CMS had touted MFAR as an effort to improve Medicaid accountability and transparency and to reduce spiraling program costs.
The Centers for Medicare & Medicaid Services is delivering on an earlier pledge to withdraw its proposed Medicaid Fiscal Accountability Regulation after stakeholders roundly panned the proposal.
In a notice to be published on January 19 in the Federal Registry, CMS said it has received more than 10,000 comments since MFAR was proposed in late November 2019, with the vast majority of stakeholders raising concerns about the proposed rule's effect on state and provider budgets, and the potential to disrupt access to care for Medicaid beneficiaries.
"Many commenters stated their belief that the proposed rule did not include adequate analysis of these matters," CMS said. "Numerous commenters indicated that CMS, in some instances, lacked statutory authority for its proposals and was creating regulatory provisions that were ambiguous or unclear and subject to excessive Agency discretion."
"While we continue to support the intent and purpose of the rule to increase fiscal accountability and improve transparency in the Medicaid program, based on the considerable feedback we received through the public comment process, we have determined it appropriate to withdraw the proposed provisions at this time," CMS said.
CMS had touted MFAR as an effort to improve Medicaid accountability and transparency and to reduce spiraling program costs when it posted the proposal in November 2019.
Acknowledging concerns raised by stakeholders, CMS Administrator Seema Verma in September said her agency would withdraw the proposal.
In an analysis of the proposal in early 2020, the American Hospital Association said MFAR "goes far beyond increasing transparency."
"These proposed changes would have devastating consequences for the Medicaid program," AHA said. "Nationally, the Medicaid program could face total funding reductions between $37 and $49 billion annually, or 5.8% to 7.6% of total program spending."
"Hospitals specifically could experience reductions in Medicaid payments of $23 billion to $31 billion annually, representing 12.8% to 16.9% of total hospital program payments."
Although MFAR would affect individual states differently, the AHA analysis showed that nearly all states would see cuts in Medicaid enrollment and benefits.
The news that CMS was withdrawing MFAR was cheered by hospital groups. Beth Feldpush, senior vice president of policy and advocacy at America's Essential Hospitals, called CMS's action "the right decision."
"MFAR would have badly undermined the support essential hospitals depend on to provide access to affordable, high-quality healthcare," Feldpush said.
"We cannot afford unintended consequences that harm the safety net—especially now, as essential hospitals and other front-line providers battle the COVID-19 pandemic and the economic downturn drives rising Medicaid enrollment."
“Numerous commenters indicated that CMS, in some instances, lacked statutory authority for its proposals and was creating regulatory provisions that were ambiguous or unclear and subject to excessive Agency discretion.”
CMS
John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.
KEY TAKEAWAYS
CMS said it has received more than 10,000 comments since MFAR was proposed in late November 2019.
The vast majority of stakeholders raised concerns about the proposed rule's effect on state and provider budgets, and the potential to disrupt access to care for Medicaid beneficiaries.
Acknowledging concerns raised by stakeholders, CMS Administrator Seema Verma in September said her agency would withdraw the proposal.
An AHA analysis said MFAR could result in total Medicaid reductions of nearly $50 billion annually, and that hospitals would see up to $30 billion in payment cuts.
Although MFAR would affect individual states different, the AHA analysis showed that nearly all states would see cuts in Medicaid enrollment and benefits.