Blog

CMS Withdraws Medicaid Financing Regulation

Tags: Health
  • Blog

    CMS Withdraws Medicaid Financing Regulation

    On September 14, 2020, the Centers for Medicare and Medicaid’s Administrator Seema Verma announced via twitter that the agency was withdrawing the proposed Medicaid Fiscal Accountability Rule (MFAR) from the regulatory agenda.

    The rule, which was first proposed in November 2019 and was set to be finalized this fall, would have made substantial changes to Medicaid’s financing structure and supplemental payments. The Medicaid program operates as joint federal-state-local partnership, with counties across the nation delivering Medicaid-eligible services and, in many instances, helping states finance and administer the program. If enacted, the rule would have capped two flexible funding mechanisms used by state and local governments to finance their non-federal shares of Medicaid payments: intergovernmental transfers (IGTs) and certified public expenditures (CPEs). An IGT is a transfer of funds from a government entity (such as a county) to the state Medicaid agency that, when used to meet the non-federal share of a Medicaid payment, is eligible to receive federal matching funds. Meanwhile, CPEs are used by government entities (including health care providers) to receive federal matching funds for health care services approved under a state’s Medicaid state plan. In FY 2018, supplemental funding sources such as IGTs and CPEs, as well as other local funding sources, made up 37.5 percent of all Medicaid spending.

    The proposed regulation would have also created new reporting requirements for Medicaid Disproportionate Share Hospital (DSH) payments, and placed limitations on supplemental payments to certain health care providers, while also implementing an extensive review process for the addition or renewal of supplemental funding sources under Medicaid.

    The withdrawal comes as a win for counties, following months of advocacy to have a moratorium placed on the rule. In February, NACo submitted comments on the proposed rule, which emphasized he potentially burdensome impacts of these proposed provisions on counties. The creation of new reporting requirements, for instance, would require additional time and resources without providing additional federal funding to meet this obligation. Furthermore, the proposed changes to Medicaid’s financing structure could challenge counties’ ability to provide essential health services to vulnerable populations and plan our budgets strategically.

    Counties support the current rules, which allow for maximum flexibility for states and counties in meeting the non-federal share of Medicaid payments, and NACo applauds CMS’s consideration of MFAR's impact on the Medicaid program during this critical time.

    Resources:

    • NACo comments on MFAR proposed rule (NACo comments)
    • NACo submits comments on proposal to alter Medicaid financing (NACo Blog)
    • Medicaid and Counties: Understanding the Program and Why It Matters to Counties (NACo presentation)

    On September 14, 2020, the Centers for Medicare and Medicaid’s Administrator Seema Verma announced via twitter that the agency was withdrawing the proposed Medicaid Fiscal Accountability Rule (MFAR) from the regulatory agenda.
    2020-09-15
    Blog
    2020-09-16
CMS announced via Twitter that it would be withdrawing MFAR rule after hearing concerns, a win for counties NACo has advocated for the withdrawal of rule during COVID-19 relief efforts due to the negative impact it would have on the Medicaid program The withdrawal is a win for counties, following months of advocacy to have a moratorium placed on the rule

On September 14, 2020, the Centers for Medicare and Medicaid’s Administrator Seema Verma announced via twitter that the agency was withdrawing the proposed Medicaid Fiscal Accountability Rule (MFAR) from the regulatory agenda.

The rule, which was first proposed in November 2019 and was set to be finalized this fall, would have made substantial changes to Medicaid’s financing structure and supplemental payments. The Medicaid program operates as joint federal-state-local partnership, with counties across the nation delivering Medicaid-eligible services and, in many instances, helping states finance and administer the program. If enacted, the rule would have capped two flexible funding mechanisms used by state and local governments to finance their non-federal shares of Medicaid payments: intergovernmental transfers (IGTs) and certified public expenditures (CPEs). An IGT is a transfer of funds from a government entity (such as a county) to the state Medicaid agency that, when used to meet the non-federal share of a Medicaid payment, is eligible to receive federal matching funds. Meanwhile, CPEs are used by government entities (including health care providers) to receive federal matching funds for health care services approved under a state’s Medicaid state plan. In FY 2018, supplemental funding sources such as IGTs and CPEs, as well as other local funding sources, made up 37.5 percent of all Medicaid spending.

The proposed regulation would have also created new reporting requirements for Medicaid Disproportionate Share Hospital (DSH) payments, and placed limitations on supplemental payments to certain health care providers, while also implementing an extensive review process for the addition or renewal of supplemental funding sources under Medicaid.

The withdrawal comes as a win for counties, following months of advocacy to have a moratorium placed on the rule. In February, NACo submitted comments on the proposed rule, which emphasized he potentially burdensome impacts of these proposed provisions on counties. The creation of new reporting requirements, for instance, would require additional time and resources without providing additional federal funding to meet this obligation. Furthermore, the proposed changes to Medicaid’s financing structure could challenge counties’ ability to provide essential health services to vulnerable populations and plan our budgets strategically.

Counties support the current rules, which allow for maximum flexibility for states and counties in meeting the non-federal share of Medicaid payments, and NACo applauds CMS’s consideration of MFAR's impact on the Medicaid program during this critical time.

Resources:

  • Basic page

    The Stepping Up Initiative

    In May 2015, NACo and partners at the CSG Justice Center and APA Foundation launched Stepping Up: A National Initiative to Reduce the Number of People with Mental Illnesses in Jails.
    page

    <table border="1" cellpadding="1" cellspacing="1" style="width:100%" summary="call-out">
    <tbody>
    <tr>
    <td>

  • Reports & Toolkits

    COVID-19 Recovery Clearinghouse

    The COVID-19 Recovery Clearinghouse features timely resources for counties, including allocation estimations, examples of county programs using federal coronavirus relief funds, the latest news and more.
    03
    12
    7:15 pm
    Reports & Toolkits

    <table border="1" cellpadding="1" cellspacing="1" style="width:100%" summary="ad-block no-top-margin no-bullets">
    <caption>Jump to Section</caption>

  • Basic page

    Live Healthy U.S. Counties

    The National Association of Counties (NACo) Live Healthy Prescription, Health & Dental Discount Program is a NO-COST program available to all member counties.
    page

    <h1>With <a id="naco" name="naco">NACo</a>, Saving Feels Better</h1>

  • Reports & Toolkits

    Opioid Solutions Center

    NACo’s Opioid Solutions Center empowers local leaders to invest resources in effective treatment, recovery, prevention and harm reduction practices that save lives and address the underlying causes of substance use disorder.
    10
    12
    3:30 pm
    Reports & Toolkits

    <p>NACo&#39;s Opioid Solutions Center empowers local leaders to invest resources in effective treatment, recovery, prevention and harm reduction practices that save lives and address the underlying causes of substance use disorder.

Related Posts

Related Resources

More From

  • Opioid Solutions Center

    NACo’s Opioid Solutions Center empowers local leaders to invest resources in effective treatment, recovery, prevention and harm reduction practices that save lives and address the underlying causes of substance use disorder.

    Learn More