Trump administration pulls controversial Medicaid fiscal accountability rule

Dollar bill with a hole in Washington's face on it and the word "Medicaid" in its place
The Centers for Medicare & Medicaid Services has retracted a Medicaid rule that drew ire from providers. (zimmytws/GettyImages)

The Trump administration has pulled a rule that aimed to boost fiscal integrity in Medicaid, which drew ire from hospitals who painted it as a cut to Medicaid payments.

Centers for Medicare & Medicaid Services Administrator Seema Verma said in a statement posted on Twitter that the feds heard the concerns from providers, leading to a decision to retract the Medicaid Fiscal Accountability Rule, which it first published in November 2019.

“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," Verma said. "Therefore, CMS is withdrawing the rule from the regulatory agenda.”

The rule aimed to tamp down schemes that state Medicaid programs can use to boost their reimbursements.

RELATED: CMS rolls out guidance to help states convert Medicaid funding into block grant

A state may make supplemental payments over the the normal reimbursement rate under Medicaid, which would boost federal matching funds. The feds pay a matching rate of between 50% and 83% for services rendered in Medicaid, and the match increases depending on a state's contributions.

Supplemental Medicaid payments are used by programs in all 50 states and the District of Columbia.

Hospitals pushed CMS to retract the rule, arguing that it could cost billions in reimbursements to providers.

“Enacting this proposed rule would cut up to $50 billion nationally from the Medicaid program annually, further crippling Medicaid financing in many states,” according to a joint statement from leaders of the American Hospital Association and the American Health Care Association, which represents assisted living and nursing facilities.

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