Va. hospitals predict $31B reduction in state's Medicaid funding if proposed CMS rule passes
A bed in
A proposed federal rule stemming from the reconciliation bill
Public comment closed this week on a rule proposed by the
"As written, it goes well beyond the statutory language of H.R. 1 by imposing deeper funding cuts and more restrictive policy provisions than what
What the proposed rule would do
Adjustments to Medicaid and how providers are reimbursed for it are set to take effect in 2027, 2028 and 2029. These changes were approved in H.R. 1, first dubbed the One Big Beautiful Bill Act and later rebranded as the Working Families and Tax Cuts Act.
The law prescribes caps to what are called state-directed payments but the proposed CMS rule includes additional policy changes to align Medicaid payment rates more closely with Medicare rates.
The proposed rule would also limit supplemental payment arrangements outside of typical Medicaid managed care organizations.
The suggestions in the rule stem from a
Trump wrote that growth in state-directed payments "threatens the Federal Treasury and Medicaid's long-term stability."
CMS administrator Dr.
The sentiment echoes Trump's statements that social service programs like Medicaid are rampant with "waste, fraud and abuse."
The administration has also withheld Medicaid funding from
Virginia's
Of nearly 7,000 fraud investigations last year, 11% were substantiated, according to a
To cut money that supports catching and correcting abuse, Park said, is "counterintuitive."
Healthcare professionals, members of the public say rule risks cuts to essential services
By targeting state directed payments, hospital associations suggest the federal government may negatively affect the people programs like Medicaid are designed to protect.
Walker called state directed payments a "well-established tool" that helps hospitals bridge the gap between "often inadequate Medicaid reimbursement rates and the actual cost of delivering care."
Walker said if the rule takes effect, Virginia could see more than
ER visits by uninsured patients in
"Essential hospital services including emergency care, behavioral health treatment, and labor and delivery, among others, would be more difficult to maintain under the level of cuts contemplated in the proposed rule," he said.
Hospitals and clinics have already been trimming services over the past year, some partially due to longstanding rural healthcare challenges, while several others statewide specified H.R. 1 as a contributing factor.
CMS rule proposals undergo public comment periods, and this one has fielded about 5,500 comments from around the country. Several hundred have been posted in a public online portal that closed Tuesday.
Some people asked logistics questions about how the rule would apply, while many expressed opposition to the proposal.
Most commenters did not identify themselves on the public portal but
"The cost of early treatment is less than emergency treatment later," she wrote. "Medicaid is the smarter choice."
Another commenter urged CMS to not adopt the change "unless you acknowledge your intent is to make Americans unhealthy or cause massive preventable deaths."
Virginia leaders address federal healthcare shifts, proposed rule
Virginia Gov.
While Virginia officials monitor the pending CMS rule, they are already at work implementing H.R. 1 compliance and addressing the impact of other federal healthcare funding shifts.
State lawmakers earmarked
Social service departments have also inherited former Gov.
The state was also awarded a
Even with these investments, Health and Human Resources Secretary
"I hope that CMS will work with us to avoid unnecessary complexities within this already complicated process and preserve the flexibility needed to protect Virginians' access to healthcare," Figueroa said.
For states or other entities that might seek to delay or block the CMS rule, Park said litigation could be a path or members of
Figueroa and Gov.
"We are trying to take every action possible, a laundry list of actions," Spanberger said in an interview last week.
With public comment closed, Park said the CMS rule is not official just yet.
"Even on a sort of fast track, it's still several months usually before a rule gets finalized," he said.
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