Scully Calls Iowa Officials’ Proposed Lawsuit over Medicare Reimbursement Rates ‘Ridiculous’
CMS Administrator Tom Scully said yesterday that Iowa state officials' plan to legally challenge federal Medicare reimbursement formulas is "ridiculous" and "absurdly irresponsible," the Des Moines Register reports (Leys, Des Moines Register, 8/21). On Monday, Gov. Tom Vilsack (D) and Attorney General Tom Miller (D) said that they would first send a letter to HHS Secretary Tommy Thompson and then file a lawsuit to try to force the government to calculate states' Medicare payments "equivalently." The rates under dispute stem from the Balanced Budget Act of 1997, which set payments to states based in part on data such as local wages and costs. The Medicare per-beneficiary reimbursement rate in Iowa is $3,053 per year - the lowest of any state - compared to the national average of $5,490 per year. The Iowa lawsuit would focus on language in federal laws regulating how HMOs contract with Medicare to provide coverage for beneficiaries in different states. The guidelines hold that Medicare must reimburse HMOs with "actuarial equivalence" among all states (California Healthline, 8/20). Yesterday, Scully said Vilsack and Miller are "kidding themselves" in proposing the suit, adding, "[I]f they actually claim to have good legal guidance, they're crazy." Scully said that he and Thompson are sympathetic to smaller states' reimbursement concerns and have taken steps to address them, and he also contended that states should be pressuring Congress to change Medicare regulations rather than seeking reform through the court system. Vilsack said that Scully's reaction was a "typical bureaucrat's response," adding, "I'm disappointed that he would give that kind of knee-jerk reaction" (Des Moines Register, 8/21).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.