[Federal Register Volume 86, Number 11 (Tuesday, January 19, 2021)]
[Proposed Rules]
[Pages 5105-5106]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-01078]



[[Page 5105]]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 430, 433, 447, 455, and 457

[CMS-2393-WN]
RIN 0938-AT50


Medicaid Program; Medicaid Fiscal Accountability Regulation

ACTION: Withdrawal of proposed rule.

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SUMMARY: This document withdraws a proposed rule that was published in 
the Federal Register on November 18, 2019. The proposed rule would have 
established new reporting requirements and codified other Medicaid 
financing requirements, including related to permissible sources for 
non-federal share financing.

DATES: The proposed rule on Medicaid Fiscal Accountability Regulation, 
published on November 18, 2019 at 84 FR 63722 is withdrawn January 21, 
2021.

ADDRESSES: In commenting, please refer to file code CMS-2393-WN.
    Comments, including mass comment submissions, must be submitted in 
one of the following three ways (please choose only one of the ways 
listed):
    1. Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-2393-WN, P.O. Box 8016, 
Baltimore, MD 21244-8016.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-2393-WN, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.

FOR FURTHER INFORMATION CONTACT: 
    Andrew Badaracco, (410) 786-4589, Richard Kimball, (410) 786-2278, 
and Daniil Yablochnikov, (410) 786-8912, for Medicaid Provider 
Payments, Supplemental Payments, Upper Payment Limits, Provider 
Categories, Intergovernmental Transfers, and Certified Public 
Expenditures.
    Timothy Davidson, (410) 786-1167, Jonathan Endelman, (410) 786-
4738, and Stuart Goldstein, (410) 786-0694, for Health Care-Related 
Taxes, Provider-Related Donations, and Disallowances.
    Lia Adams, (410) 786-8258, Charlie Arnold, (404) 562-7425, Richard 
Cuno, (410) 786-1111, and Charles Hines, (410) 786-0252, for Medicaid 
Disproportionate Share Hospital Payments and Overpayments.
    Jennifer Clark, (410) 786-2013, and Deborah McClure, (410) 786-
3128, for Children's Health Insurance Program (CHIP).

SUPPLEMENTARY INFORMATION: On November 18, 2019, we published a 
proposed rule that proposed to amend our regulations dealing with 
grants to states for medical assistance programs, state fiscal 
administration, payments for services, Medicaid program integrity, and 
allotments to states and grants. (84 FR 63722). After an internal 
review of the proposed rule, CMS has decided to withdraw the proposed 
rule.
    The proposed rule sought to promote accountability and transparency 
for Medicaid payments by establishing new reporting requirements for 
states to provide CMS with certain information on supplemental payments 
to Medicaid providers, including supplemental payments approved under 
either Medicaid state plan or demonstration authority, codification of 
parameters for Medicaid upper payment limit calculations, provider 
definitions associated with data reporting and Medicaid financing, 
Medicaid disproportionate share hospital audit requirements and changes 
to some existing operational processes to better align with technology 
improvements. This proposed rule also sought to establish additional 
requirements to ensure that state plan amendments proposing new 
supplemental payments are consistent with the proper and efficient 
operation of the state plan and with efficiency, economy, and quality 
of care. Finally, this proposed rule sought to address the non-federal 
share financing of supplemental and base Medicaid payments, including 
states' uses of health care-related taxes and provider-related 
donations, and other requirements for sources of the non-federal share.
    We received approximately 10,188 individual comments (4,225 
unduplicated comment submissions) through the extended comment 
period.\1\ We received significant comments on the proposed rule 
regarding its potential impact on states and their budgets, Medicaid 
providers and Medicaid beneficiary access to needed services. Many 
commenters stated their belief that the proposed rule did not include 
adequate analysis of these matters. Numerous commenters indicated that 
CMS, in some instances, lacked statutory authority for its proposals 
and was creating regulatory provisions that were ambiguous or unclear 
and subject to excessive Agency discretion.
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    \1\ On December 30, 2019, CMS extended the comment period for 
the November 18, 2019, proposed rule by 15 days, from January 17, 
2020, to February 1, 2020, in response to feedback from stakeholders 
indicating additional time was needed to review the proposed rule in 
light of several holidays and the complexity of the rule.
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    While we continue to support the intent and purpose of the rule to 
increase fiscal accountability and improve transparency in the Medicaid 
program, based on the considerable feedback we received through the 
public comment process, we have determined it appropriate to withdraw 
the proposed provisions at this time. Moving forward, we want to ensure 
agency flexibility in re-examining these important issues and exploring 
options and possible alternative approaches that best implement the 
requirements of the Medicaid statute. We also believe it is important 
to re-examine and fully analyze the proposed Medicaid reporting 
requirements in consideration of the recent Congressional action 
through the Consolidated Appropriations Act of 2021 (H.R. 116-133, Pub. 
L. 116-260) which establishes new statutory requirements for Medicaid 
supplemental payment reporting. This withdrawal action does not limit 
our prerogative to make new regulatory proposals in the areas addressed 
by the withdrawn proposed rule, including new proposals that may be 
substantially identical or similar to those described therein.
    Finally, the withdrawal of this proposed rule does not affect 
existing federal legal requirements or policy that were merely proposed 
to be codified in regulation, including certain provisions related to 
Medicaid financing and Medicaid Upper Payment Limit (UPL) requirements. 
For example, without limitation, this includes guidance in State 
Medicaid Director Letter (SMDL) #13-003, which discussed a submission 
process to comply with the UPL requirements; SMDL #14-004, which 
discussed Medicaid financing and provider-related donations; as well as 
State Health Officials (SHO) Letter #14-001, which addressed health 
care-related taxes. This withdrawal action does not affect CMS' ongoing 
application of existing statutory and regulatory requirements or its

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responsibility to faithfully administer the Medicaid program.

    Dated: January 12, 2021.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
    Dated: January 12, 2021.
Alex M. Azar II,
Secretary, Department of Health and Human Services.
[FR Doc. 2021-01078 Filed 1-14-21; 4:15 pm]
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