Trump administration comes up with yet another way to destroy Medicaid and rural health care

The Trump administration is determined to destroy Medicaid, chipping away at it from all angles. From work requirements to block grants, Trump is using the regulatory tools at hand—largely in defiance of Medicaid law—to demolish the program. While the block grant rules have received the largest amount of opposition and attention recently, Centers for Medicare and Medicaid Services Administrator Seema Verma was sneaking out another one, the Medicaid Fiscal Accountability Regulation that could drastically reduce the federal funding contribution to states. That could mean cuts as high as $11 billion annually in the state of Texas alone. That's $11 billion, in one year, in one state. Nationwide, it could mean up to $31 billion lost to hospitals across the country.

It would mean $500 million, annually, lost to hospitals just in Houston. It would probably cost rural hospitals across the state a yearly $900 million, when rural hospitals are already in jeopardy. The Texas Organization for Rural and Community Hospitals (TORCH) has done an analysis finding that nearly half—46%—of the state's real hospitals are already running at a loss, and 26 of them have been shuttered in the last decade. That's in large part a result of Texas refusing to take Medicaid expansion under the Affordable Care Act, and the state has experienced the highest rate of rural hospital closures in the nation. This rule would result in even more closures.

That's one reason the hospital industry is gearing up to fight the rule. "We are deeply concerned that, if finalized, this rule would end up denying millions of Americans access to healthcare," said Erin O'Malley, senior director of policy for America’s Essential Hospitals told Modern Healthcare. The rules would put an onerous reporting requirement on the states, requiring far more information reported and a more intensive review process at the federal level—meaning it would cost CMS more to implement and run. "The administration purports that these changes would strengthen the overall fiscal integrity of the Medicaid program," O'Malley said. "It runs counter to that goal because, in large part, it would weaken state flexibility."

States and providers currently count money received via state and local taxes, patient revenues, lease income, and grants among other revenue sources as public funds, and contribute it to the amount eligible for federal matching dollars. The new rule would limit these "public funds" to just state and local tax support, cutting out patient revenue and the other income. The loss of those funds in many states would mean hospital closures, which would affect everyone. It could also lead to physicians refusing to take Medicaid patients because of the reduced payments from states, meaning less access to care for them.

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