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MFAR is Dead

At least for now.

The controversial Medicaid Fiscal Accountability Regulation, slated for implementation this fall over the objections of many health care stakeholders, will not move forward at this time.

In a tweet earlier this week, Centers for Medicare & Medicaid Services Administrator Seema Verma wrote that

We’ve listened closely to concerns that have been raised by our state and provider partners about potential unintended consequences of the proposed rule, which require further study.  Therefore, CMS is withdrawing the rule from the regulatory agenda.

If implemented, opponents maintained, the regulation would have:

  • Deprived states of important, established policy-making prerogatives.
  • Created major new administrative burdens for state governments and hospitals.
  • Inappropriately regulated financing of the state share of Medicaid spending.
  • Introduced new, unspecified standards for state Medicaid programs.

While CMS maintained that MFAR would have enhanced the transparency of state Medicaid programs, the rule’s opponents maintained that it could lead to a major reduction of resources for serving the Medicaid population.

NASH was among those opponents, arguing that the regulation could have hurt private safety-net hospitals and others that serve low-income communities by inappropriately regulating how states can finance their Medicaid programs.  CMS proposed the rule last November and  submitted formal comments expressing its opposition in January and endorsed legislation to prohibit the rule’s implementation in July.

It is worth noting that in “withdrawing the rule from the regulatory agenda,” Verma did not preclude the possibility of reintroducing MFAR at some point in the future.

Learn more from article “Trump administration backing off Medicaid rule that states warned would lead to cuts” in the online publication The Hill.

 

NASH Endorses Bill to Delay MFAR

Implementation of the Medicaid fiscal accountability regulation, opposed by NASH and many others since its introduction in November of 2019, would be delayed under a new bill proposed in the House of Representatives.

The MFAR Transparency Act (HR 7606), sponsored by representatives Roger Williams (R-TX) and Eddie Bernice Johnson (D-TX), would delay implementation of the MFAR rule until the Government Accountability Office had an opportunity to assess its impact on individual states and identify the Medicaid transparency issues that need to be addressed.

Most important, the bill would prevent implementation of MFAR without specific authorization from Congress.

In a letter to the bill’s sponsors endorsing their proposal, NASH wrote that “The MFAR rule could jeopardize access to care for millions of Americans.”

NASH first expressed its opposition to the MFAR rule in a January letter to the Centers for Medicare & Medicaid Services.  Read its endorsement of the Williams-Johnson bill here.

NASH Asks Senate for COVID-19 Help

Private safety-net hospitals need help with the challenges posed by the COVID-19 public health emergency, NASH wrote yesterday in a letter to Senate majority leader Mitch McConnell and minority leader Charles Schumer.

In its letter, NASH asked for:

  • An additional $100 billion for hospitals.
  • Forgiveness for money provided to hospitals through the federal CARES Act’s Accelerated and Advance Payment Program.
  • Action to prevent implementation of the Medicaid fiscal accountability regulation.
  • An increase in the federal Medicaid matching rate (FMAP).
  • An increase in states’ Medicaid disproportionate share (Medicaid DSH) allotments.
  • A moratorium on changes in hospital eligibility for the 340B prescription drug discount program, Medicare indirect medical education program, Medicare disproportionate share (Medicare DSH) program, and other programs.

See NASH’s letter here.

 

NASH Pitches Policy Proposals to Congress

Following the introduction of the Health and Economic Recovery Omnibus Emergency Solutions Act (“HEROES Act”), the National Alliance of Safety-Net Hospitals wrote to congressional leaders to ask for six specific policy initiatives in the next COVID-19 legislation:

See NASH’s letter on behalf of private safety-net hospitals here.

 

MFAR Backlash Continues

Diverse health care and government interests are rallying around their opposition to the proposed Medicaid fiscal accountability rule.

The regulation, proposed by the Centers for Medicare & Medicaid Services in November would impose new limits on the ability of states to finance their share of their Medicaid spending, potentially jeopardizing provider payments and the ability of high-volume Medicaid providers to operate without suffering great losses.

