Sending Office: Honorable Donna E. Shalala
Sent By:

The deadline for signing this letter is Tuesday, February 4th COB

Dear Colleagues,

We are writing to ask you to join us in signing a bipartisan letter urging the Centers for Medicare and Medicaid Services (CMS) to withdraw the proposed changes to the Medicaid Fiscal Accountability Regulation (MFAR).
The MFAR proposal as written could have unintended consequences for the older Americans we represent by significantly curtailing the longstanding flexibility states have to fund and pay for services in their Medicaid programs.

The current Medicaid policy allows states to use provider-based taxes to receive federal Medicaid matching funds. Many states provide a waiver to the state provider-based taxes to Continuing Care Retirement Communities (CCRCs). CCRCs are private-pay, long-term
care communities that are home to more than 700,000 older Americans across the United States. Under the MFAR rule, these longstanding waivers for provider tax exemptions for CCRCs will no longer be permitted.

CCRCs will likely be forced to pass the cost to the consumer through higher entrance fees or monthly fees that range from hundreds to thousands of dollars. This change constricts the availability of high-quality, long-term care communities at a time when
demand is rapidly increasing.

Please join us in asking CMS to not proceed forward with the proposed MFAR rule due to its negative impact on seniors in our communities.  If you have additional questions about the letter or would like to join,  please contact Alison Hernandez (
with Congresswoman Shalala or Lizzie Messer ( with Congressman Rutherford.


Donna E. Shalala                                                                  John H. Rutherford                             

Member of Congress                                                            Member of Congress 


Text Bellow


Seema Verma, MPH


Centers for Medicare & Medicaid Services

Department of Health and Human Services

Hubert H. Humphrey Building

200 Independence Avenue SW

Washington, DC 20201

Dear Administrator Verma:                                                        

We write regarding the proposed Medicaid Fiscal Accountability Regulation (MFAR) (Docket Number: CMS-2393-P) from November 18, 2019. We appreciate CMS’ intent of promoting financial integrity in state Medicaid programs. However, the MFAR proposal as written
could have unintended consequences for certain nursing homes and lead to increased costs for the older Americans we represent. Under the MFAR rule, states will have to repeal their exemptions from the nursing home provider bed tax that currently applies to
continuing care retirement communities (CCRCs). CCRCs are likely to lose their exemption and be assessed additional state taxes, the costs of which could be passed on to CCRC residents, limiting access to and reducing the affordability of these communities.

CCRCs are a critical component of the aging services system. There are about 2,000 such communities across the country. Collectively, these communities are home to more than 700,000 Americans who rely on CCRCs to provide them with a full range of housing
and services as they age, from dining services and social activity to skilled nursing care. CCRC residents are older adults, with the average new resident being 80 years old, and the vast majority of residents pay for care in CCRCs out-of-pocket (e.g. not
with Medicare or Medicaid dollars). Almost two in three (65%) CCRCs are sponsored by a faith-based organization and most (79%) are nonprofit organizations. CCRCs often have nursing homes on-site, sometimes referred to as health centers. These nursing homes
operate like any other nursing home and must comply with federal and state nursing home regulations.

Most CCRC nursing homes do not participate in the Medicaid program or do so in a limited capacity. Because of this, many states exempt these communities from paying state provider taxes or assess them a reduced provider tax rate. Under the proposed MFAR
rule, retirees across the country who plan carefully for long term care could face increased out-of-pocket costs if CCRCs were to pass the cost to the consumer through heightened entrance fees or monthly fees. While the exact cost of these new taxes would
vary by state and by community, the price for seniors living in CCRCs in our communities could be significant to people who live on fixed incomes and have carefully planned for retirement costs, possibly adding several hundred dollars to a resident’s monthly
expenses.  To that end, we urge CMS to withdraw the proposed changes to 42 CFR § 433.68 or to include language in any final rulemaking that makes clear that state provider tax exemptions and discounts for CCRCs comply with the final rule.

We do not believe it’s the intention of CMS to take regulatory action that would increase state taxes or the cost of nursing home care for private-pay residents. The proposed MFAR, however, could do just that by disallowing provider tax exemptions or discounts
for nursing homes that serve all or mostly older residents who pay out-of-pocket. This change constricts the availability of high-quality nursing home beds at a time when demand is increasing exponentially. Older Americans who have spent their lives contributing
to their communities and planning their retirements will pay the price.

We urge CMS to protect these older Americans.











Related Legislative Issues

Selected legislative information: HealthCare, Rules/Legislative Branch, Taxes

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