Vermont Medicaid agency says S.53 needs funding, time and federal review before covering doula services

The Department of Vermont Health Access told the House Health Care Committee on Thursday, May 8, that it cannot recommend Medicaid coverage of doula services under S.53 as written because the bill lacks funding and would trigger significant administrative and federal-review requirements.

The department’s testimony matters because Medicaid coverage would affect Vermont’s pregnant people and perinatal providers and would have an estimated fiscal impact on the state Medicaid program. DVHA officials said the agency agrees with the intent of S.53 but that the proposal, without an appropriation and without changes to provider enrollment and federal approvals, would be difficult to implement and could force cuts elsewhere in Medicaid.

“For the record, my name is Alex McCracken. I’m the director of communications and legislative affairs with the Department of Vermont Health Access,” Alex McCracken said in opening testimony. “While DVHA agrees with the intent of this bill, the department is not able to recommend coverage of doula services at this time.”

McCracken outlined three primary concerns. First, S.53 contains no appropriation to pay for a new Medicaid benefit. He said DVHA’s analysis indicates a wide range of potential cost outcomes depending on utilization, and at the high end the agency estimates about $1,200,000 gross annually. “Vermont Medicaid cannot support an unfunded mandate with a significant fiscal impact,” McCracken said. He also noted the joint fiscal office’s lower-end estimate, which the committee quoted as roughly $420,000, and said the cost depends on utilization assumptions (DVHA’s review put utilization in a 10–30% range).

Second, McCracken said adding doula services would require major programmatic changes to the Medicaid Management Information System (MMIS) to enroll a new provider type and add service codes. “MMIS changes can take over a year to implement and require significant financial and administrative resources,” he testified, adding that Vermont Medicaid’s MMIS queue has limited capacity and that changes must be prioritized against other required updates.

Third, DVHA said federal approval would be required. McCracken testified that covering doula services would likely require a Medicaid state plan amendment (SPA), which opens the state plan to federal review by the Centers for Medicare & Medicaid Services (CMS). “We are open to federal scrutiny. And given the current context, that presents more unknowns. It presents greater risks,” he said, urging caution in seeking a SPA because of “the current volatility and uncertainty in the federal environment.” He also said that establishing coverage would require health-care administrative rulemaking, which can take up to 18 months to develop and implement.

McCracken raised a related concern about certification and workforce eligibility. He said DVHA is not confident that the Office of Professional Regulation’s voluntary certification proposal from the Sunrise study would meet federal minimums for education and licensure of enrolled Medicaid providers. “If ultimately DVHA requires more of providers than OPR requires for state certification, this will have significant implications for the workforce available to DVHA,” he said, and offered to work with OPR to explore certification standards.

Committee members pressed DVHA on why similar concerns were not raised, or appeared differently, when the agency supported S.18 on freestanding birth centers. McCracken said some concerns were raised previously and that not all state plan amendment requests are the same: birth centers, he said, can often rely on already enrolled providers and present different enrollment and reimbursement issues than creating a new provider class for doulas. Committee members also sought details about implementation costs versus the fiscal-note estimates; McCracken said DVHA had not provided a separate line-item estimate for MMIS or administrative-rule costs and that those programmatic-resource needs were not included in the joint fiscal office’s reimbursement figures.

DVHA offered to provide written testimony and to follow up with its policy team and with OPR about possible certification standards. No formal committee action or vote occurred during this testimony.

The exchange concluded with DVHA saying it would share relevant documents and continue discussions with the committee and OPR about how a doula benefit could be structured to meet federal requirements and state administrative needs.