CMS Officially Amends Medicaid Regulations to Remove Cost Limit Rule - December 8, 2010

The federal Centers for Medicare & Medicaid Services (CMS) on Nov. 30 issued a final rule to remove changes made by the final Medicaid Cost Limit Rule from the official version of federal regulations published in the Code of Federal Regulations (CFR). The Cost Limit Final Rule, published by CMS on May 29, 2007, would have, among other provisions, significantly reduced Medicaid payments to NAPH members by restricting the definition of “unit of government” for purposes of funding the non-federal share of Medicaid payments and limiting reimbursement to health care providers operated by units of government to the provider’s Medicaid cost. The U.S. District Court for the District of Columbia vacated the final rule in 2008 as a result of a successful lawsuit brought by NAPH, along with the American Hospital Association and the Association of American Medical Colleges, but CMS had not yet taken the ministerial step of restoring the language of the regulations as they existed before the Final Rule.