The Centers for Medicare and Medicaid Services’ (CMS) Administrator Seema Verma withdrew the proposed Medicaid Fiscal Accountability Rule (MFAR) this week from its regulatory agenda. Administrator Verma announced over Twitter on Monday: “We’ve listened closely to concerns that have been raised by our state and provider partners about potential unintended consequences of the proposed rule, which require further study.” Although increased transparency and reporting in the Medicaid program are laudable goals AzHHA supports, we applaud Administrator Verma for eliminating this serious threat to the administration of Medicaid throughout the country during the current national health emergency. 

The American Hospital Association, the National Governor’s Association, the National Association of Medicaid Directors, the U.S. Chamber of Commerce, AzHHA, and countless other state and national stakeholders voiced grave concerns that MFAR would have given CMS unfettered discretion to invalidate legitimate Medicaid financing arrangements around the country. MFAR would have caused Medicaid payment reductions to hospitals specifically to the tune of $23 to $31 billion annually, representing up to 17% of total hospital program payments. In Arizona specifically, MFAR would have posed a very serious threat to the underpinnings of our healthcare safety net.

This collaboration to defeat the rule was truly a team effort, reaching across aisles and across industries. AzHHA would like to thank Governor Ducey and the Arizona Congressional Delegation for their strong partnership and support on this critical issue.