CMS issues proposed rule on Medicaid supplemental payments

The Centers for Medicare & Medicaid Services May 20 released a proposed rule that would modify policies governing Medicaid state-directed payments as authorized under last year's reconciliation package and would establish new requirements for certain fee-for-service supplemental payments. CMS said the proposal is intended to align payment policies across managed care and FFS delivery systems and to increase consistency in how payments are structured and reviewed. The proposed rule would extend limits on total payment rates for all SDPs across service categories (i.e., beyond hospital, nursing facility, and academic medical center practitioner services) and certain targeted practitioner payments, generally tying payment levels to Medicare rates. Among other proposals, CMS would phase out certain categories of SDPs over time, including "uniform increase" arrangements. In addition, the rule includes several changes to SDP requirements intended to ensure compliance with federal payment limits and to strengthen oversight and transparency of directed payment arrangements. The agency is providing a 60-day comment period for the rule. The AHA will issue a Regulatory Advisory to members detailing the proposed rule.