CMS issues final rules on Medicaid managed care pass-through payments

The American Hospital Association says the Centers for Medicare & Medicaid Services (CMS) on Tuesday released a final rule limiting states’ ability to increase or create new pass-through payments for hospitals, physicians or nursing homes under Medicaid managed care contracts.

The rule clarifies that for state pass-through payment programs to qualify for the 10-year transition period, they had to be in place as of July 5, 2016. (CMS had previously provided for a 10-year phase-out of the pass-through payments from 2017 to 2027.)

The AHA says the rule could adversely affect hospitals dependent on supplemental payments and the patients they serve. The association says that hospitals and state Medicaid programs should have been allowed the full 10-year transition period for phasing down supplemental payments as had been established in prior regulation.