Hearing Focuses on Medicaid
Reform; Medicaid DSH
October 10, 2003 - The AAMC, American Hospital Association,
National Association of Public Hospitals, Federation of American
Hospitals, and National Association of Children's Hospitals
submitted a joint
statement for the record at an Oct. 8 House Energy and
Commerce Health Subcommittee
hearing entitled "Challenges Facing the Medicaid
Program in the 21st Century." The joint statement reiterated
the vital role of safety net hospitals and their dependence
on adequate reimbursement. It also called for preservation
of Medicaid Disproportionate Share Hospital (DSH) funding
and urged the Committee to actively include the provider community
in future reform initiatives.
Among the topics discussed at the hearing were the Administration's
Medicaid reform plan, current financing mechanisms, dual eligibles,
and Medicaid DSH. Centers for Medicare and Medicaid Service
(CMS) Administrator Tom Scully restated what he considered
the strengths of the Administration's Medicaid reform proposal
released earlier this year [see Washington
Highlights, Feb. 7].
Mr. Scully also praised the efforts of states to preserve
coverage via innovative waivers. According to Mr. Scully,
recent waivers have permitted continued coverage of nearly
2 million beneficiaries during a period in which states face
increasingly limited fiscal resources. He continued to criticize
state Medicaid "financing schemes" and warned that
CMS will not approve future state waivers unless the states
begin documenting how federal matching funds are routed and
spent.
Rep. Diana DeGette (D-Colo.) raised concerns that the Administration's
reform proposal would effectively eliminate the Medicaid DSH
program. She asked how the Administration could reduce/eliminate
DSH allotments as the number of uninsured Americans continued
to rise. Mr. Scully responded that the states are "gaming"
the DSH system and directing the funding to areas other than
safety net hospitals. When Rep. DeGette explained that DSH
funding was a vital supplement to declining Medicaid payments,
Mr. Scully conceded, then agreed to work with the Committee
to restructure the DSH system to assure that funds would go
to deserving hospitals, not other state initiatives.
Maryland State Representative Adelaide Eckardt outlined 5
reform strategies that the federal government should focus
on. She asked for continued program flexibility, beneficiary-targeted
initiatives that encouraged wellness and prevention, tax deductions
for purchasing long-term care insurance, and more enforcement
against spend-down schemes.
Kaiser Family Foundation Executive Vice President for Health
Policy Diane Rowland, Sc.D., also testified, calling the Medicaid
program "the glue that fills in the cracks of the nation's
healthcare system." Dr. Rowland reported that without
it, the number of uninsured individuals in 2002 would have
increased by 4 million (vs. the reported 2.4 million increase).
Dr. Rowland added that, despite common perceptions, Medicaid
spending increases currently fall below spending increases
in the private market. She said low provider reimbursement
has kept spending levels in check, but warned that any additional
cuts in reimbursement would likely trigger a provider and
managed care exodus from the Medicaid market.
Information
Christiane Mitchell, Senior Legislative Affairs Manager
AAMC Government Relations
cmitchell@aamc.org
(202) 828-0526
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