In all, CMS received more than 4200 written comments in response to the proposed regulation, most of them expressing opposition.  Among those doing so were state governments, the National Governors Association, hospitals and hospital associations, nursing home operators, and health advocacy organizations.  Also among them was the National Alliance of Safety-Net Hospitals.  In summarizing its opposition, NASH wrote in a formal comment letter to CMS on behalf of private safety-net hospitals that

While NASH supports greater transparency in Medicaid, that support is outweighed by too many troubling aspects of the proposed regulation. In this letter, NASH is especially interested in commenting on five aspects of the proposed regulation: how it would deprive states of important, established policy-making prerogatives; its creation of major new administrative burdens for state governments and for hospitals; its inappropriate regulation of financing of the state share of Medicaid spending; its proposed introduction of new, unspecified standards that state Medicaid programs would be held accountable for meeting; and its violation of the Administrative Procedures Act.

See NASH’s entire letter here.

Learn more about the Medicaid fiscal accountability rule, what it seeks to do, and why so many oppose in the Stateline article “Medical Groups Slam Trump Medicaid Rule.”

Fitch: Medicaid Block Grants, MFAR Threaten States, Providers

Medicaid block grants and the proposed Medicaid fiscal accountability regulation (MFAR) pose new financial threats to providers and states, according to Fitch Ratings, the financial rating company.

MFAR poses the greater threat, Fitch believes, noting in a new analysis that it could

…reduce total Medicaid spending nationally by $37 billion and $44 billion annually…and by $23 billion to $30 billion for hospitals alone.  States, and to some extent providers, would respond to MFAR’s implementation with measures to mitigate the negative fiscal implications.

Block grants, through what has been named the Healthy Adult Opportunity program, also pose a threat, with Fitch explaining that

Capping federal Medicaid contributions, even for a subset of beneficiaries, poses risks to state budgets and those entities reliant on state funding, including local governments and providers.  States would need to find revenue or cost savings, either in Medicaid or elsewhere, to offset reduced federal contributions.

Because private safety-net hospitals care for more Medicaid patients than the typical hospital, both proposed policy changes have a potentially greater impact on them.

Last month NASH conveyed its opposition to the proposed MFAR regulation in a formal comment letter to the Centers for Medicare & Medicaid Services in response to the regulation’s publication late last year.  While NASH has not commented publicly about the Healthy Adult Opportunity program, it has long been concerned about a block grant approach to Medicaid funding, writing in its 2019 advocacy agenda that

Block grants, whether based on individual states’ Medicaid enrollment or on their past Medicaid spending, could impose unreasonable limits on Medicaid spending that could potentially leave private safety-net hospitals unreimbursed for care they provide to legitimately eligible individuals. NASH will work to ensure that any new approach that involves Medicaid block grant continues to give states the ability to pay safety-net hospitals adequately for the essential services they provide to the low-income residents of the communities in which those hospitals are located.

Learn more about the potential impact of the proposed Medicaid fiscal accountability regulation and Medicaid block grants in the Fitch Ratings analysis “Fitch Rtgs: Medicaid Changes Will Affect States, NFP Healthcare Providers.”

Verma Responds to MFAR Critics

CMS administrator Seema Verma addresses criticism of her agency’s proposed Medicaid fiscal accountability regulation in a new commentary on the CMS blog.

Critics of the so-called MFAR regulation have argued that the Centers for Medicare & Medicaid Services’ proposed regulation, if adopted, will lead to a reduction of federal funding for state Medicaid programs, jeopardize access to care and the financial health of providers by leading to a reduction of supplemental payments to high-volume Medicaid providers, and possibly even force some states to raise taxes to compensate for the loss of federal funding.

In her commentary Verma rebuts these criticisms, maintaining that the proposed regulation seeks to ensure that states pay their fair share of their Medicaid partnership with the federal government, raise that share in a manner consistent with federal guidelines, and spend it in ways that fall within regulatory standards.  She also maintains that the regulation will foster greater transparency and accountability for the Medicaid program.

Verma notes that more than 4000 stakeholders submitted written comments in response to the proposed regulation.  NASH was among those commenters, writing that MFAR would give too much authority to federal regulators; create new administrative burdens for hospitals and state governments; and inappropriately limit state financing of their share of Medicaid spending.

Learn more from the Verma CMS blog commentary “Medicaid Fiscal Integrity: Protecting Taxpayers and Patients” and from NASH’s letter in response to the proposed regulation.

 

Health Care Groups Rebel Against Proposed Federal Regulation, Program

The administration’s proposed Medicaid fiscal accountability regulation and its guidance encouraging states to implement Medicaid block grants have incurred widespread opposition among a variety of health care groups.

