The AHA yesterday asked the Centers for Medicare & Medicaid Services to withdraw a proposed rule that would further limit states’ ability to increase or create new pass-through payments for hospitals, physicians or nursing homes under Medicaid managed care contracts. In a May 6 final rule, CMS provided for a 10-year phase-out of pass through payments, beginning in 2017 and ending in 2027. However, in July the agency issued further guidance that states could not add new or increase current pass-through payment programs beyond what was included in their Medicaid managed care contracts on or before July 5, 2016. The proposed rule would codify this policy. “CMS has characterized that this rule is a clarification of its policy,” AHA Executive Vice President Tom Nickels wrote. “This proposed rule, however, changes, ‘the rules of the game’ mid-stream, leaving state Medicaid programs and hospitals no time to adjust, and the result could adversely affect hospitals dependent on these supplemental payments. Therefore, the AHA requests that CMS withdraw the proposed rule and allow states and hospitals the full 10-year transition period spelled out in the May 6, 2016 final rule, which begins in July 2017.”

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