Fitch: Medicaid Block Grants, MFAR Threaten States, Providers

Medicaid block grants and the proposed Medicaid fiscal accountability regulation (MFAR) pose new financial threats to providers and states, according to Fitch Ratings, the financial rating company.

MFAR poses the greater threat, Fitch believes, noting in a new analysis that it could

…reduce total Medicaid spending nationally by $37 billion and $44 billion annually…and by $23 billion to $30 billion for hospitals alone.  States, and to some extent providers, would respond to MFAR’s implementation with measures to mitigate the negative fiscal implications.

Bookshelf with law booksBlock grants, through what has been named the Healthy Adult Opportunity program, also pose a threat, with Fitch explaining that

Capping federal Medicaid contributions, even for a subset of beneficiaries, poses risks to state budgets and those entities reliant on state funding, including local governments and providers.  States would need to find revenue or cost savings, either in Medicaid or elsewhere, to offset reduced federal contributions.

Because Pennsylvania safety-net hospitals care for more Medicaid patients than the typical hospital, both proposed policy changes have a potentially greater impact on them.

Last month SNAP conveyed its opposition to the proposed MFAR regulation in a formal comment letter to the Centers for Medicare & Medicaid Services in response to the regulation’s publication late last year.  Pennsylvania Governor Tom Wolf has already rejected the idea of using block grants in the state’s Medicaid program.

Learn more about the potential impact of the proposed Medicaid fiscal accountability regulation and Medicaid block grants in the Fitch Ratings analysis “Fitch Rtgs: Medicaid Changes Will Affect States, NFP Healthcare Providers.”

Filed under: Federal Medicaid issues, Pennsylvania Medicaid, Pennsylvania safety-net hospitals, Safety-Net Association of Pennsylvania

PA Seeks to Connect Medicaid Beneficiaries With Job

Pennsylvania has launched a new program that seeks to help Medicaid beneficiaries who would like to find jobs.

The program, called Medicaid Work Supports, is a joint project of the state’s Department of Human Services and Department of Labor & Industry.

As described in The Impact, DHS’s weekly newsletter:

The Medicaid Work Supports initiative will create a more direct and systematic introduction to employment and training resources available to Pennsylvanians. When people are deemed eligible and enroll in a new Medicaid health plan, they will be asked if they are interested in help finding a job, training programs, and opportunities to get a high school diploma or GED. The referral system will help identify this population for the first time and create the opportunity for a meaningful, encouraging partnership between the MCOs, the PA CareerLink® system, and the enrollee to facilitate connections to employment and success in the workforce.

Individuals interested in learning more about these services will receive outreach either through PA CareerLinks®, their selected health plan, or their local county assistance office to provide awareness of and referrals to resources and programs available in their local community.

Learn more about Medicaid Work Supports in the February 14, 2020 edition of The Impact, DHS’s weekly newsletter.

Filed under: Uncategorized

Verma Responds to MFAR Critics

CMS administrator Seema Verma addresses criticism of her agency’s proposed Medicaid fiscal accountability regulation in a new commentary on the CMS blog.

Critics of the so-called MFAR regulation have argued that the Centers for Medicare & Medicaid Services’ proposed regulation, if adopted, will lead to a reduction of federal funding for state Medicaid programs, jeopardize access to care and the financial health of providers by leading to a reduction of supplemental payments to high-volume Medicaid providers, and possibly even force some states to raise taxes to compensate for the loss of federal funding.

In her commentary Verma rebuts these criticisms, maintaining that the proposed regulation seeks to ensure that states pay their fair share of their Medicaid partnership with the federal government, raise that share in a manner consistent with federal guidelines, and spend it in ways that fall within regulatory standards.  She also maintains that the regulation will foster greater transparency and accountability for the Medicaid program.

Verma notes that more than 4000 stakeholders submitted written comments in response to the proposed regulation.  SNAP was among those commenters, writing that MFAR would give too much authority to federal regulators; create new administrative burdens for hospitals and state governments; and inappropriately limit state financing of their share of Medicaid spending.

Learn more from the Verma CMS blog commentary “Medicaid Fiscal Integrity: Protecting Taxpayers and Patients” and from SNAP’s letter in response to the proposed regulation.


Filed under: Federal Medicaid issues, Safety-Net Association of Pennsylvania

340B Déjà Vu: CMS Seeks to Collect Data From Hospitals

For the second time in four months, the federal government has announced its intention to collect data from hospitals and other providers on what they pay for the prescription drugs they purchase through the section 340B prescription drug discount program.

