Governors and CMS tell Medicaid Commission how to cut costs

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The National Governors Association and the Centers for Medicare & Medicaid Services have provided the Medicaid Commission with cost-cutting recommendations, including closing provider tax loopholes and tightening restrictions on asset transfers.

The commission charged with coming up with ways to cut $10 billion from the federal Medicaid budget was set to vote Thursday on final recommendations to be presented to Congress on Sept. 1. Among the 33 proposals provided by NGA and CMS Wednesday was one suggesting a reform of Medicaid provider tax and the Medicaid Managed Care Organization (MCO) provider tax requirements, which would save the federal government an estimated  $5.7 billion over five years, according to the Congressional Budget Office.

The proposals ask for a phase down from 6% to 3% percent the allowable tax rate that states could charge providers and would require that MCOs be treated the same as other providers.

Among other things the commission is expected to consider is a proposal that would change the start date of the penalty period for asset transfers from the date of transfer to the date an individual applies for Medicaid. This change would save an estimated $1.5 billion, according to CMS.

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