Staff Contact: Jane Drummond or Kim Duggan
CMS notified MHD that the directed payments methodology for reimbursing inpatient and outpatient hospital services through the managed care plans was approved effective July 1. Additional correspondence from the agency indicated it would not require the changes to be retroactive to SFY 2022.
In a separate letter, CMS advised MHD of its belief that the MHA Management Services’ pooling arrangement may violate federal statute and regulation as an impermissible hold harmless arrangement. CMS intends to conduct a focused review of pooling activity and threatens to withhold federal financing if it determines the arrangement to be unlawful.
The pooling arrangement was audited by HHS in 2001 and determined to comply with the law. The law has not changed since that date. MHD officials are working with MHA staff to resolve CMS’ concerns with the pool.
