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Summary:
On May 29, 2007, the Centers for Medicare and Medicaid Services (CMS) issued a rule intended to establish control over the use and misuse of intergovernmental transfers in financing the states' shares of Medicaid costs. The rule clarifies the types of intergovernmental transfers of funds allowable for financing a portion of Medicaid costs, imposes a limit on Medicaid reimbursements for government-owned hospitals and other institutional providers, and requires certain providers to retain all of their Medicaid reimbursements. In addition, the rule would establish documentation requirements to substantiate that a governmental entity is making a certified public expenditure (CPE) when contributing to the state share of Medicaid. The rule has raised considerable concern among states and health care providers that its impact on Medicaid services, providers, and beneficiaries could be severe, and Congress has acted to place a moratorium on the implementation of its provisions until May of 2008. Other legislation addressing the regulation is currently under consideration.