Last week the Centers for Medicare & Medicaid Services published a notice announcing its intention to collect this data.  Previously, health care interests sued CMS when it attempted in 2018 to reduce payments to providers for drugs purchased through the 340B program and the court ruled against CMS, maintaining that the agency did not have enough data on hospitals’ acquisition costs for the drugs to justify the proposed payment reduction.  The newly announced data collection effort seeks to rectify that shortcoming as the court considers CMS’s appeal of a similar decision in a lawsuit filed after CMS again proposed reducing 340B payments and was again rebuffed by the courts in 2019.

Under federal law, CMS must publish a notice declaring its intention to collect such data and seek input from stakeholders.  For this particular notice, stakeholders have until March 9 to respond.

CMS published a similar notice in September of 2019 announcing its intention to collect similar data.  That data collection never took place.

Most Pennsylvania safety-net hospitals participate in the 340B program and consider it a vital tool in serving the many low-income residents of the communities in which they are located.

To learn more about CMS’s 340B data collection effort, see the notice it published in the Federal Register and read the Becker’s Hospital Review article “CMS ready to survey 340B hospitals about drug acquisition costs.”

Filed under: 340b, Pennsylvania safety-net hospitals

Verma Responds to Medicaid Block Grant Critics

Last week the Trump administration unveiled its Healthy Adult Opportunity program, a new, optional, already-controversial approach to structuring state Medicaid programs.

Ever since, the program – essentially, Medicaid block grants – has been the subject of criticism from many public officials and health care stakeholders.

Now, Centers for Medicare & Medicaid Services administrator Seema Verma, who oversaw the development of Healthy Adult Opportunity, has responded to the program’s critics in an op-ed piece published in the Washington Post.  See her commentary “No, the Trump administration is not cutting Medicaid.

Filed under: Federal Medicaid issues

Health Care Groups Rebel Against Proposed Federal Regulation, Program

The administration’s proposed Medicaid fiscal accountability regulation and its guidance encouraging states to implement Medicaid block grants have incurred widespread opposition among a variety of health care groups.

The Medicaid fiscal accountability regulation would, if adopted, impose new restrictions on how states raise their share of their Medicaid spending, potentially limiting state participation in Medicaid or necessitating tax increases to fill the funding gap if long-accepted financing tools are no longer available to them.

Bookshelf with law booksThe Medicaid block grant guidance offers states a blueprint for curtailing their Medicaid costs by imposing limits on that spending that they negotiate with the federal government.

Numerous health care groups have expressed reservations or direct opposition to one or both of the proposals.  Among them:

  • AARP
  • America’s Essential Hospitals
  • America’s Health Insurance Plans
  • American College of Emergency Physicians
  • American Health Care Association
  • American Hospital Association
  • American Medical Association
  • Association for Community Affiliated Plans
  • Association of American Medical Colleges
  • Coalition of Long-Term Acute-Care Hospitals
  • LeadingAge
  • National Alliance of Safety-Net Hospitals
  • National Association of State Budget Officers
  • National Association of Medicaid Directors
  • National Continuing Care Residents Association
  • National Governors Association
  • Private Essential Access Community Hospitals

Safety-Net Association of Pennsylvania logoAmong the groups submitting formal comment letters to the Centers for Medicare & Medicaid Services in response to the proposed Medicaid fiscal accountability regulation was the Safety-Net Association of Pennsylvania.  See SNAP’s letter here.

Learn more about why these groups object to these two new policy developments in articles in Axios (“A little-noticed Medicaid proposal could have huge consequences”), Bloomberg Law (“Trump Plan to Tame State Medicaid Finance Schemes Sees Pushback”), Health Affairs (“Proposed Rules On Medicaid Financing Miss Mark And Threaten Access”), Healthcare Dive (“Payers, providers urge CMS to scrap rule targeting supplemental Medicaid payments”), Healthcare Finance News (“Providers, payers, others speak out against federal proposals for Medicaid funding”), McKnight’s Long-Term Care News (“Providers rally against proposed Medicaid supplemental payment rules that threaten ‘major financial burdens’”), McKnight’s Senior Living (“CMS proposal would be ‘major financial burden’ for CCRCs, residents, organizations say”),  and U.S. News & World Report (“Governors Warn Trump Rule Could Lead to Big Medicaid Cuts”)

Filed under: Federal Medicaid issues, Safety-Net Association of Pennsylvania

Wolf Administration Proposes New Human Services Initiatives for FY 2021

New human services efforts to support vulnerable populations are a major part of Governor Tom Wolf’s proposed $36.06 billion FY 2021 budget for Pennsylvania.

