CSAC Bulletin Article

Medicaid Fiscal Accountability Rule Discontinued

September 17, 2020

This week, the Centers for Medicare and Medicaid Services (CMS) announced they would not move forward with their proposed Medicaid Fiscal Accountability Rule (MFAR). The federal rule, announced at the end of 2019, was intended to increase Medicaid fiscal transparency but attracted a host of responses from state and local governments voicing concerns, including the state of California and CSAC.  

The proposed rule would have restricted the use of non-public funds for the non-federal share used to draw down Federal Financing Participation. Additionally, CMS would have required substantial new data reporting requires and introduced a significant amount of ambiguous undefined terms. The finalization of this rule would have threatened the state’s current and future Medi-Cal program and impose significant workload and data requirements on the state, counties, and health care providers.

CSAC, along with the County Welfare Directors Association of California, submitted comments on January 31 opposing the new rule. The State Department of Health Care Services also opposed the rule during the comment period as well. After the official comment period was closed and the country began diverting financial and workforce resources to combating the impacts of the COVID-19 pandemic, CSAC urged California’s Congressional leadership to work towards suspending any movement on the CMS rule as the financial strains on the state and the medical needs statewide became apparent.

After CMS received more than 4,000 public comments during the comment period, and ongoing pressure from states, local governments, and organizations throughout the country, CMS Director Seema Varna announced on Twitter that the rule was being withdrawn. Please note that the rule has not yet been formally withdrawn and thus may be quickly revived, so caution is still warranted. But for now, CSAC is pleased with CMS’s public announcement and will continue to pay close attention to this issue.

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