CMS has published a proposed rule

Healthcare Financial Management, March, 2007

CMS has published a proposed rule (Federal Register, Jan. 18, 2007) that would clarify that entities involved in the financing of the nonfederal share of Medicaid payments must be a unit of government, clarify the documentation required to support a certified public expenditure, limit reimbursement for healthcare providers that are operated by units of government to an amount that does not exceed the provider's cost, require providers to receive and retain the full amount of total computable payments for services furnished under the approved state plan, and make conforming changes to provisions governing the State Child Health Insurance Program.

The provisions of this regulation apply to all providers of Medicaid and SCHIP services, except that Medicaid managed care organizations and SCHIP providers are not subject to the cost limit provision of this regulation. Except as noted above, all Medicaid payments (including disproportionate share hospital payments) made under the authority of the state plan and under Medicaid waiver and demonstration authorities are subject to all provisions of this regulation. Comments must be received by March 19, 2007.