CMS finalizes further limits on Medicaid managed care pass-through payments

The Centers for Medicare & Medicaid Services today issued a final rule further limiting states’ ability to increase or create new pass-through payments for hospitals, physicians or nursing homes under Medicaid managed care contracts. The rule prevents states from adding new or increasing current pass-through payment programs beyond what was included in their Medicaid managed care contracts on or before July 5, 2016. AHA had requested that the agency withdraw the rule. “We are disappointed that CMS chose to finalize a rule that further limits pass-through payments, and could adversely affect both those hospitals dependent on supplemental payments and the patients they serve,” said AHA Executive Vice President Tom Nickels. “Hospitals and state Medicaid programs should have been allowed the full 10-year transition period for phasing down supplemental payments as had been established in prior regulation.”