On Monday, CMS Administrator Seema Verma announced via Twitter that the agency is withdrawing the proposed Medicaid Fiscal Accountability Regulation (MFAR) from its regulatory agenda. The rule would have dramatically restricted mechanisms used by states to fund their share of the Medicaid program. Verma said further study is needed to understand potential unintended consequences of the rule.
The withdrawal is a win for providers and state governments, many of which had expressed concerns about the negative impacts of the proposed policy on Medicaid funding and provider reimbursement. Lawmakers also had criticized the proposal: In July, Rep. Roger Williams, R-Texas, introduced the MFAR Transparency Act, which would prohibit CMS from finalizing or implementing the MFAR rule without congressional authorization.
America’s Essential Hospitals, an association of more than 300 US safety net hospitals, praised CMS’ decision to withdraw the rule. The Association for Community Affiliated Plans, a national organization of not-for-profit health insurers focused on Medicare, Medicaid and marketplace plans, also applauded the decision, saying the rule would have limited state flexibility and increased the burden of compliance on state agencies. For more about the proposed rule and the concerns expressed by providers and states about its impact on their budgets, please see HRI’s report here.