Proposed Medicaid rule change criticized by hospitals, state officials

The Wisconsin Hospital Association is asking the federal agency overseeing Medicaid to withdraw a proposed rule change, warning it could “adversely affect” the state’s Medicaid budget. 

“The proposed rule would introduce uncertainty as to how CMS would evaluate state funding arrangements for the Medicaid program,” WHA President and CEO Eric Borgerding said in a statement referring to the Medicaid Fiscal Accountability Regulation. “At the very least it would entail new reporting requirements and new administrative burden for arrangements that have already been reviewed and approved.” 

State Medicaid Director Jim Jones says he’s also worried about increased reporting requirements in the proposed rule from the Centers for Medicare and Medicaid Services. 

“Any time they request more information and more reporting, that means I need more staff and IT resources to comply with those requirements,” he told “More reporting means more administrative work for the state.” 

In a recent interview, Jones explained the proposed rule would place “a great many” new reporting requirements on states related to Medicaid program funding. Plus, he said the highly technical rule would restrict funding sources for these programs. 

He expects other states will see much larger changes from the proposed rule than Wisconsin. That’s because Wisconsin relies less on separate funding sources for Medicaid programs aside from state and federal sources, he said. 

But Jones won’t weigh in on potential fiscal impacts in Wisconsin until the finalized version of the rule is released by CMS. And he says that could take a while. 

“We don’t know when the final rule will come out,” he said, adding the federal government’s process for finalizing rules like these can take years in some cases. In others, the process is done in just a few months. 

In the meantime, he said state agencies around the country are “just waiting for them to finalize their process.” 

The National Association of Medicaid Directors has raised concerns about the proposed rule, arguing it would place “uniform rules and requirements on states without sufficient consideration” of the differences between states’ Medicaid programs. 

“This one-size-fits-all approach will inevitably create challenges for the majority of states,” leaders of NAMD wrote in a letter to CMS Administrator Seema Verma. 

Jones said the issues raised in the letter “align with our concerns.” If the group’s many suggested changes to the rule were implemented, he said the negative impact in Wisconsin would be lessened. 

Still, he said state officials continue to assess “what the final impacts would be on Wisconsin.” 

He said “a few small programs” in the state would be affected but would not provide specific details before the final version of the proposed rule is released. 

National provider groups including the American Hospital Association say the new rule could lead to reduced Medicaid payments to hospitals. In response, Jones said “I’m sure in some states that would be true.” 

“Until the final rule comes out, it’s really hard to tell. The devil is really in the details in the Medicaid program,” he said. “Until you have definitive words, it’s hard to tell what the impact would be.” 

According to Jones, language in the proposed rule gives CMS “lots of discretion” over program funding and oversight. He adds that kind of uncertainty poses challenges for state health officials.

“Certainty is our friend in the Medicaid program,” he said. 

See the proposed rule: 

See the letter from NAMD: 

–By Alex Moe