NEWS RELEASE Committee on Energy and Commerce Rep. John D. Dingell, Chairman For Immediate Release: April 9, 2008 Contact: Jodi Seth or Brin Frazier, 202-225-5735   Subcommittee Moves to Block Medicaid Cuts Approved Legislation would place a one-year moratorium on seven Administration-imposed Medicaid regulations Washington, D.C. – The Committee on Energy and Commerce’s Subcommittee on Health today completed a markup on legislation to place a temporary, one-year moratorium on seven Administration-imposed Medicaid regulations that would make significant cuts to the program over the next five years. Committee Chairman John D. Dingell (D-MI) offered an amendment in the nature of a substitute to H.R. 5613, the “Protecting the Medicaid Safety Net Act of 2008,” which was forwarded to the full Committee by voice vote. “This legislation will help protect the health of millions of Medicaid beneficiaries, and I am proud to move it forward” said Dingell. “Though the Administration issued new Medicaid regulations without conducting a thorough and proper assessment of their effects, it’s clear that these rules would harm the most vulnerable among us. I am heartened by the strong bipartisan support this bill received today, and I look forward to bringing it to the full committee for consideration as soon as possible.” During the past year, the U.S. Department of Health and Human Services (HHS) has issued a number of regulations that would reverse longstanding Medicaid policies and eliminate federal payments for a variety of critical Medicaid functions. The rules in question would affect: payments provided to public safety net institutions; coverage of rehabilitation services for people with disabilities; outreach and enrollment in schools as well as specialized medical transportation to school for children covered by Medicaid; graduate medical education payments; coverage of hospital clinic services; case management services that allow people with disabilities to remain in the community; state provider tax laws; and appeals filed through HHS. "I commend the subcommittee for supporting legislation that protects Medicaid beneficiaries from an onslaught of harmful regulations issued by the Bush administration," said Rep. Frank Pallone (D-NJ), Chairman of the Subcommittee on Health. "By passing this legislation, we are delaying regulations that undermine the longstanding partnership between the federal and state government that should not be implemented without considerable research on how they will impact millions of vulnerable Americans." Dingell’s amendment makes four key changes to H.R. 5613: It narrows the scope of the activities prohibited by replacing the language in H.R. 5613, as introduced, with the language used in the Medicare, Medicaid, and SCHIP Extension Act passed this past December. This language was acceptable to the Republican Members. It establishes an independent, comprehensive review of the regulations prior to the expiration of the moratorium next year. It provides additional funding to fight fraud and abuse in Medicaid. It would provide $25 million to HHS each year, beginning in FY2009, for anti-fraud activities related to Medicaid. It includes two offsets to ensure that the bill is fully paid for: Extending of an electronic asset verification demonstration for Medicaid applicants and beneficiaries; and Borrowing money from the Physician Assistance and Quality Improvement (PAQI) Fund in 2013 that will be replenished in 2014. During the markup, Ranking Member Joe Barton (R-TX), signaled his support for Dingell’s amendment, saying, “The bill, in its current form, H.R. 5613, we expected, and may yet get, a veto message from the Administration. The key phrase being ‘in its current form.’ Having said that, thanks to Chairman Pallone and Chairman Dingell for their good faith efforts to work with Congressman Murphy, myself and Ranking Member Deal. There is going to be a Manager’s Amendment sometime in this markup that changes 5613. I have asked the Administration and am reasonably confident that they will accede to my request that if the Manager’s Amendment is ultimately presented to them that they will not veto the legislation.” The National Governors Association, the National Association of State Medicaid Directors, and the American Public Human Services Association have all written bipartisan letters to HHS in opposition to the regulations. Additionally, numerous groups representing beneficiaries, particularly people with disabilities, have also publicly opposed these regulations. -30-

Prepared by the Committee on Energy and Commerce 2125 Rayburn House Office Building, Washington, DC 20515

February 29, 2008

From the Daily Report:

What Is the Implementation Date for the
Revised Medicaid Reimbursement Regulations? 

Q.       On slide E-8 of the Governor's Budget materials, you describe the unfavorable treatment of future Medicaid Administrative Activities (MAA) money. This money usually is received well after claims are filed. If the regulations become operative in September 2008, does that mean that claims filed in 2007-08 (and 2008-09 Q1) would be unfunded? Or will this timeline only affect claims filed after the September 2008 timeline? 

A.        According to a member of the Administrative Claiming Team, Division of Reimbursement and State Financing, of the Centers for Medicaid and Medicare Services (CMS), this is the latest on the implementation of the federal Medicaid Reimbursement Regulations: 

The publication of the final school-based rule (CMS-2287-F) on December 28, 2007, does not affect the ability of States to submit claims for costs incurred prior to the effective date of the rule; the rule will be applied prospectively. However, as you [may] know, there's a six-month moratorium on CMS' ability to enforce the rule, due to legislation recently signed into law. This moratorium is scheduled to end June 30, 2008.

Final regulations are typically effective 60 days after publication; however, due to the moratorium, that 60-day period starts once the moratorium ends. As a result, the implementation date for the rule will technically be September 1, 2008. CMS never intended States and schools to be in compliance with the final rule prior to the start of the 2008-2009 school year, so the moratorium really has no effect on that timeline.

With respect to claims for prior periods, all such claims must meet the timeliness requirements specified at 45 Code of Federal Regulations (CFR) 95.7. In addition, Section 1132(a) of the Social Security Act requires that a claim for federal financial participation (FFP) must be filed within a two-year period that begins on the first day of the calendar quarter immediately following the quarter in which the expenditure was made. The implementing regulations for timely filing are at 45 CFR Subpart A and provide specific guidelines for determining when an expenditure is said to have been made, so as to initiate the two-year filing period.

Finally, although I indicated that CMS was considering developing some sort of additional guidance to address questions surrounding implementation of CMS-2287-F, there are no official plans to do so at the current time and no format specified for any guidance that may ultimately be issued. 

Hopefully that will change. Additional guidance would be more than welcome. There continue to be legislative efforts at the federal level to extend the moratorium or repeal the regulations altogether. Stay tuned. 

-Nancy LaCasse