The Protecting the Medicaid Safety Net Act suspends seven new Medicaid regulations until April 1, 2009 and establishes an independent review of these regulations during that time. The regulations were originally imposed by the Centers for Medicare and Medicaid Services, a division of the U.S. Department of Health and Human Services. The suspended regulations would:
• Restrict the amount that the federal government reimburses public hospitals, nursing homes, and other institutions run by state and local governments for Medicaid services;
• Eliminate federal Medicaid funding for teaching hospitals to train physicians;
• Limit the type of rehabilitation services eligible for federal Medicaid funding, particularly restricting services for those with mental illness or developmental disabilities;
• Eliminate federal funding for schools to perform Medicaid administrative services, such as outreach, help with enrollment and coordinating health care services for children and for transporting Medicaid-enrolled children with special health needs to school if they receive medical services there;
• Restricts the types of outpatient medical services covered by Medicaid;
• Limits federal Medicaid funding for case management services that coordinate medical, social, and educational services for groups such as children in foster care and individuals leaving nursing homes;
• Limit states’ ability to tax health care providers to help pay for Medicaid.
Federal Medicaid spending would be reduced by as much as $21 billion over five years as a result of these regulations.
The Middle-Class Position:
The Middle-Class Supports. More than 55 million Americans, predominantly low-income people and people with disabilities, rely on Medicaid for their health care coverage. By halting dramatic restrictions in federal funding for Medicaid, this legislation not only ensures continued health care access for these aspiring middle-class beneficiaries but also prevents a devastating loss of funding to states, public hospitals, and local schools which are already struggling during the economic downturn. In reality, the Medicaid regulations imposed by the Bush Administration do little to reduce Medicaid costs – they simply transfer these costs from the federal government onto states, hospitals, and local governments. In an effort to cope with the added cost burden, services that benefit the middle class, from trauma care at hospitals to public education, are put at risk.
From the Experts:
“As we navigate choppy economic waters, it is important to remember that close to 30 million children depend on the Medicaid program. It is critical to their health that Medicaid remain strong. The Administration’s repeated attacks on the program, embodied in the regulations that the Act wisely delays, will harm them. Beyond the immediate damage to children’s health, it is clear that State and federal cost-containment strategies targeting children are not likely to yield significant savings and, in fact, will likely result in far greater expenditures. Costs do not disappear when children are cut from or drop out of the Medicaid program. States may experience higher expenditures in areas such as primary clinics in public health departments, increased utilization of emergency departments, and an increase in the number of preventable hospitalizations.” – Renée R. Jenkins, MD, FAAP President, The American Academy of Pediatrics (March 26, 2008)
“The nation's governors support your efforts to delay the series of Medicaid regulations issued by the Centers for Medicare and Medicaid Services (CMS) that will shift billions of dollars in federal costs to states. As you know, some of these regulations already have become effective and current state estimates of the impact could be as high as four times the Administration’s $13 billion estimate. Therefore, timely action by Congress continues to be critical to avert significant disruptions in coverage for vulnerable populations.” – Governor Tim Pawlenty (R-MN), Governor Edward G. Rendell (D-PA), Governor James H. Douglas (R-VT), and Governor Jon S. Corzine (D-NJ), on behalf of the National Governors Association (May 2, 2008)
Beyond this Bill:
The problems posed by the new Medicaid regulations illustrate the potential pitfalls of attempting to cut costs for the program. While initiatives such as fraud prevention, improving disease management, streamlining administration and negotiating lower prices for prescription drugs have the potential to reduce Medicaid costs without compromising the quality of care, many other purported cost-reduction measures simply shift costs or reduce access to necessary care. In general, the cost of Medicaid is rising not because the program is particularly wasteful or inefficient (in fact, studies suggest that Medicaid may be more cost-effective than private insurance) but because health care overall is becoming more expensive in the U.S. The most relevant question for public officials may not be how to cut Medicaid costs but how to adequately and fairly fund this vital program.
Number of jobs the State of California alone stands to lose as a result of lost federal Medicaid funding from the new regulations, according to Families USA: 46,700
Year when the Departments of Health and Human Services, Education and Agriculture published a report concluding that schools were the best conduit for enrolling poor children in Medicaid: 2000
Date on which the Department of Health and Human Services acted to eliminate federal funds for outreach and enrollment of children in Medicaid through schools: 12/28/2007
Number of people – predominantly mentally ill individuals – who received psychiatric and other rehabilitation services under Medicaid in 2007: 1.46 million
Estimated amount of money the federal government would save in 2009 by ceasing to cover these services: $360 million
Approximate number of hours it takes to spend $360 million on the war in Iraq: 25
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