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Long-term care and hospital providers are calling on the Centers for Medicare & Medicaid Services to withdraw a proposal that could cut “up to $50 billion” nationwide from the Medicaid program annually. 

Leaders of the American Health Care and American Hospital associations voiced their concerns about CMS’ proposed Medicaid Fiscal Accountability Regulation Thursday in a joint statement

Mark Parkinson
AHCA’s Mark Parkinson

“We appreciate CMS’ responsibility to oversee appropriate Medicaid financing and service delivery. However, the bleak reality is that Medicaid funding is already inadequate,” AHCA President and CEO Mark Parkinson and AHA President and CEO Rick Pollack wrote.

“Enacting this proposed rule would cut up to $50 billion nationally from the Medicaid program annually, further crippling Medicaid financing in many states and jeopardizing access to care for the 75 million Americans who rely on the program as their primary source of health coverage,” they added. 

CMS announced the proposed rule in November in an effort to add transparency to Medicaid payment processes and eliminate suspect practices. 

The rule would set new requirements for states to report provider-level information on Medicaid supplemental payments. It would also revise Upper Payment Limit (UPL) demonstrations and supplemental payments, and set new requirements for how UPLs can be calculated and which data sources to use.

Providers have previously warned that the proposed regulation would limit the amount of time a state could have supplemental payment policies without federal review. It would also sunset supplemental payments every three years, and CMS approval would be required to continue payments beyond that time if finalized. 

“Entire communities could lose access to care under this proposal, especially in rural areas where 15 percent of hospital revenue and nearly two-thirds of nursing facility revenue nationwide depend on Medicaid funding,” they wrote. “The supplemental payment programs targeted in this rule are also a critical lifeline at hospitals, health systems and nursing facilities that serve some of the most vulnerable Americans.” 

The organizations have called on the agency to “withdraw the proposed rule in its entirety.” 

“CMS has provided little to no analysis to justify these policy changes, nor has the agency assessed the impact on providers and the patients they serve. Many of the proposed changes would also violate federal laws, including the current Medicaid statute,” they added.