The proposed budget, presented to the state legislature earlier this week, includes the following new initiatives:

  • creating pathways to success in the workforce for low-income Pennsylvanians
  • increasing the minimum wage to $15
  • increasing Department of Human Services staffing to support licensing and oversight
  • supporting adults in long-term-care facilities
  • legal services for vulnerable populations
  • direct care worker comprehensive training
  • commitment to performance-based metrics, accountability, and transparency in services and licensing
  • supporting vulnerable populations through home- and community-based services and reducing waiting lists
  • prevention services to support at-risk families
  • improving food security while supporting agriculture

Go here to see DHS’s presentation of these initiatives.

In addition, the Safety-Net Association of Pennsylvania has prepared a detailed memo describing the proposed FY 2021 budget’s implications for Pennsylvania safety-net hospitals and the state’s Medicaid program.  For a copy of this memo, use the “contact us” link in the upper right-hand corner of this page.

Filed under: Pennsylvania Medicaid, Pennsylvania Medicaid laws and regulations, Pennsylvania Medicaid policy, Pennsylvania Medical Assistance, Pennsylvania proposed FY 2021 budget, Pennsylvania safety-net hospitals, Pennsylvania state budget issues, Safety-Net Association of Pennsylvania

Pennsylvania Health Law Project Newsletter

The Pennsylvania Health Law Project has published its January 2020 newsletter.

Included in this month’s edition are articles about:

  • the transition to a new Medicaid prescription drug list (PDL);
  • the rollout of a new electronic visit verification system for Medicaid-paid home health services; and
  • progress in the state’s effort to introduce major changes in its Medical Assistance transportation program (MATP).

Read about these subjects and more in the Pennsylvania Health Law Project’s January 2020 newsletter.

Filed under: Pennsylvania Medicaid, Pennsylvania Medicaid policy, Pennsylvania Medical Assistance

PA Says No to Medicaid Block Grants

Pennsylvania is not interested in pursuing the new Medicaid block grants being offered by the administration, leading state officials said last week.

In a news release, Governor Wolf said that

I expanded Medicaid in Pennsylvania to allow for more than 700,000 people to have reliable health care access. Pennsylvania will not go backwards. I will not risk jeopardizing our progress by going along with another short-sighted, insensitive plan to cut Medicaid…

Department of Human Services Secretary Teresa Miller, who oversees the Pennsylvania Medicaid program that serves approximately 2.8 million people, echoed this sentiment:

Changing any part of Medicaid to a block grant structure is the federal government permitting states to grow health inequities experienced by the poorest Americans. This cruel policy will directly target people who have the most opportunity to see their life and circumstances improved by consistent access to necessary health care and will keep people trapped in the cycle of poverty.

Learn more about why Pennsylvania will not pursue a Medicaid block grant in the Wolf administration news release “Pennsylvania Will Not Participate in Trump Administration Scheme to Cut Medicaid.

Filed under: Federal Medicaid issues, Pennsylvania Medicaid, Pennsylvania Medicaid policy

SNAP Asks Feds to Withdraw Medicaid Financing Regulation

CMS should withdraw its proposed Medicaid fiscal accountability regulation, SNAP has suggested in a formal comment letter to the federal agency in response to a new regulation it proposed in November.

Safety-Net Association of Pennsylvania logoAccording to the comment letter SNAP submitted to the Centers for Medicare & Medicaid Services,

SNAP is concerned that this proposed regulation would inappropriately restrict the state’s ability to finance the non-federal share of the Medicaid program, would impose significant additional regulatory burdens – the cost of which would far outstrip their benefit – would inappropriately introduce subjectivity into the application of previously clear and objective regulatory standards, and is beyond the scope of the statutory authority granted to CMS.

Learn more about SNAP’s views on the proposed Medicaid fiscal accountability regulation and why SNAP believes CMS should withdraw it in SNAP’s formal comment letter.

Filed under: Federal Medicaid issues, Safety-Net Association of Pennsylvania

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2012 Safety-Net Association of Pennsylvania