As Providers Warn of ‘Broad Negative Impact,’ CMS Extends Comment Period on Medicaid Supplement Crackdown

The federal government extended the deadline for providers — both acute and post-acute — to comment on a proposed rule that would crack down on supplemental payment programs under Medicaid.

The new deadline is February 1, pushed back about two weeks from the original end date of January 17.

The Centers for Medicare & Medicaid Services (CMS) in November 2019 proposed a rule that would clarify crucial definitions for Medicaid supplemental payment programs, and set up new reporting requirements for the states that make use of such supplements.


In multiple states, the additional payments help bolster Medicaid rates for skilled nursing facilities through a variety of mechanisms.

Multiple providers, including the SNF and senior living trade associations LeadingAge and the American Health Care Association (AHCA), requested an extension.

Both LeadingAge and AHCA had requested that the deadline be moved March 17 to allow for more thorough comment and to allow state Legislatures to be consulted.


“We are concerned about the limited timeframe available to stakeholders to offer meaningful, data-driven comments given the magnitude of CMS’ proposals,” AHCA president and CEO Mark Parkinson wrote in his December 2 comment letter. “Given the complexity of these arrangements, both states and stakeholders will need time to fully assess the impact of the proposed changes and the degree to which these changes will impact both their Medicaid and overall state budgets.”

Because the federal rule would affect state-level budgets, Parkinson and Ruth Katz, senior vice president for policy at LeadingAge, argued that state legislatures should have a say in the process.

The oversight of the programs has been a long-standing issue for CMS and for other federal agencies — particularly because of how the programs have evolved over time, Andrea Maresca, senior vice president at the consulting firm Thorn Run Partners, noted in a presentation at AHCA’s annual convention and expo in Florida in 2019.

“All of this is driving work in the agency to come up with a regulation that will put more parameters about how supplemental payment programs would work in the future,” she said at the October conference. “The agency is also concerned about the lack of a clear link between how payments are made to providers, and whether these are made based on services delivered or somehow tied to quality and outcomes.”

The proposed rule would include definitions for multiple terms related to the supplemental Medicaid payments, such as base payment, non-state government provider, private provider, state government provider, and supplemental payment.

It would also limit approval for any Medicaid supplemental payments to a period of three years at most, and require states to monitor a supplemental payment program during the terms of its approval.

Multiple SNF providers have already sent in public comments warning officials about the proposed rule’s adverse effects, if it is implemented.

Louis Grimmel, of Lorien Health Services in Ellicott City, Md., argued in a comment letter dated December 23 that the supplemental payment funding mechanism lets SNFs increase staffing, wages, and quality, while also making capital improvements and investing in new technologies.

“Further, the proposed rule would also have a broad negative impact on Maryland’s Medicaid budget which, in turn, would adversely impact all of the state’s nursing providers and beneficiaries,” Grimmel wrote.

Operators in Texas, another state that has made use of different funding transfers to make up Medicaid shortfalls, could be affected as well. Under Texas’s Quality Incentive Payment Program (QIPP), providers can earn Medicaid payment increases by launching quality-improvement initiatives.

Josh Bates, vice president and owner of Transition Health Services, noted in multiple letters that his SNFs benefit from the program.

At Transition’s SNFs, QIPP has allowed for an attendee bonus plan for certified nurse aides and the addition of a “quality assurance nurse,” Bates wrote in letters on behalf of Briarcliff Health Center, Chandler Nursing Center, and Havencare Nursing & Rehab.

According to Bates — and another letter from Matt Fowers, administrator at Legend Oaks Healthcare and Rehabilitation — the rule would have a “significant impact on Texas’ largest pay-for-performance program.”

The both argued that CMS should consider a five-year transition period for all regulatory changes proposed in the rule, “given the tight timeframe CMS is proposing for states to come into compliance with the proposed changes.”

“As the only supplemental payment program currently available for the nursing home sector in Texas caring for over 60,000 Medicaid recipients daily, QIPP demonstrates the importance the state places on improving quality outcomes for the frail and elderly of Texas,” the authors wrote in their different letters. “Having shown its effectiveness through actual improvement in measured outcomes, efforts to expand the program should be considered.”

Companies featured in this article:

, , , ,