Trump Administration Backing Off Medicaid Rule That States Warned Would Lead To Cuts

September 15, 2020

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Source: The Hill, by Jessie Hellmann

The Trump administration will not move forward with a proposed Medicaid rule that states, hospitals, insurers, patient advocates and members of both political parties warned could lead to massive cuts to the federal health care program for the poor.

“The proposed Medicaid Fiscal Accountability Rule (MFAR) was designed to increase transparency in Medicaid financing and ensure that taxpayer resources support the health care needs of our beneficiaries,” Centers for Medicare & Medicaid Services Administrator Seema Verma said in a statement Monday.

“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,” she added.

Verma said the rule is being withdrawn from the agency’s regulatory agenda, but it’s not clear if it will be added to future agendas.

The rule was intended to overhaul the complex payment arrangements states use to raise money for their Medicaid programs — funding that is then matched by the federal government.

The administration argues some states use questionable methods of raising funds so they can leverage more money from Washington. One approach used by states consists of taxing providers that stand to benefit from more Medicaid funds flowing into the state.

But governors and state Medicaid directors argue those long-standing arrangements are both legal and necessary as states look for ways to keep up with escalating health care costs.

Dozens of states wrote public comments to Verma, urging her to withdraw the proposal, including conservative states that are typically supportive of her work.

If finalized, the rule “would have forced states to face larger Medicaid shortfalls and to make bigger cuts harming beneficiaries and providers,” tweeted Edwin Park, a research professor at Georgetown University.

 

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