Noteworthy News

CMS Guidance on MCO Payments is Good News for Safety-net Hospitals

New guidance from the Centers for Medicare & Medicaid Services on the use of directing supplemental Medicaid resources to hospitals through Medicaid managed care organizations is good news for many urban safety-net hospitals across the country.

In many states, new revenue generated by state hospital taxes (assessments) are routed through the state’s Medicaid managed care plans.  Recently, however, it has not been clear whether the federal government would permit continued use of this mechanism.

An early November bulletin from CMS, however, clarifies that this approach is still permissible, which is good news for many urban safety-net hospitals located in states that tax their hospitals and distribute some of the proceeds from their taxes through organizations that provide managed care services to their state’s Medicaid population.

Go here to see the CMS memo “Delivery System and Provider Payment Initiatives under Medicaid Managed Care Contracts.”

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