In November, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that would introduce new restrictions and requirements related to certain Medicaid financing mechanisms, such as healthcare-related taxes, supplemental payments, and intergovernmental transfers. Complex in nature, these federally permitted financing arrangements are critical to how state Medicaid programs fund care provided to low-income patients. Last Friday, MHA submitted detailed comments expressing significant concerns with CMS’s new restrictions and requested that the proposed regulation be withdrawn.
The proposed changes put billions of dollars in Medicaid spending nationally at risk, affecting healthcare providers directly and state Medicaid programs. Manatt Health, in conjunction with the American Hospital Association (AHA), conducted an analysis based on public and private data sources to determine the financial effect of the proposed rule. Nationally, they estimated the total funding reductions could be between $37 and $49 billion on an annual basis. Given the size and nature of the proposed changes – which introduce a significant level of uncertainty, administrative burden, and loss of federal funding – no state is spared, including Massachusetts.
In a letter to CMS Administrator Seema Verma
, MHA President and CEO Steve Walsh said, “MHA strives to be constructive in all aspects of policy making, here in Massachusetts and at the federal level. While we understand the intent of CMS is to improve transparency and ensure program integrity, this proposed rule is too drastic in nature and unworkable…Because of the overwhelming negative effect on access for low-income citizens, the ability of healthcare providers to serve their patients, innovation within the Medicaid program, and the overall economy, we believe it is imperative that the proposed rule be withdrawn.”
MHA joins numerous organizations across the country, including AHA, in its criticism of of the proposal. In Massachusetts, state leaders have expressed strong objections to the CMS proposal and requested that it be withdrawn. Governor Charlie Baker joined Oregon Governor Kate Brown on behalf of the National Governors Association in filing this letter
laying out concerns. , Assistant Secretary for MassHealth and Medicaid Director Dan Tsai in this letter
detailed the rule's numerous negative effects on the state’s MassHealth program and its “unprecedented federal overreach.” MHA member hospitals, other healthcare providers, and consumer advocates also requested that the proposed rule be withdrawn.