Medicaid Payment Reduction Opposed
A bipartisan group of 44 senators in a letter sent to HHS Secretary Mike Leavitt on Thursday said the Bush administration should not act on proposals that would reduce Medicaid payments for providers by $12.2 billion over five years, CQ HealthBeat reports (Reichard, CQ HealthBeat, 6/30).
According to CongressDaily, federal officials made an administrative proposal to limit states' ability to use "provider assessments," a tax on providers that increases the amount of matching funds provided to Medicaid by the federal government. Those assessments are balanced by higher Medicaid payments to providers (Heil, CongressDaily, 6/30).
In the letter signed by 17 Republicans and 27 Democrats, the senators -- led by Sens. Max Baucus (D-Mont.) and Gordon Smith (R-Ore.) -- said the plan would reduce the allowable size of those taxes from 6% to 3%. Decreasing the nursing home tax would reduce funding nationwide for long-term care by $1.6 billion and could force some rural nursing homes to close, they said.
The reductions also could limit services to the mentally disabled and harm some hospitals, the senators added.
HHS spokesperson Christina Pearson said, "We continue to support the president's proposal, which helps alleviate significant tax burdens on health care providers for obligations to the Medicaid program that are otherwise the responsibility of the states" (CQ HealthBeat, 6/30).
The federal government also proposed limiting payments to providers to "no more than the cost of furnishing services to Medicaid beneficiaries."
In the letter, senators said that change would prevent providers from making even "a nominal return on the services provided and would undermine the quality of care these hospitals provide and impair their ability to provide subsidized care for the uninsured populations they now serve." The letter stated, "We do not believe it is appropriate for the department, under the administrative authority of [CMS], to make these changes" (CongressDaily, 6/30).