Capitol Correspondence - 02.18.20

CMS Administrator Verma, Allies Go on Defensive for Provider Tax Proposal

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In the face of strong pushback from many health organizations and state governors, Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma sought to defend her agency’s proposed Medicaid Fiscal Accountability Regulation (MFAR). Because of our concerns with the MFAR proposal, ANCOR submitted a formal comment calling for greater analysis of the rule’s potential impact on states before the rulemaking process moves forward. In response to the broader criticism surrounding the proposal, Administrator Verma wrote a blog post asserting the importance of ensuring fiscal accountability in Medicaid:

“Protecting Medicaid and ensuring it remains sustainable and able to provide access to high quality care for society’s most vulnerable populations is a top priority for the Trump administration.  Medicaid plays a critical role in the fabric of our nation’s health care safety net and the Trump administration has consistently worked to provide states with the flexibility needed to effectively manage their programs, ensure accountability for patient outcomes, and foster strong program integrity to ensure that taxpayer resources benefit Medicaid recipients.  The urgency of this responsibility is only underscored by the projections that the program is already the first or second largest budget item in every state, and total annual spending by the states and the federal government together is forecast to reach $1 trillion by the end of the decade.” The blog continues on to state the goals of the rule and dive into components such as the role of supplemental payments, otherwise known as provider taxes. The Administrator also issued a series of tweets on the topic.

In the same week, former Administration official Brian Blase echoed Administrator Verma’s messaging in an article in the Daily Signal. He specifically argued that “ One such technique involves provider taxes, which Oregon state Rep. Merwyn ‘Mitch’ Greenlick referred to as a ‘dream tax’ for states: ‘We collect the tax from the hospitals,” the Democrat explained. “We put it up as a match for federal money, and then we give it back to the hospitals.’


The federal-state Medicaid partnership needs to be corrected so that the incentives are aligned to focus on maximizing value for program enrollees and not the profits of the health care industry.”

At the same time that she is taking a public stance defending the MFAR, Administrator Verma is reshuffling communications staff within CMS, possibly signaling her intention to further defend signature policies issued under her leadership. As reported by Politico Pro: “CMS Administrator Seema Verma is bringing back a former spokesperson, Johnathan Monroe, to offer high-level strategic and communications support at a crucial time for her agenda, two people with knowledge of Monroe’s hiring told POLITICO.

Monroe, who served as CMS media chief between 2017 and 2019, left the agency three months ago for a role in HHS’ division for children and families. His new position is based in Verma’s office and intended to help CMS get more attention for its initiatives. Ninio Fetalvo will also continue to handle communications for CMS and Verma.


Monroe’s return comes as Verma faces increasing scrutiny over her policies, including last month’s rollout of Medicaid block grants and a recent Medicaid fiscal accountability rule that’s alarmed states and hospitals. House Democrats and the HHS inspector general are still probing Verma’s spending on publicity consultants, which prompted some Democratic lawmakers to call for her resignation.”