CMS has finalized a rule to ensure that states cannot divert portions of Medicaid provider payments to third parties beyond what is allowed in the statute.
Specifically, the final rule does away with a 2014 revision in the Medicaid Provider Reassignment regulation that provided an exception to the direct payment requirement for certain providers, including independent in-home personal care workers, according to CMS. That revision allowed states to make Medicaid payments to third parties on behalf of certain providers.
“After further review, CMS has determined that the new exception created by the 2014 rule is not authorized by the statute and may have resulted in provider payments being diverted in ways that do not comport with the law,” the agency stated in a press release. “Therefore, CMS is finalizing the rule to remove this impermissible exception.”
The final rule comes after CMS received more than 7,000 comments during a public comment period on the proposed rule.
“State Medicaid programs are responsible for ensuring that taxpayer dollars are dedicated to providing healthcare services for low-income, vulnerable Americans and are not diverted in ways that do not comply with federal law,” CMS Administrator Seema Verma said in a statement. “This final rule is intended to ensure that providers receive their complete payment, and that any circumstance where a state redirects part of a provider’s payment is clearly allowed under the law.”
See the final rule here.