On November 18, 2019, the Trump Administration released a proposed rule called the Medicaid Fiscal Accountability Regulation (MFAR). The Centers for Medicare and Medicaid Services (CMS) says that the rule would promote transparency by establishing new reporting requirements related to supplemental payments to Medicaid providers and upper payment limits (UPL) on what providers can be paid by Medicaid programs. In addition to new reporting requirements, the rule makes changes to the rules and review of supplemental payments and UPL arrangements as well as changes to financing the non-federal share of Medicaid with new requirements and reviews of state financing mechanisms. The rule was issued as part of the administration's program integrity strategy. The changes proposed are extremely technical and complex but are likely to have significant implications for provider payment rates and state financing of Medicaid by disrupting current arrangements and restricting the future use of such arrangements. This brief provides some context on Medicaid financing, an overview of current state payment and financing rules, the provisions in the rule and potential implications for considerations.
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