November 21, 2019

Proposed CMS Rule Aims at Increasing Medicaid Fiscal Responsibility

The Centers for Medicare and Medicaid Services (CMS) issued a proposed rule Nov. 18, 2019, that aims at strengthening the fiscal integrity of the Medicaid program.

The Medicaid Fiscal Accountability Regulation proposed rule includes new proposals that intended to improve reporting on supplemental Medicaid payments, establish new definitions of “base” and “supplemental” payments and reduce questionable financing mechanisms. The proposed rule has an open comment period until Jan. 17, 2020.

CMS pointed to the rapid growth of Medicaid spending from $456 billion in 2013 to $576 billion in 2016 for the need to increase the program’s transparency and integrity. This proposed rule comes after both the Government Accountability Office and the Health and Human Services Office of the Inspector General released reports that recommended changes to Medicaid oversight to more accurately understand Medicaid supplemental and disproportionate share hospital (DSH) payments.

Within the proposed rule, CMS includes proposals that would require states to furnish provider-level information on payments received for state plan services and through demonstration programs, such as state plan amendments and Section 1115 demonstration waivers.

If adopted, the rule would allow CMS and states to evaluate the effects of supplemental payments by terminating existing and new supplement payment methodologies after no more than three years and would require states to seek approval for supplemental payments beyond the three-year maximum.

Regulatory definitions would be established for Medicaid “base” and “supplemental” payments, with “base” defined to mean a payment, other than a supplemental payment, made to a provider in accordance with the payment methodology authorized in the state plan or paid to the provider through its participation with a Medicaid MCO entity. “Supplemental” payments would be defined to mean a Medicaid payment to a provider that is in addition to the base payments to the provider, other than DSH payments, made under state plan authority or demonstration authority.

Your questions and comments about the proposed rule may be directed to American College of Radiology® Economics Policy Analyst Christina Berry.