As urged by the AHA, the Centers for Medicare & Medicaid Services late this afternoon announced that it will withdraw its Medicaid fiscal accountability proposed rule from its regulatory agenda.

“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,” CMS Administrator Seema Verma tweeted. “Therefore, CMS is withdrawing the rule from the regulatory agenda.”

CMS still must formally withdraw the rule through a notice published in the Federal Register.

The AHA and other health groups earlier this year urged CMS to withdraw a proposed rule related to Medicaid program financing and supplemental payments because it would "severely curtail the availability of health care services to millions of individuals" and "many of its provisions are not legally permissible."

If the proposed rule were to be implemented, the Medicaid program, nationally, could face total funding reductions between $37 billion and $49 billion annually or 5.8% to 7.6% of total program spending, AHA said in its January comments, citing analysis from Manatt Health. In addition, hospitals specifically could see reductions in Medicaid payments of $23 billion to $31 billion annually, representing 12.8% to 16.9% of total hospital program payments.

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