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Medicaid Fiscal Accountability Regulation Update

Wednesday, February 12, 2020   (0 Comments)
Posted by: LeadingAge Indiana
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Medicaid Fiscal Accountability Regulation Update

Now that we are past the February 1 rule comment period all eyes are on the Centers for Medicaid & Medicare Services for them to publish their response to the over 4000 comments that were posted (Link to comments here).  An extraordinary amount for a proposed rule that should speak to the broad coverage and importance any changes to this program will have across the country.  Thank you to those of you that took the time to have your voice and the voices of your residents heard by the policy makers in the nations capital. 

National Governor’s Association Letter  (link to NGA letter here)spells out the issues with the proposed rule and makes the case for not moving forward with the current version and asks for CMS to take the time to collect data on the impact the rule would have before moving forward with any rule promulgation.  This is a different call than what Governor Holcomb’s administration has submitted.  The Family and Social Services Agency submitted their letter and requests a 5 year transition period which is not included in the current rule language but stops short of asking for a withdrawal of the rule. 

Congressional offices weigh in with Centers for Medicaid & Medicare Services to support LeadingAge positions that MFAR proposed rule should be changed.  Congresswoman Jackie Walorski recently sent CMS Administrator Verma a letter asking for the rule to provide a 5-year transition period while Congressman Bucshon also weighed in on the rule with a phone call with Administrator Verma and came away with the impression that the 5 year transition period is a possible landing position for CMS. 


Indiana’s Medicaid program also filed a comment letter, which is attached here.  FSSA has asked for a 5-year transition period for all provisions and specifically cite the work with stakeholders on reforming long term services and supports.  LeadingAge Indiana/IHCA/HOPE have been included in that process.

Next Steps

If we are to learn from history we can look back to 2007 CMS proposed a similar rule (CMS-2258-FC) that also would have restricted the source of IGTs to tax revenues and would have narrowed the definition of units of government eligible to make IGTs. In response, the House Committee on Oversight and Government Reform held a hearing to take testimony on the impact of the rule. CMS finalized that rule but later withdrew it after a federal court found that it violated a directive from Congress not to do so. This rule was in effect 70 days after the comment period which means given the current rule if it follows a similar path would go into effect in early to mid April 2020. 

We would expect at sometime before that to learn of what the intentions of CMS are in regards to the length of time allowed for a transition period if any.  What is clear by the over 4100 comments submitted is that CMS will have to address the overwhelming interest in the rule.  Interest that will most certainly lead to lawsuits being filed immediately following the adoption of the MFAR Rule.

More trouble ahead

President Trump has released his proposed budget for 2021 which contains significant cuts to Medicare & Medicaid.  (See full article here)  The federal government would like to slash Medicaid and Medicare by billions over the next decade, and establish a unified payment system for post-acute care providers, according to the fiscal year 2021 budget proposal unveiled by President Donald Trump.


The budget calls for about $920 billion in cuts to the Medicaid program over 10 years, The Hill reported. In addition, post-acute care and hospice services could also see severe reductions in Medicare funding, according to LeadingAge, which said it’s reviewing the proposed budget to understand how provisions affect the health services LeadingAge members provide.

“These proposals, which would reduce post-acute care and hospice services’ Medicare spending by more than $100 billion over the next 10 years, while being positioned as positive in helping to reduce ‘excessive spending and distortionary payment incentives’ alongside preventions of fraud and abuse, would in fact be crippling not only for providers of aging services but also to the older adults who depend on Medicare benefits to meet their care needs as they age and at the end of life,” the organization said.

“Moreover, proposals to fundamentally alter the vital safety net that the Medicaid program provides to many Americans can have an outsized impact on older adults who rely on Medicaid for their health care as well as to fund critical long-term services and supports,” it added.


Also introduced by CMS recently was the Healthy Adult Opportunity Demonstrations for Medicaid.  These demonstrations would permit states “extensive flexibility” to use Medicaid funds to cover Affordable Care Act (ACA) expansion adults and other nonelderly adults covered at state option who do not qualify on the basis of disability, without being bound by many federal standards related to Medicaid eligibility, benefits, delivery systems, and program oversight. In exchange, states would agree to a limit on federal financing in the form of a per capita or aggregate cap. States that opt for the aggregate cap and meet performance standards could access a portion of federal savings if actual spending is under the cap.

By combining the MFAR together with President Trump’s 2021 Budget cuts to Medicaid & Medicare and the Healthy Adult Opportunity demonstrations the future is clear that change is coming again in the form of restructuring payment for long term care services and supports right on the heels of final implementation of the Requirements of Participation rules and regulations.  LeadingAge Indiana working together with LeadingAge National is well-positioned to ensure you have a voice in how these new proposals will impact you and the residents you care for. 

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