The Centers for Medicare & Medicaid Services (CMS) has released its long-anticipated final Medicaid managed care rule, codifying a policy that allows hospitals to receive reimbursement equivalent to commercial rates in Medicaid managed care to promote access to care. In a surprise change from the proposed rule, CMS eliminated the option of using “separate payment terms” for directed payments beginning no earlier than the first rating period beginning 3 years after July 9, 2024. This change would mean that funding for directed payments would need to be incorporated into managed care plans’ per member per month capitation payments and would require eventual restructuring of many existing directed payment programs. Fixed total payments would thus also be prohibited, with potential implications for directed payments funding by fixed provider taxes. The final rule also reiterates CMS’ recent position that private, voluntary mitigation or pooling arrangements in connection with provider taxes constitute a prohibited hold harmless, finalizing a new attestation for provider-tax funded directed payment programs, effective after January 1, 2028. We are continuing our review of the technical policies in the final rule and will be reaching out to individual clients who may be affected with a more nuanced assessment of impact.
CMS also has issued its final Ensuring Medicaid Access rule, largely finalizing proposed policies that would seek to improve access to access to care, quality and health outcomes, and health equity.
Finally, CMS has issued a second Informational Bulletin on provider assessment programs involving private, voluntary mitigation or pooling arrangements, agreeing not to enforce its policy prohibiting such arrangements until January 1, 2028 for states with existing mitigation arrangements. New arrangements will not be permitted. In the meantime, CMS will continue to collect information on possible hold harmless arrangements as it reviews proposals for provider-tax funded payment programs and will provide technical assistance to states to transition non-federal share financing structures.
Eyman Partners will be closely reviewing the rules and guidance to identify other issues of note for our clients. Check our website in the coming days for additional information.