The Centers for Medicare & Medicaid Services (CMS) is revoking the authority of states to “divert” certain Medicaid provider payments to a third party (rather than make the payment directly to the provider) to fund other costs on behalf of the provider “for benefits such as health insurance, skills training, and other benefits customary for employees.” This reassignment authority, which was granted in a 2014 rule, had been intended to “enhance state options to provide practitioners with benefits that improve their ability to function as health care professionals.” In a final rule published May 6, 2019, CMS has changed course and determined that this policy was “neither explicitly nor implicitly authorized by the statute.” While individual practitioners may purchase or contribute to the items previously allowed under this authority through transactions separate from their Medicaid reimbursement, CMS contends that states may not redirect payment that the statute requires be made directly to the practitioner. The rule is effective July 5, 2019.
