Bethel Manor Issues Public Comment on Centers for Medicare & Medicaid Services Proposed Rule
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Thank you for the opportunity to comment on the proposed Medicaid Fiscal Accountability Regulation (MFAR), Docket #CMS-2019-0169. I am writing today on behalf of
I am concerned about the proposed MFAR's potential implications for both the Medicaid program and for skilled nursing facilities such as
The proposed MFAR as written would disproportionately impact nursing facilities compared to other types of providers.
Medicaid is critical payer for nursing facility care in
Medicare does not pay for nursing home care beyond short-term/rehab stays, and the private long-term care insurance market is becoming smaller each year. According to the most recent data, Medicaid paid for more than 60% of nursing facility care nationally. In
Other types of providers subject to this rule rely less on Medicaid for financing services. For physician services, for example, just 11% of care is Medicaid-funded and almost 2 in 3 (66%) dollars for physician services come from private insurance or Medicare./1
As a result, the MFAR proposal will have a more direct impact on nursing home than other types of providers, and the significant changes proposed could be disruptive to nursing home provider stability and beneficiary access.
Given the critical role of Medicaid for nursing facility care financing, CMS should exempt nursing facilities from the proposed rule, or delay doing so until it can assess the impact of the proposal on providers of other types of services that rely less significantly on Medicaid.
The proposed MFAR as written, particularly proposed 42 CFR Sec. 433.68 (f)(3)(i), (iii) and (iv), are unworkable as detailed below and CMS should not proceed with finalizing these without significant revision.
Under current policy, states cannot have provider taxes in which a provider is held harmless for the cost of the tax. There are two current statistical tests that determine this. See 42 CFR Sec. 433.68 (f).
The proposed MFAR proposes to add language allowing CMS to consider the "net effect" of provider tax policies in considering whether they hold providers harmless.
This is overly vague. Rather than continue to use calculable statistical tests to determine hold harmless compliance, CMS is proposing to give itself discretion to pick and choose compliance.
While CMS includes a definition for "net effect," this definition is also overly broad and provides nothing for states or providers to use toward determining whether their current arrangements comply with the proposed text.
Further, the implementation timeline for this section is too immediate. States and providers will need time to transition to any final rule, and this section if finalized should be on the same implementation timeline (5 years) as other sections in this proposal.
As currently proposed, CMS would make substantial changes to how states calculate non-DSH supplemental payments but does not provide data supporting such changes.
Instead, it proposes to limit the types of data used (e.g., from within the last two years) and the methodologies states can employ to calculate the Upper Payment Limit. It also requires states to submit extensive data to CMS on quarterly and annual bases, which would be used to inform future decision making on supplemental payments and Upper Payment Limits.
We believe CMS is taking the incorrect approach to this section of the proposal. Instead of making changes to the supplemental payments and Upper Payment Limit rules and then using data, CMS should take a data-driven approach before making such major changes to these rules.
CMS should collect the data needed for this proposal, perform analyses and propose changes according to findings from those.
Thus, CMS should not move forward with the proposed changes to Upper Payment Limit calculations or to supplemental payments without first gathering the data needed to do so. The proposed sections should be delayed or withdrawn until CMS has data to justify them, rather than creating new policy and collecting data after the fact.
In Section V (Regulatory Impact Analysis), Part C (Anticipated Effects), Item 3 (Effects on the Medicaid Program), CMS says "The fiscal impact on the Medicaid program from the implementation of the policies in the proposed rule is unknown."
Given the broad scope of the proposal, and its potential implications for beneficiaries and for providers, this is not a sufficient response.
CMS should not finalize this rule, which has major implications for the Medicaid program, without conducting the necessary data analysis to do so. Whether with its current data assets or through data assets the agency could reasonably obtain, CMS is equipped to conduct such analysis and could do so before moving forward with this rule.
In the absence of such analysis, CMS should give considerable attention to public comment about the proposal's impact on Medicaid.
CMS should delay finalizing this rule until it has the data analysis necessary to support the rule.
If CMS is not able to conduct this analysis, it should withdraw the rule entirely and/or the sections for which there is no estimated Medicaid impact (e.g., proposed provider tax changes, proposed non-DSH supplemental payment changes).
In Section V (Regulatory Impact Analysis), Part C (Anticipated Effects), Item 2 (Effects on Small Businesses and Other Providers), CMS writes that "This rule establishes requirements that are solely the responsibility of state Medicaid agencies, which are not small entities. Therefore, the Secretary certifies this proposed rule would not, if promulgated, have a significant economic impact on a substantial number of small entities."
This is simply inaccurate. While state Medicaid agencies would be in large part responsible for carrying out the requirements of the proposed rule, they are not the only entity that would be affected by policy changes that would come from this rule's finalization.
Our organization is a small business that provides care to 63 residents, with approximately 47 of those residents being covered by Medicaid. This puts our annual revenue at an average of
CMS cannot reasonably assert that this proposal would not have "a significant economic impact" on small businesses, as its finalization would likely result in state policy changes that adversely affect small businesses and their customers, including CCRCs and the older residents who live there. CMS may not be directly making that change, but the agency would be the underlying cause of them via this proposal.
Thus, CMS should revise the small entities impact statement and propose a revised statement that considers small entities like nursing homes and CCRCs. CMS should also revise the proposed rule as necessary to protect small entities and reflect the revised proposed small business impact statement. Both the revised statement and the revised proposed rule should then be made available for further public comment.
CMS proposes a broad set of changes to Medicaid financing, including but not limited to the proposed changes to provider taxes and supplemental payments.
CMS currently proposes that these changes go into effect two or three years after the date any final rule is published.
Three years is not enough time for states to revise their policies to comply with the proposal, nor is it enough time for providers to recalibrate their financial strategy to prepare for implementation.
In addition, the data required from states in the proposal are complex and most states likely would need significant time and resources to create/augment data systems and to collect data. Three years is likely not enough time to do so.
CMS is soliciting feedback on whether other implementation timelines would be more appropriate, specifically mentioning one-year and five-year timelines.
CMS should delay the implementation date entirely for five years. If it does not do so entirely, it should delay the implementation of the proposed provider tax changes for five years.
CMS specifically should not use a one-year timeline for any aspect of this proposal.
In closing, I would greatly encourage CMS to take into consideration that there has been little data collection or study on the use and allocation of these Medicaid funds and there has also been practically no study or data collection performed regarding the significant negative impact that this rule will cause at both the provider and patient levels. CMS should first do its due diligence in collecting and studying data so that they can make informed decisions when it comes to implementing such significant regulations and also understand and study the impact that the proposed changes would have on facilities, employees, residents, and others in our local communities.
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Footnote:
1/ CMS 2018 National Health Expenditure Data, https://www.cms.gov/Research-Statistics-Data-andSystems/Statistics-Trends-and-Reports/NationalHealthExpendData/index
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The proposed rule can be viewed at: https://www.regulations.gov/document?D=CMS-2019-0169-0001
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