Aid Bill Would Pause MFAR Medicaid Crackdown During COVID-19, Boost Federal Match by 14%

House Democrats on Tuesday introduced a major aid package with a provision that would indefinitely delay the implementation of a controversial rule that imperiled billions in Medicaid funding for skilled nursing facilities.

The bill also would boost the Federal Medical Assistance Percentage (FMAP), or Washington’s share of state Medicaid rates, by 14% — up from the 6.2% boost implemented in the Families First Coronavirus Act.

The 1,815-page “HEROES Act” was introduced by House Democrats on Tuesday; Politico reporter Rachel Roubein first pointed out the provision preventing the Secretary of the Department of Health and Human Services (HHS) from finalizing or implementing the Medicaid Fiscal Accountability Regulation (MFAR).


MFAR, which was introduced last November 11, was designed to crack down on novel Medicaid programs that SNF providers in multiple states have used to supplement Medicaid reimbursement rates that don’t cover the full cost of nursing home care.

The Centers for Medicare & Medicaid Services (CMS) wanted to clarify definitions for the programs, and establish new reporting requirements for the states that use such programs — especially after some states tried to implement variants of them that involved shuffling of ownership to bolster the rates, at least in the agency’s view.


If implemented, the bill could cost providers a total of $50 billion per year, according to an estimate from the American Health Care Association (AHCA) and American Hospital Association (AHA).

CMS administrator Seema Verma responded by calling those claims “alarmist.”

“This proposed rule is not intended to reduce Medicaid payments, and alarmist estimates that this rule, if finalized, will suddenly remove billions of dollars from the program and threaten beneficiary access are overblown and without credibility,” Verma wrote in mid-February. “If states have arrangements that need to evolve, we will work with them to achieve a successful transition.”

Under the HEROES Act, the HHS secretary cannot take any action to finalize or implement MFAR during the federal government’s COVID-19 emergency; it also cannot implement any rule similar to those provisions related to the Medicaid program or the state Children’s Health Insurance Program during the same time period.

Eddie Parades, senior vice president of government affairs at StoneGate Senior Living and one of the architects of the supplemental payment program in Texas, was strongly in favor of the MFAR pause, though he said the nursing home field does have concerns that the rule might make a comeback in 2021.

“It would be a travesty to in effect reduce Medicaid payments and federal assistance right now during a pandemic,” he told Skilled Nursing News on May 12. “So we are very hopeful that survives in the final form.”

House Democrats are planning to move forward with a Friday vote on the HEROES Act, Politico reported Tuesday.

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