The Trump administration has hit pause on rules meant to strengthen oversight and reduce fraud in the Medicare and Medicaid programs. Providers said one rule was burdensome. The other rule sought to shed light on how states use supplemental payments aimed at enticing providers to see Medicaid patients.
One rule would have banned providers from Medicare and Medicaid if they fail to disclose that they are working with individuals who may be barred from billing the programs or who may owe money to the government.
The rule was mandated under the Affordable Care Act. It was submitted for review in November and withdrawn Thursday night, following President Donald Trump's executive order to freeze pending regulations at the Office of Management and Budget. Under law, rules can be withdrawn as long as they've not been posted in the Federal Register.
Had the rule gone forward as is it would give the CMS greater authority to deny or revoke a provider's or supplier's Medicare enrollment. It also would have increased Medicare program re-enrollment bans from three to 10 years. Complying with the various provisions of the rule was estimated to cost providers and suppliers more than $900 million over the first three years of its implementation once it was finalized, the CMS said.
Providers slammed the draft rule in comments.
It represented "an unprecedented shift in program integrity enforcement responsibility, essentially shifting the burden to providers and suppliers to police each other,” Chip Kahn, president and CEO of the Federation of American Hospitals, said in a comment.
Another rule currently frozen is a still-unpublished draft rule to establish new reporting requirements for states that pay bonus payments to Medicaid providers.
The rule came after repeated recommendations from the U.S. Government Accountability Office to increase its oversight over such payments that supplement what are often low reimbursement for Medicaid providers compared with other coverage programs. The rule was sent to the OMB for review in November and withdrawn Wednesday.
The GAO said because the payments aren't linked to specific services, states don't really disclose how the money is distributed to providers or what the money was used for. The CMS has raised similar concerns about pass-through payments, which are paid to Medicaid managed care plans as "add-ons” to the base capitation rate as a way of encouraging providers to see beneficiaries.
Under Medicaid, the CMS matches every dollar raised from provider taxes. States then take that pool of money, which is made up of the tax revenue and additional federal funding provided by the CMS, and give it back to providers to encourage them to see Medicaid beneficiaries.
For example, if a state collected $100 million in provider taxes, the CMS would offer a $50 million match. The state would then distribute the $150 million to providers as supplemental payments.
The GAO is concerned about the practice because states don't always report which providers get the bonus payments, and there isn't a standard process to decide if these payments were spent appropriately.
The federal watchdog has found instances where hospitals used these supplemental payments for non-care experiences such as buying a helicopter.
“Such financing arrangements can have the effect of shifting costs of Medicaid from states to the federal government,” the GAO said in a November 2015 report on the trend. “Our work has shown that state flexibility to seek contributions from local governments or impose taxes on healthcare providers to finance Medicaid may create incentives for states to overpay providers in order to reduce states' financial obligations.”
Trump's pick for HHS secretary, Rep. Tom Price (R-Ga.), wants to reduce Medicaid spending, so the supplemental pay rule could still some day be released.