Medicaid Fiscal Accountability Regulation (MFAR)

This posting provides an overview of the Medicaid Fiscal Accountability Rule (MFAR) that was introduced by the Centers for Medicare and Medicaid Services (CMS) in November 2019. The rule, according to the Federal Register, will “promote transparency by establishing new reporting requirements for states to provide CMS with certain information on supplemental payments to Medicaid providers.” In addition to supplemental payments, the rule addresses the non-federal share of base Medicaid payments (payments to providers for services) as well as provider donations and health care-related taxes. While many aspects of the impact of the rule are unknown and will certainly vary greatly by state, a summary is provided here along with some of the broader implications for Texas. I. Medicaid Financing Basics First, an overview of the financing of the Medicaid program is in order. The Medicaid program is an entitlement federal/state partnership program. This means that the federal government