHS also provided technical comments, which we incorporated as appropriate. HHS’s comments are reprinted in appendix III.

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If you or your staff have any questions about this report, please contact me at (202) 512-7114 or yocomc@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs can be found on the last page of this report. Major contributors to this report are listed in appendix IV.

Appendix I: Literature Review

To identify studies examining factors that may present challenges to women, including Medicaid beneficiaries, accessing abortions, we conducted a literature review of recently published studies. Specifically, we searched for relevant studies published from January 2007 through September 2017. We searched various peer reviewed and industry journals using databases, including ProQuest, CINAHL, Dialog, and Scopus. Key terms included various combinations and iterations of “abortion,” “access,” “challenge,” “limit,” “restrict,” “obtain,” “deny,” “state regulation,” “state law,” “state rule,” “state policy,” “Medicaid,” “parental consent,” “parental notification,” “counseling,” “waiting period,” “ultrasound,” “ambulatory surgical,” “surgical center,” “admitting privileges,” “hospital distance,” “hospital proximity,” “hospital miles,” “room size,” “corridor,” “procedure room,” “transfer patient,” “targeted regulation of abortion providers,” “TRAP law,” “stigma,” “violence,” “protest,” harass,” “gestational limit,” “term limit,” “out-of-pocket,” “expense,” “provider availability,” “provider shortage,” and “provider participation.” From our search, we identified 637 studies.

We systemically reviewed the abstracts of these studies to determine which ones examined factors that may present challenges to women accessing abortions. In doing so, we excluded studies where the research (1) was not focused on the United States; (2) was not empirically analytical, such as theoretical articles and opinion pieces; (3) did not directly analyze the effect of a factor on a woman’s ability to obtain an abortion (i.e., analyzed the effect of a factor on mental health outcomes, contraception use, or unintended birth); (4) did not focus on the civilian population; (5) evaluated personal characteristics or issues that may present challenges to obtaining abortions, such as income level or age; and (6) analyzed a number of factors together so the individual effect of any one factor could not be identified. For the studies remaining, we examined their methodologies to determine whether they were sufficiently reliable for the purposes of our reporting objectives. After taking these steps, 52 studies remained.

The 52 studies were then reviewed and coded by analysts to determine the type of abortion access factor identified. We focused our analysis on key factors identified through interviews with selected abortion providers: (1) gestational limits; (2) mandatory counseling; (3) Medicaid challenges; (4) out-of-pocket costs, (5) parental involvement, (6) provider availability, including certain state laws regulating abortion providers; (7) stigma or harassment; and (8) waiting periods. Table 4 identifies these 52 studies and summarizes the factors they examined.

Appendix II: State-Reported Information on the Number of Covered Abortions Eligible for Federal Medicaid Funding

Appendix III: Comments from the Department of Health and Human Services

Appendix IV: GAO Contact and Staff Acknowledgements

GAO Contact

Carolyn L. Yocom, (202) 512-7114 or yocomc@gao.gov.

Staff Acknowledgements

In addition to the contact named above, Susan Anthony (Assistant Director), Rachel Svoboda, (Analyst-in-Charge), Marcia Crosse, Julianne Flowers, Sandra George, Ashley Nurhussein, Sara Rizik, and Jennifer Rudisill made key contributions to this report. Also contributing were Sarah Gilliland, Kaitlin Farquharson, Drew Long, Vikki Porter, and Eric Wedum.