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CEO Message

CEO Message: Good News on Proposed Federal Medi-Cal Cuts

On Monday, the Centers for Medicare & Medicaid Services (CMS) announced its intent to withdraw a proposal that would have cut total Medicaid funding by as much as $49 billion annually (8% of the program).  

The decision was made after significant opposition from providers — CHA worked closely with other hospital groups in California, other state hospital associations and the American Hospital Association to coordinate our opposition — alongside state regulators, governors, members of Congress, and patient advocacy groups. 

It comes at a critical time when hospitals continue to work through heavy financial losses driven by COVID-19. It also comes at a time when California’s hospitals are responding not only to the pandemic, but record-setting wildfires as well. 

Withdrawal of the Medicaid Fiscal Accountability Rule is a reprieve that hospitals need right now. 

While CMS has signaled the regulation will be removed from its 2020 fall regulatory agenda, the proposal must still be formally withdrawn. If it had been carried forward, it would have had a devastating impact on California — home to 13 million Medi-Cal enrollees, the most in the nation. 

At a time when COVID-19 could deplete California’s hospitals of more than $20 billion in resources for patient care, this rule would have been devastating. 

As with any rule, there is a chance this one could return, even if in a different form. The federal government has long been concerned with the integrity of the Medicaid program, and when the Trump administration proposed the rule in November, it noted concern that states were gaming the state-federal Medicaid financing system to collect additional federal dollars. That means the issue will likely remain a policy priority no matter who wins the election in November. 

We’ll keep vigilant and inform you of any developments but, for now, vital funds for Medi-Cal patients will remain secure. 

~ Carmela