Proposed Medicaid Cuts Opposed
The National Governors Association, nursing home industry officials and lawmakers from both parties are urging congressional action to stop the Bush administration from implementing proposed rules that would reduce Medicaid payments to hospitals and nursing homes by $12.2 billion over five years, the St. Louis Post-Dispatch reports (Sichko, St. Louis Post-Dispatch, 12/6).
The rules would reduce from 6% to 3% the allowable rate that states can tax public hospitals and nursing homes. Two-thirds of states currently impose such taxes. States impose the taxes to increase the amount of Medicaid matching funds provided by the federal government and offset the cost of the taxes for hospitals and nursing homes through higher reimbursements.
In addition, the rules would limit Medicaid reimbursements for hospitals and nursing homes to the "actual cost of services." According to the Bush administration, states have used a number of improper accounting practices to increase the amount of Medicaid matching funds provided by the federal government (California Healthline, 8/14).
CQ HealthBeat reports that the administration likely will issue regulations soon for implementing the changes, which are expected to take effect in May 2007. HHS Secretary Mike Leavitt said the administration plans "no changes" in the proposal.
He added, "The administration's been clear in what they've planned to do and why they plan to do it, and we'll see how it plays out" (Carey, CQ HealthBeat, 12/5).
A CMS spokesperson on Tuesday said that there is no timetable for the proposed changes (Sichko, St. Louis Post-Dispatch, 12/6).
Opponents of the proposed rules say the changes would cause budget shortfalls for states and force reductions in services. The proposal would reduce Medicaid reimbursements to nursing homes by $1.57 billion within one year, according to nursing home industry officials (CQ HealthBeat, 12/5).
A bipartisan coalition of lawmakers in the Senate and House is trying to stop implementation of the rules (Sherman, Pittsburgh Post-Gazette, 12/6). In May, 82 House members asked Leavitt to not make the changes, and 44 senators in June made a similar request (CQ HealthBeat, 12/5).
On Tuesday, Reps. Allyson Schwartz (D-Pa.) and Shelley Moore Capito (R-W.Va.) said they hope to attach a provision that would block the administration's proposal to a tax bill that Congress likely will consider before adjourning this month (Pittsburgh Post-Gazette, 12/6).
Bruce Yarwood -- president and CEO of the American Health Care Association, which represents long-term care providers -- said potential vehicles for blocking the administration's proposal include tax legislation or a bill that would stop a scheduled reduction in Medicare payments to physicians. AHCA is considering a legal challenge if the proposed rules are implemented, Yarwood said.
Matt Salo, director of NGA's Health and Human Services Committee, said NGA has asked Office of Management and Budget Director Rob Portman to meet with the group to "talk about the impacts of what this might be before we move forward." Salo said the proposed rules also could impact Medicaid funding for rehabilitation systems, school-based health programs and other areas (CQ HealthBeat, 12/5).