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Proposed Federal Rule Change Could Blow A Huge Hole In The Massachusetts Budget

The Massachusetts Statehouse.
Jesse Costa
The Massachusetts Statehouse.

The Trump administration has proposed a rule change for Medicaid, putting up to $2.4 billion in jeopardy in the Massachusetts budget. 

Governor Charlie Baker is taking note while the state tries to guess at the potential impact.

Matt Murphy of the State House News Service joins us to talk about the proposed change, and the uncertainty it's causing for Massachusetts officials.

Matt Murphy, State House News Service: The Centers for Medicare & Medicaid Services (CMS) proposed a new rule back in November that would change the way they reimburse states for its Medicaid program. In Massachusetts, that would be the over-$16 billion MassHealth program that covers low-income and disabled people throughout the state.

We saw a document last week prepared by the Baker administration that put a price tag on these changes of between $365 million to as much as $2.4 billion in potential lost federal revenue by these changes.

And this is something that is crossing party lines.

We spent a good amount of time going through some of the comments — and from states from Massachusetts all the way to Florida, where a Republican governor and close ally of the Trump administration, we should point out, they are also very concerned.

This could impact nursing homes. It could impact the safety net hospitals — places like Boston Medical Center and others — that serve a disproportionately high number of Medicaid patients.

And so the states are really pushing back and trying to get the Trump administration to — if not pull this rule altogether — amend it.

Lawmakers are building a budget at the same time that there's uncertainty around this federal rule. So how tricky is that?

Yeah — the Medicaid line item is the biggest portion of the state budget, close to $17 billion now. This would create a huge hole if it were to go into effect, and all of the worst case scenarios about some of the financing that the state relies on to pay for its Medicaid program were to go away.

It's been difficult to peg down. Even CMS has not done a full accounting of what the impact would be to states.

Massachusetts officials are guessing how this rule would be applied, which is part of the problem that they've argued to CMS — that the rule is vague, and will create a lot of uncertainty, and that is sure to trickle down to the state budgeting process, as well, if the administration and CMS [do] not clarify what they're planning to do soon.

Last week, the legislature's economic development committee asked for a new due date for reporting back on a number of proposed bills. State Senator Eric Lesser said all 21 had to do with gaming or sports betting. We're now looking at a deadline at the end of the month — so would that indicate a full debate on sports betting is actually coming soon?

It's certainly created some optimism. While some committees asked for longer extensions on bills before them — March, some even pushing deadlines out until June — the fact that the economic development committee [is] asking only to have until the end of this month to report on bills suggests that they may be getting close to recommending a path forward, particularly on the sports betting piece.

I think we've talked about it before — there's about $35 million in the governor's budget that's reliant on sports betting becoming legal. The legislature would have to replace that money if they don't get sports betting done. 

But this is something that the governor would like to see done, and legislators have been studying for a while. And you're right, the fact that they asked for a February 28 deadline does suggest that they could be getting close.

What's going on during school vacation this week at the Statehouse?

School vacation week this week, so legislators are pretty much off too, the House and Senate. No big sessions, no major votes planned for this week.

But we will get the first head-to-head showdown between Senator Ed Markey and Congressman Joe Kennedy — their first debate here in Boston, at WGBH studios in Brighton. That will be televised and it should be a good kickoff to what is sure to be an interesting contest in 2020.

Keep up here with Beacon Hill In 5.

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