The Medicaid fiscal accountability regulation would, if adopted, impose new restrictions on how states raise their share of their Medicaid spending, potentially limiting state participation in Medicaid or necessitating tax increases to fill the funding gap if long-accepted financing tools are no longer available to them.

The Medicaid block grant guidance offers states a blueprint for curtailing their Medicaid costs by imposing limits on that spending that they negotiate with the federal government.

Numerous health care groups have expressed reservations or direct opposition to one or both of the proposals.  Among them:

  • AARP
  • America’s Essential Hospitals
  • America’s Health Insurance Plans
  • American College of Emergency Physicians
  • American Health Care Association
  • American Hospital Association
  • American Medical Association
  • Association for Community Affiliated Plans
  • Association of American Medical Colleges
  • Coalition of Long-Term Acute-Care Hospitals
  • LeadingAge
  • National Association of State Budget Officers
  • National Association of Medicaid Directors
  • National Continuing Care Residents Association
  • National Governors Association
  • Private Essential Access Community Hospitals
  • Safety-Net Association of Pennsylvania

NASH is among the many that submitted formal comment letters in response to the proposed Medicaid fiscal accountability regulation; see NASH’s letter here.

Learn more about why these groups object to these two new policy developments in articles in Axios (“A little-noticed Medicaid proposal could have huge consequences”), Bloomberg Law (“Trump Plan to Tame State Medicaid Finance Schemes Sees Pushback”), Health Affairs (“Proposed Rules On Medicaid Financing Miss Mark And Threaten Access”), Healthcare Dive (“Payers, providers urge CMS to scrap rule targeting supplemental Medicaid payments”), Healthcare Finance News (“Providers, payers, others speak out against federal proposals for Medicaid funding”), McKnight’s Long-Term Care News (“Providers rally against proposed Medicaid supplemental payment rules that threaten ‘major financial burdens’”), McKnight’s Senior Living (“CMS proposal would be ‘major financial burden’ for CCRCs, residents, organizations say”),  and U.S. News & World Report (“Governors Warn Trump Rule Could Lead to Big Medicaid Cuts”)

Health Care Groups Rebel Against Proposed Federal Regulation, Program

The administration’s proposed Medicaid fiscal accountability regulation and its guidance encouraging states to implement Medicaid block grants has incurred widespread opposition among a variety of health care groups.

The Medicaid fiscal accountability regulation would, if adopted, impose new restrictions on how states raise their share of their Medicaid spending, potentially limiting state participation in Medicaid or necessitating tax increases to fill the funding gap if long-accepted financing tools are no longer available to them.

The Medicaid block grant guidance offers states a blueprint for curtailing their Medicaid costs by imposing limits on that spending that they negotiate with the federal government.

Numerous health care groups have expressed reservations or direct opposition to one or both of the proposals.  Among them:

  • AARP
  • America’s Essential Hospitals
  • America’s Health Insurance Plans
  • American College of Emergency Physicians
  • American Health Care Association
  • American Hospital Association
  • American Medical Association
  • Association for Community Affiliated Plans
  • Association of American Medical Colleges
  • Coalition of Long-Term Acute-Care Hospitals
  • LeadingAge
  • National Alliance of Safety-Net Hospitals
  • National Association of State Budget Officers
  • National Association of Medicaid Directors
  • National Continuing Care Residents Association
  • National Governors Association
  • Private Essential Access Community Hospitals

Among the groups submitting formal comment letters to the Centers for Medicare & Medicaid Services in response to the proposed Medicaid fiscal accountability regulation was the National Alliance of Safety-Net Hospitals.  See NASH’s letter here.

Learn more about why these groups object to these two new policy developments in articles in Axios (“A little-noticed Medicaid proposal could have huge consequences”), Bloomberg Law (“Trump Plan to Tame State Medicaid Finance Schemes Sees Pushback”), Health Affairs (“Proposed Rules On Medicaid Financing Miss Mark And Threaten Access”), Healthcare Dive (“Payers, providers urge CMS to scrap rule targeting supplemental Medicaid payments”), Healthcare Finance News (“Providers, payers, others speak out against federal proposals for Medicaid funding”), McKnight’s Long-Term Care News (“Providers rally against proposed Medicaid supplemental payment rules that threaten ‘major financial burdens’”), McKnight’s Senior Living (“CMS proposal would be ‘major financial burden’ for CCRCs, residents, organizations say”),  and U.S. News & World Report (“Governors Warn Trump Rule Could Lead to Big Medicaid Cuts