The new regulation jeopardizes community-based health services, including screening, diagnostic and dental services for children, as well as lab and ambulance services.
In line with the current administration's plans to issue, or relax, many economic, environmental, health and safety rules before they leave office on Jan. 20, this impact on the poor is a political favor now for a surge in costs later as illness rates rise and insurance payments fail to meet cost.
Keep in mind that members of Congress did little to address this sweeping change, so hope they will re-visit the issue in January.
November 8, 2008
New U.S. Rule Pares Outpatient Medicaid Services
By ROBERT PEAR
WASHINGTON — In the first of an expected avalanche of post-election regulations, the Bush administration on Friday narrowed the scope of services that can be provided to poor people under Medicaid’s outpatient hospital benefit.
Public hospitals and state officials immediately protested the action, saying it would reduce Medicaid payments to many hospitals at a time of growing need.
The new rule conflicts with efforts by Congressional leaders and governors to increase federal aid to the states for Medicaid as part of a new economic action plan.
President-elect Barack Obama has endorsed those efforts. At a news conference on Friday, he said that legislation to stimulate the economy should include “assistance to state and local governments” so they would not have to lay off workers or increase taxes.
In a notice published Friday in the Federal Register, the Bush administration said it had to clarify the definition of outpatient hospital services because the current ambiguity had allowed states to claim excessive payments.
“This rule represents a new initiative to preserve the fiscal integrity of the Medicaid program,” the notice said.
But John W. Bluford III, the president of Truman Medical Centers in Kansas City, Mo., said: “This is a disaster for safety-net institutions like ours. The change in the outpatient rule will mean a $5 million hit to us. Medicaid accounts for about 55 percent of our business.”
Alan D. Aviles, the president of the New York City Health and Hospitals Corporation, the largest municipal health care system in the country, said: “The new rule forces us to consider reducing some outpatient services like dental and vision care. State and local government cannot pick up these costs. If anything, we expect to see additional cuts at the state level.”
Carol H. Steckel, the commissioner of the Alabama Medicaid Agency, said the rule would reduce federal payments for outpatient services at two large children’s hospitals, in Birmingham and Mobile.
Richard J. Pollack, the executive vice president of the American Hospital Association, said these concerns were valid.
“The new regulation,” Mr. Pollack said, “will jeopardize important community-based services, including screening, diagnostic and dental services for children, as well as lab and ambulance services.”
Herb B. Kuhn, the deputy administrator of the Centers for Medicare and Medicaid Services, defended the rule.
“We are not trying to deny services,” Mr. Kuhn said. “We want to pay for them more accurately and appropriately. Payments for some services were way higher than they should be.”
The rule narrows the definition of outpatient hospital services to exclude those that could be provided and covered outside a hospital.
In May, the White House said it wanted to avoid the rush of “midnight regulations” that had occurred at the end of other administrations. But Bush administration officials said this week that they still intended to issue, or relax, many economic, environmental, health and safety rules before they leave office on Jan. 20.
Medicaid, financed jointly by the federal government and the states, provides health insurance to more than 50 million low-income people. Services can often be billed at a higher rate if they are performed in the outpatient department of a hospital rather than in a doctor’s office or a free-standing clinic. Hospitals generally have higher overhead costs.
Matt D. Salo, a health policy specialist at the National Governors Association, said, “The new rule is consistent with the administration’s effort to squeeze, shrink and flatten Medicaid spending.”
In a recent letter, the governors urged Congress to increase the federal share of Medicaid for at least two years. With state tax revenues plunging, many governors are considering cuts in Medicaid and other programs. Such cuts, they say, would further depress economic activity.
Ann Clemency Kohler, the executive director of the National Association of State Medicaid Directors, said: “The new rule is a pretty sweeping change from longtime Medicaid policy. Since the beginning of the program, states have been allowed to define hospital outpatient services. We have to question why the rule is being issued now, three days after the election, with a new administration coming in.”
The rule was proposed in September 2007. It takes effect on Dec. 8, six weeks before Mr. Bush leaves office.
Ms. Kohler said the rule would cut “money going to the states, to safety net providers, at a time when states are really being stressed.”
“More and more people are coming onto Medicaid,” she said. “People are losing their jobs and running out of unemployment benefits. Some employers can no longer afford to provide health insurance to their workers.”
In the last 18 months, Congress has imposed moratoriums on six other rules that would have cut Medicaid payments. But the administration says Congress did not block the rule issued on Friday.
Larry S. Gage, the president of the National Association of Public Hospitals, said, “We will urge Congress to extend the moratorium to this rule, and we will ask the Obama administration to withdraw it.”
Copyright 2008 The New York Times Company
And in other news we find Big Pharma (one great group of very substantial contributions to 'W') being cited for prolific Medicaid billing fraud.
Kansas is suing to recover millions in over payment -
According to the lawsuit, the Medicaid program spent more $160 million on meds last year. And the suit alleges the price for a drug paid by the state, based on a fraudulently-reported Average Wholesale Price and other price indicators, often bears no relationship to the true price and can exceed 100 percent to 200 percent above the actual price.
One example cited - Dey reported an AWP of $44.10 for Ipratropium Bromide, yet the AG claims the drugmaker sold the same drug to retail pharmacists for $8.35 - a 355 percent difference. And Glaxo reported an AWP of $128.24 for Zofran, but charged $22.61- a 450 difference.
Perhaps is the current administration would move to prosecute Big Pharma for the egregious activity the recovery would save Medicaid from current cuts. The FDA might be cleaned up a little at the same time, and don't they need an overhaul!
WARNING: I once blew the whistle on perpetrators of Medicare fraud involving Washington state. Instead of doing an accurate investigation, Mike Gregoire, husband of the the current governor and formerly with the Medicaid Fraud unit in the AGs office (at a time when his wife was AG), he feel into lock step with the typical bureaucratic cover-up: Protect the System First.
Fortunately my contacts at the Region X HHS OIG office was glad to take my data. DOJ was prosecuting the company I tried to report to Gregoire for insurance fraud in ten states.
The FEDS won this case and got a $372 million settlement.
Former state legislator Dave Schmidt did do a proper investigation, finding egregious errors by the state. He assisted me in regaining my status. DOH still is covering up. Mike and some DOH cronies continued the fraud by "loosing" legal documents and ignoring fact. Funny though that the AAG assigned to represent the state came out in favor of my facts and me. Former gov Gary Locke ignored the facts too and went so far as to cover up for DOH lies, at a time when he agreed to a request by a US Congressman to investigate. Locke refused to look at my eveidence. Locke and Mike's wife are law school grads and should know very well about due process and equal protection. I can't say for sure, but they went very far to attack the messenger here. And lost some recovery money as well. For shame.
Fraud has many faces.
