MACPAC Reviews Hospital Payment Index, Implementation of Medicaid Changes in OBBBA

The Medicaid and CHIP Payment and Access Commission (MACPAC) met on Sept. 24 and 25 to discuss the implementation of community engagement requirements, proposed rules on state directed payments (SDPs) and provider taxes, and comparisons of inpatient hospital payment rates.

Commissioners first reviewed the interim final rule from the Centers for Medicare & Medicaid Services (CMS) on Medicaid community engagement requirements. They also heard from the National Association of Medicaid Directors and from Health Management Associates on state implementation of community engagement requirements, highlighting variation between states. MACPAC plans to continue this discussion and review updates during its October session. Commissioners then reviewed the CMS’ proposed rules on changes to SDPs and provider taxes, including the commission’s comment letters to the CMS. Related to SDPs, MACPAC shared concerns with the application of the Medicare-based limits on SDPs and targeted fee-for-service practitioner payments at the service level. Related to provider taxes, the commission shared support for reporting of provider tax information in line with its previous recommendations. Commissioners expressed concerns with the elimination of the 75/75 test and operational challenges with aligning the safe harbor threshold based on the federal instead of state fiscal year. They also requested clarification on the proposed new provider class for health insurers.

The commission reviewed an update of its 2017 Medicaid inpatient hospital payment index to allow for comparison of Medicaid hospital payments across states. Next steps include comparing Medicaid inpatient hospital rates with Medicare payment rates, developing a new chapter on the findings, and conducting a similar analysis of Medicaid payment for outpatient hospital services.