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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.

 

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.”

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.