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Medicaid adviser supports delaying proposed supplemental payment rule

A Medicaid adviser for Congress supports delaying a proposed federal rule that would increase the government's oversight of additional Medicaid payments to providers.

Members of the Medicaid and CHIP Payment and Access Commission, or MACPAC, said during a Dec. 12 meeting that the changes outlined in the proposed rule could harm access to care and limit needed federal funding for certain providers. The commission agreed to submit a public comment on the proposed rule outlining the concerns and asking the U.S. Centers for Medicare and Medicaid Services to delay implementation.

MACPAC advises Congress on policy and payment matters regarding Medicaid. The commission delivers recommendations to Congress in March and June reports but does not have legislative authority.

Medicaid is the dual state and federally run government health insurance program for people with low incomes, a wide population that includes children and the elderly.

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CMS's Nov. 12 proposal would increase its oversight of supplemental Medicaid payments, which are additional payments that are made to providers to make up for Medicaid rates that may not match actual costs, or for things like uncompensated care. The agency said the rule is meant to rein in unnecessary spending and limit improper payments.

Supplemental payments increased from 9.4% of all Medicaid payments in fiscal year 2010 to 17.5% in fiscal year 2017, according to CMS.

States would be required under the rule to report provider-specific payment data for multiple supplemental payment types. Currently, states report aggregate supplemental payment data.

Robert Nelb, a principal analyst for MACPAC, said the rule would also limit certain supplemental payments to three years, and states will be required to provide an evaluation of those payments to CMS in order to renew the payments. Other changes include limiting the payment amounts made to physicians and streamlining processes to recoup overpayments to disproportionate share hospitals, facilities that treat a high volume of uninsured patients, according to Nelb.

While MACPAC agreed with certain aspects of the rule, like collecting provider-specific data, multiple commission members were concerned that the overall changes would ultimately harm beneficiaries' access to care.

Commissioners agreed that CMS should collect the data but delay implementation. This would give CMS time to analyze the data and better understand the rule's impact, according to MACPAC commissioners.

Toby Douglas, commissioner and senior vice president of national Medicaid at Kaiser Permanente Inc., said little data exists to show how the changes will impact access, and examining those elements is "essential before we make such dramatic changes."

Peter Szilagyi, commissioner and pediatrics professor and vice chair for research in the department of pediatrics at the University of California, Los Angeles, said changes like the physician payment limit, which CMS estimates would cut payments by as much as $222 million a year, could disproportionately impact child health providers, children's hospitals or children's services in general hospitals.

"I do think that we should wait for the data and I suspect the data will show us that there will be major problems with access," Szilagyi said.

Molly Collins Offner, director of policy for the American Hospital Association, a national hospital representative, said during the public comment period of the meeting that the proposed rule could hurt hospitals that rely on supplemental payments.

"We believe this rule goes beyond increasing transparency," Offner said. "It potentially could jeopardize access to critical funding streams that have been put in place precisely because the Medicaid program has been chronically underfunded."

Another area of concern the commission intends to include in its comment is that the provider data collected by CMS should be made publicly available.

The rule's public comment period ends Jan. 17, 2020.