Responding to Trump Administration’s Troubling Medicaid Financing and Supplemental Payment Rule

On November 18, 2019, the Trump Administration issued a proposed Medicaid “Fiscal Accountability” rule that seriously threatens to upend state budgets and reduce beneficiaries’ access to needed care.  The proposed rule, if finalized, could thus harm Medicaid beneficiaries, including children and families, as well as their health care providers, in most states.

As Cindy Mann and Anne O’Hagen Karl explain in a recent Health Affairs blog post, the rule could adversely affect how states currently finance their share of the cost of their Medicaid programs through taxes on health care providers, contributions from local governments and spending incurred by public providers.  If states can no longer rely on that funding to the same extent and are unable to generate other funding (e.g. higher taxes), states could be forced to reduce their total Medicaid spending and make damaging cuts to their Medicaid programs in the areas of eligibility, benefits and provider payments.

The proposed rule could also negatively affect how states now provide Medicaid “supplemental payments” to hospitals, nursing homes and other health care providers.  If states scale back these payments because of the rule and are unable to raise provider reimbursements in other ways, that could significantly weaken the ability of safety-net and other providers to continue to serve low-income Medicaid beneficiaries.

Public comments on the proposed rule are due February 1, 2020 and can be submitted here.  We are at CCF are currently developing our comments and will post them as soon as they are submitted.  We also expect to post some more detailed analysis of the proposed rule in coming days.