Category Archives: Financing

Latest HHS Financial Report Highlights Medicaid Eligibility Errors – and Foreshadows Future Actions

On November 19, 2019, CMS announced key results from the 2019 HHS Agency Financial Report, which generally provides fiscal and high-level performance data for HHS for the reporting period of October 1, 2018 through September 30, 2019. While CMS leads off its press release with the good news — payment error rates in the Medicare fee-for-service program are at their lowest level since FY 2010 —… More

CMS Withdraws Block Grant Guidance – What’s Next?

We’ve posted previously the long-standing rumor (substantiated by several folks within the Administration) that CMS is working on a guidance document to states to receive their Medicaid funding through a block grant. In June, the Office of Management and Budget (OMB) received a guidance document entitled, “State Medicaid Director Letter: Medicaid Value and Accountability Demonstration Opportunity.” This document was widely reported by press as the block grant guidance document.  … More

CMS Medicaid Fiscal Accountability Regulation Published

Earlier this week, CMS released for publication a proposed rule that would add some degree of transparency and oversight to the somewhat opaque world of Medicaid financing.  It’s a topic that’s fascinated us here at the Medicaid and the Law Blog for some time and we’ve written about it on a couple of occasions.  Over the years, Congress and CMS (and even before there was a CMS,… More

Why are Medicaid and CHIP enrollment numbers declining?

For much of the past two years, enrollment in the Medicaid and CHIP programs has been declining.  In May, 2017, enrollment in both programs was 74.6 million people.  As of May of this year, enrollment had declined by 2.5%, to 72.8 million.  This decline has applied across the board, in almost every state, for adults and for children.

Superficially, this might make sense;… More

Tennessee Announces First-in-Nation Block Grant Proposal

On September 17, 2019, Tennessee released its proposal to block grant most of the funding the state’s Medicaid program (TennCare) receives from the Federal government. If approved by CMS, the amendment to the state’s longstanding 1115 waiver program would make Tennessee the first state in the nation to move to a true “block grant” format for Medicaid funding. A draft of the proposed waiver is available on the state’s website —… More

Senate Finance Committee Proposes Significant Drug Pricing Reforms in Medicaid

On July 25, 2019 the Senate Finance Committee voted to advance their long-awaited drug pricing package to the Senate floor (we anticipate a Floor vote sometime this Fall). The Prescription Drug Pricing Reduction Act (PDPRA) of 2019, as the package is called, proposes numerous drug pricing reforms across Federal healthcare programs (including Part B and Part D), but for today’s blog post we will focus on some of the many Medicaid provisions included in the final mark-up.… More

Tom Barker Testifies Before Energy & Commerce on Medicaid DSH

On June 4, 2019, the House of Representatives’ Committee on Energy and Commerce, Subcommittee on Health, held a hearing entitled “Investing in America’s Health Care.”  Among other topics covered at the hearing was the future of the Medicaid disproportionate share hospital payment system, a topic that we have written about in the past.  Unless Congress acts, Medicaid DSH payments will be cut by $4 billion on October 1,… More

Robbing Peter to Pay Paul: Problems in Enforcing the Medicaid Secondary Payer Requirements

One of the things that gets drummed into your head working with Medicaid is this:  Medicaid is a payer of last resort.  Medicaid can only pay for a health care service when there is no other payer available.  If a Medicaid beneficiary has virtually any other source of health insurance coverage, that coverage pays first.

This requirement is set forth in the basic rules of the Medicaid program;… More

Senate Finance Committee Issues Report on Medicaid Supplemental Payments

The majority members of the Senate Finance Committee released a report last month that delves into the mysterious world of Medicaid supplemental payments.  We thought we’d go through it here, especially in light of some of the litigation going on across the country involving Medicaid disproportionate share (DSH) payments, a form of Medicaid supplemental payments.

The Finance Committee report found that total Medicaid supplemental payments in fiscal year 2016 totaled nearly $50 billion,… More

CMS Updates “Settings that Isolate” Guidance for HCBS Waivers, Providing Relief to Farmstead and Lifesharing Communities

On March 22, 2019, CMS published a long-awaited letter to State Medicaid Directors and a new guidance document regarding the Home and Community-Based Services (HCBS) waiver program.  The letter  revises previous guidance that CMS had provided to states on “Settings that have the effect of isolating individuals receiving HCBS from the broader community” for purposes of receiving Federal funding for services provided under a HCBS waiver. … More

MACPAC Takes on OIG’s Rebate Rule

If our readers have been paying attention to the news, one thing is apparent: drug pricing is trending.  As we’ve written on here before, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) has proposed significant revisions to the discount safe harbor regulations that protect existing rebate arrangements under Medicare Part D and Medicaid Managed Care. … More

As Block Grants Resurface, Does CMS have the Authority?

A recent news article suggests that Trump Administration officials are considering allowing states to receive their Medicaid funding through a block grant.  The article did not specify how CMS would accomplish such a goal without a statutory change.  Details are supposedly being developed, but until we see those details, it’s hard to know exactly what the agency is considering.

My colleagues and I at the Medicaid and the Law Blog thought it might be helpful to provide some background on the concept of block grants in Medicaid,… More

Fifth Circuit Decision Jeopardizes Medicaid Protections for Community Health Centers

The United States Supreme Court will have the opportunity to hear an important case out of Fifth Circuit Court of Appeals affecting how states pay community health centers for Medicaid beneficiaries enrolled in a managed care plan.  Community health centers represent the largest primary health care safety net for the nation’s poorest urban and rural communities.

The plaintiff in the case, Legacy Community Health Services,… More

CMS Proposes New Payment Rule That Will Negatively Affect Some Employee Labor Organizations

This is a brief post about a CMS proposed rule that sort of slipped under the radar last week.  But it has the potential to raise some eyebrows because it is clearly designed to make it harder for labor unions to collect dues from some home health care workers who are paid directly by Medicaid.

Section 1902(a)(32) of the Social Security Act prohibits reassignment of Medicaid funds, and only allows Medicaid funds to be paid directly to individuals performing health care services,… More

CMS Issues Long-Awaited Decisions on MassHealth Prescription Drug Request

It was a busy day for CMS today. After keeping everyone in suspense for months, CMS finally issued its decision on the Massachusetts state Medicaid program waiver request that proposed to limit access to covered outpatient drugs to Medicaid (in Massachusetts, called “MassHealth”) enrollees.  As many observers predicted, CMS did not approve the state’s request.  Notably, however, the CMS response letter provided a pathway for Massachusetts to achieve a substantially similar result. … More

Breaking Down Medicaid Financing

In the past several months, we have highlighted some fascinating Medicaid litigation against CMS in several US District Courts across the country.  This litigation deals with the Medicaid disproportionate share hospital (DSH) requirements of section 1923 of the Social Security Act.  But what we haven’t focused on – until now – is how the DSH program fits into the overall Medicaid financing system.  It’s a topic of enormous complexity with a rich 35-or more year history. … More