This rule looks to limit provider taxes levied by states on Medicaid providers that are used to maximize federal matching funds (sometimes called FMAP).  Washington uses the Safety Net Assessment (SNA) in this way.  Some states currently use provider taxes that are higher for high Medicaid facilities and lower for low Medicaid facilities.  The intent of MFAR is to limit the use of state provider taxes so that high Medicaid facilities are no longer shouldering the burden.  Overall, the SNA in Washington taxes some low Medicaid facilities at a higher rate than some high Medicaid facilities. 

MFAR also looks to eliminate any exemptions to such taxes that excludes or imposes a lower tax rate on a taxpayer group defined based on any commonality that, considering the totality of the circumstances, CMS reasonably determines to be used as a proxy for the taxpayer group having no Medicaid activity or relatively lower Medicaid activity than any other taxpayer group.  Currently the SNA has an exemption for Continuing Care Retirement Communities (CCRC) or “CCRC like” facilities that is at jeopardy under the proposed rule.  Washington’s SNA currently defines CCRC/CCRC like facilities as –“(2) “Continuing care retirement community” means a facility that provides a continuum of services by one operational entity or related organization providing independent living services, or *boarding home or assisted living services under chapter 18.20 RCW, and skilled nursing services under chapter 18.51 RCW in a single contiguous campus. The number of licensed nursing home beds must be sixty percent or less of the total number of beds available in the entire continuing care retirement community. For purposes of this subsection “contiguous” means land adjoining or touching other property held by the same or related organization including land divided by a public road.” RCW 74.48.010

Also questionable is the large bedded exception permitted under Washington’s SNA.  SNFs with licensed beds at or above 203 irrespective of the Medicaid days served could be viewed by CMS as an attempt to carve out and minimize the tax burden on such facilities while other large bedded, high Medicaid volume facilities also pay the lower tax rate.    

If MFAR stays as it is currently written, Washington would most likely need to remove most of the exemptions that are currently in place.  All facilities that are currently exempt due to CCRC/CCRC like or having a high bed count (currently 203 licensed beds or more) would then be forced to pay the high SNA fee, currently $23 per resident day, excluding Medicare and Medicare advantage days.  This could have a devastating effect on many LeadingAge Washington members.   Also in jeopardy are large bedded, low volume Medicaid SNFs which would be forced to pay the higher tax, assuming the rule is adopted as written.  For all LeadingAge Washington SNF members combined this could mean almost $5,000,000 more in costs per year.  The high volume Medicaid exception – 32,000 days and above as an exception will likely be unaffected by the rule.

LeadingAge national has created a webpage with more information here – https://leadingage.org/mfar.  They have also scheduled a phone call for members today 1/16/2020 at 12:00pm Pacific time.  You can register for this phone call here – https://attendee.gotowebinar.com/register/4066254987895233292.

Linked – You will find the letter that LeadingAge Washington is submitting to CMS in opposition to this proposed rule.  We are also working with WaCCRA, the WA Continuing Care Resident Association, to encourage them to submit a letter opposing the CMS provider tax rule.

Linked – Is the letter that LeadingAge national submitted in coordination with the National Continuing Care Residents Association ,NaCCRA.

We encourage all members to submit comments in opposition to this rule and ask CMS to either withdraw the proposed rule and/or make revisions that would protect facilities that would be harmed by unfair taxes levied on them.  For reference, you may use language from either of the letters attached to frame your comments.  We also encourage all members to reach out to their congressional delegations.  You can find your U.S. Congress person here – https://www.house.gov/representatives/find-your-representative.

To view the proposed rule and submit comments visit this web page – https://www.federalregister.gov/documents/2019/11/18/2019-24763/medicaid-program-medicaid-fiscal-accountability-regulation

Comments must be submitted prior to February 1^st.

Please reach out with any questions or concerns.

David Carter
Director Health Care Finance & Policy, LeadingAge Washington 
p: 253.964.8870