Hospitals, state officials and many policy experts oppose a proposed federal rule that would create new Medicaid reporting requirements and likely reduce provider payments, Medicaid funding and beneficiaries’ access to care.
The Medicaid Fiscal Accountability Regulation would give states less freedom to determine how much they pay Medicaid providers or how they finance their Medicaid programs. The Trump administration proposed the rule because it’s worried that states collect excess federal Medicaid funds by gaming the state-federal Medicaid financing system. Comments on the proposed rule are due Feb. 1.
Most stakeholders are concerned that the administration’s effort to protect the program’s fiscal integrity will destabilize Medicaid and make it more difficult for doctors and hospitals to care for Medicaid enrollees.
“This proposal, if implemented, would weaken the nation’s healthcare safety net and put access to care at risk for the nation’s most vulnerable people,” said America’s Essential Hospitals in a written comment to the CMS.
Under the proposal, the federal government would ratchet up review and reporting requirements related to Medicaid’s Upper Payment Limit, which restricts how much states can pay fee-for-service Medicaid providers, and disproportionate-share hospital payments. It would also lower caps on supplemental payments to physicians and other health professionals.
“To the extent that these limits reduce Medicaid payments to providers, they may affect providers’ willingness to accept new or continue treating existing Medicaid patients,” said the Medicaid and CHIP Payment and Access Commission in comments on the rule.
The proposed rule would impose several restrictions on states’ ability to finance their Medicaid programs, including new limitations on provider taxes, intergovernmental transfers, certified public expenditures and provider donations. The changes would likely lower state Medicaid contributions and any corresponding federal match, which would decrease total Medicaid spending.
But the changes could have several unintended consequences because states often rely on these funding mechanisms to support other priorities like graduate medical education.
State Medicaid officials also worry that the Medicaid Fiscal Accountability Regulation gives the CMS too much discretion, which could create sizable uncertainty in the program.
“CMS would also create an environment of uncertainty for states via significantly increasing the federal agency’s discretion to approve or disapprove state financing arrangements, which may limit states’ ability to predict what CMS’ decisions will be on an ongoing basis,” said the National Association of Medicaid Directors in its comments on the rule.
Several industry experts think that the Trump administration should collect more information and engage stakeholders to study the potential effects of the proposed changes before it moves forward with them.
“Making changes without solid, usable information could have a detrimental impact on Medicaid beneficiaries,” said the left-leaning Center on Budget and Policy Priorities. “Changes in policy shouldn’t be made without a full understanding of their impact.”