On November 18, 2019, the Centers for Medicare & Medicaid Services (CMS) published a proposed rule, called the Medicaid Fiscal Accountability Regulation (MFAR). This policy could dramatically cut funding for Medicaid programs across the country, hindering access to care and worsening health outcomes for millions of low-income Californians.
The Medicaid program (called Medi-Cal in California) is a state-federal partnership, supported by state and federal dollars to provide health care coverage. In California, public health care systems help finance a significant portion of the State’s share of Medi-Cal expenditures. If this proposal takes effect, public health care systems’ ability to contribute funds to Medi-Cal would be severely limited.
In addition to limitations on how public health care systems help pay for the Medi-Cal program, the proposed regulation would also restrict other sources of financial support. For example, the Managed Care Organization (MCO) tax (a tax on health plans) and the Hospital Quality Assurance Fee (HQAF) (a tax on hospitals) generate billions of dollars each year to help fund Medi-Cal. MFAR would impose new requirements on the use of these funds, which could reduce essential Medi-Cal services and programs across the state. At a time when California is diligently working to close the coverage gap, MFAR’s restrictions on how states pay for their Medicaid program could result in a significant increase in California’s uninsured rate and substantial reductions in covered benefits.
Across the nation, states and other public entities would face similar restrictions in paying for their Medicaid programs. States could be forced to impose new taxes or make huge cuts to their programs, limiting their ability to care for vulnerable patients in their communities. If MFAR is adopted as proposed, it will dismantle the health care safety net and jeopardize the health of millions of low-income Americans.
To learn more about MFAR, including the negative consequences for California, public health care systems, and state Medicaid programs across the country, check out our fact sheet. CMS has extended the deadline for public comment on this proposal until February 1, 2020.
- CMS’ Proposed Medicaid Fiscal Accountability Regulation: Implications for State Medicaid Programs and California’s Public Health Care Systems
- CAPH’s Comments to CMS on MFAR