Scully Warns Medicaid Program Needs Reform More Than Medicare
Medicaid "is arguably more in need of reform" than Medicare, CMS Administrator Thomas Scully told participants in a House Energy and Commerce Committee hearing on Wednesday, CongressDaily reports. However, the hearing indicates that fixing Medicaid "will be no easier, and potentially even more difficult, than reforming" Medicare, according to CongressDaily. Scully defended a proposal announced by the Bush administration earlier this year that would give states greater flexibility in their Medicaid programs (Rovner, CongressDaily, 10/8). Under the plan, states would receive a fixed amount of funding, rather than matching funds, for beneficiaries covered at their discretion. States no longer would have to apply for federal waivers to deviate from federal eligibility and benefits standards. In addition, states would only be required to maintain comprehensive Medicaid coverage for beneficiaries whose income levels are low enough that the federal government mandates that they be covered (California Healthline, 9/8). Democrats at the hearing defended the existing Medicaid program and "derided" the Bush proposal as an "effort to pass back to the states the responsibility for caring for the nation's sickest and most vulnerable individuals," CongressDaily reports. Rep. Lois Capps (D-Calif.) said, "The biggest challenge facing Medicaid is the Bush administration's effort to dismantle it." Rep. Henry Waxman (D-Calif.) added that Medicaid "has been uniquely successful ... serving patients who are hardest to reach, the cases that are the most difficult."
Scully also told committee members that many states have taken advantage of the "upper payment limit," a phrase used to describe a Medicaid financing loophole (CongressDaily, 10/8). Under the loophole, states pay city- or county-owned care facilities more than the actual costs of health services for Medicaid beneficiaries, receive additional matching funds from CMS and then require the facilities to return the extra state funds. The states sometimes pay the facilities a small fee for participating and use the extra federal funds for both health and nonhealth programs. CMS is gradually phasing out states' use of the loophole (California Healthline, 4/11/02). Scully said that of Medicaid's estimated $304 billion cost in fiscal year 2004, up to $25 billion will be from use of the loophole (CongressDaily, 10/8).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.