University of Texas Medical Branch at Galveston Issues Public Comment on Centers for Medicare & Medicaid Services Proposed Rule

WASHINGTON, March 1 -- Brad Willbanks, associate vice president and deputy chief compliance officer at the University of Texas Medical Branch at Galveston, has issued a public comment on the Centers for Medicare and Medicaid Services' proposed rule entitled "Medicaid Program: Medicaid Fiscal Accountability Regulation". The comment was written on Jan. 31, 2020, and posted on Feb. 27, 2020:

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On behalf of The University of Texas Medical Branch at Galveston (UTMB) we appreciate the opportunity to comment on the Centers for Medicare & Medicaid Services (CMS) proposed Medicaid Fiscal Accountability Regulation. We respectfully request that the proposed regulation be withdrawn entirely due to its adverse impact on the Texas' Medicaid Program.

As way of background, UTMB is a major academic medical center that operates four hospitals in the Texas Gulf Coast and greater Houston area. Those hospitals range from a level one trauma center in Galveston to a rural community level hospital in Angleton. UTMB also provides an extensive amount of primary care in our 88 outpatient clinics. UTMB has had a long history, in its over 125 years of existence, of providing care to the underserved. In fiscal year 2019, Medicaid represented 25% of UTMB's payor mix and we provided $202.5 million in uncompensated care.

About 4 million Texans rely on Medicaid to receive health care. Another 5 million Texans do not have health insurance, which results in billions of dollars in uncompensated care each year. Hospitals have a unique legal obligation to treat every patient suffering from an emergency condition or in active labor, regardless of how much (if anything) the hospital will receive for providing care.

While we understand CMS's interest in enhancing its stewardship of the Medicaid program through greater transparency of Medicaid financing and supplemental payments, the proposed regulations go far beyond increasing transparency. Specifically, they would restrict state access to important funding streams, limit the use of supplemental payments, and introduce significant uncertainty with respect to how the agency will evaluate state approaches. The proposals are numerous, varied, and would give states virtually no time to make policy and budgetary adjustments to offset the loss of federal funds, assuming they could be mitigated at all.

We therefore urge the Centers for Medicare and Medicaid Services (CMS) to withdraw this harmful rule which puts at risk health care for Texans enrolled in Medicaid and for Texans without insurance. The rule institutes new federally determined limits on state financing of Medicaid and would provide CMS with vague and undefined authority for approving such payments. The result will place the viability of Texas' health care safety-net at risk by jeopardizing $11 billion in annual payments for hospitals and other providers who rely on supplemental payments to augment Medicaid base payments and help offset some of our uncompensated care costs.

MEDICAID SUPPLEMENTAL NON-DISPROPORTIONATE SHARE HOSPITAL (DSH) PAYMENTS

Texas Medicaid is a large, complex and critical program. In Texas, Medicaid supplemental payments are crucial, as Medicaid base payments on average cover only 69% of hospital costs (and according to the most recently published state public data, just over 50% of hospital costs for large urban public hospitals). In addition to Medicaid, Texas Hospitals provide billions of dollars in uncompensated care to uninsured Texans the costs of which these supplemental payments also help defray.

In Texas, the Medicaid program is financed by state general revenue (-17%), intergovernmental transfers (-26%) and federal matching funds (-57%). Texas has worked over the years with CMS to implement methods of finance that are uniquely tailored to the needs of our state. UTMB believes this partnership has worked well and should not be disrupted by new restrictions and subjective decision making proposed by CMS in this rule.

CMS proposes significant changes to the policies for non-DSH supplemental payments, citing concerns about the growth in these payments. Specifically, the agency proposes to change how upper payment limits payments (UPL) are calculated, increase reporting requirements, and limit such payments to physicians and other practitioners. These changes could severely curtail access to care, especially at public academic teaching hospitals and rural hospitals serving vulnerable communities whose providers would disproportionately be subject to the new practitioner caps. Meanwhile, the new provider-level reporting requirements would be considerable and would generate largely unusable data given inadequate guidance from the agency on some of the proposed reporting requirements, as well as the fact that the data would not be audited. Because the agency has not ensured that the federal statutory equal-access standard can be met with these policy changes, the proposal is arbitrary and capricious.

EFFECTIVE DATES, TRANSITION PERIODS

The proposed rule has virtually no transition timeline for states to make changes to their financing and supplemental payment programs. The only transition period CMS contemplates is for renewal of the provider tax waivers and non-DSH supplemental payments, but even here, there is insufficient time for states to manage a renewal process in the allotted time. In addition, CMS proposes to limit approval for supplemental payment programs to a three-year period, which will leave states with insufficient time to secure approval from state agencies and legislatures. These financing and payment programs are complex and states, such as Texas, need considerable time to work with state legislatures and affected stakeholders to implement any possible mitigation strategies.

CONCLUSION

Given the proposed rule undermines the Texas Medicaid program and thus adversely impacts those who rely on the program and would require considerable time for mitigation (if even possible), we request that it be withdrawn in its entirety.

We appreciate your consideration of these comments. We look forward to working with the agency to explore reasonable transparency measures to ensure accountability in Medicaid state financing and payment policies.

Sincerely,

Brad Willbanks

AVP and Deputy Chief Compliance Officer

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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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