• Analysis or Summary
  • January 31, 2020

Medicaid Fiscal Accountability Regulation Summary

On Nov. 12, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule entitled "Medicaid Fiscal Accountability Regulation" (MFAR), which focuses on transparency and reporting of Medicaid payments and methods of state Medicaid financing. The proposed rule would require detailed provider-level reporting of Medicaid base and supplemental payments and sunset existing and new supplemental payment methodologies after three years. The proposed rule also includes requirements on how states generate their non-federal Medicaid funding, including provisions affecting the use of provider taxes, donations, Intergovernmental Transfers and Certified Public Expenditures.

The summary provides a high-level overview of key provisions and specific details on each of the provisions most likely to be of interest to children's hospitals. This rule could have significant implications for state Medicaid supplemental payments—which are critical to children's hospitals—and for state Medicaid programs in general, as the provisions appear to change policies currently in place related to states' program financing.

We strongly encourage hospitals to share the proposed rule with relevant internal staff to assess the potential impact on your institutions and to work with your state policymakers to assess the impact on state programs. We have also shared this summary with finance-related CHA affinity groups, which may include others from your hospital.

On Jan. 31, CHA submitted comments to CMS on MFAR. Thank you to children’s hospitals for providing feedback. If you have not already, we strongly encourage children's hospitals to adapt this letter for your own hospital's use and add in any impact information specific to your state/hospital and submit to CMS by Feb. 1 at 5:00 p.m. ET and share with your Congressional delegations. It is critical CMS and Congress hear from as many stakeholders as possible on this issue. Among other groups that have weighed in with concerns, the National Governors Association submitted their own letter to CMS stating, “Governors request that CMS not move forward with the current proposed rule, as written, and instead, gather more data to understand the impact, identify more targeted evidence-based policies to address concerns and work with states to determine best practices for how to strengthen accountability and transparency in the Medicaid program. Medicaid plays a significant role for millions of people across the country and its complex structure warrants careful and thoughtful steps for any reform.”