Medicaid and the BCA

The BCA did not require any reduction in federal Medicaid payments to states.  Like the federal government, many states are facing budget shortfalls, and simply cutting federal Medicaid payments to states without allowing states to “reform” their programs would have accomplished little more than shift federal obligations to the states.  (The BCA only addressed gross budget targets and did not address entitlement (Medicare or Medicaid) reform).

Medicaid - Possible Cuts

In the past, Congress reduced the federal cost of Medicaid by reducing the federal matching payments for state Medicaid expenditures (FMAP).  However, given the fiscal crises facing a number of states, it is unlikely that the Joint Committee will recommend this approach.  The Joint Committee will probably recommend giving states greater flexibility in designing their Medicaid programs.  In most instances, the Joint Committee will recommend reductions in recipient benefits and new limits on eligibility – and not provider payments.

The Joint Committee recommendations for Medicaid may include:

  • Allowing states to fully enroll a greater proportion of Medicaid recipients in managed care programs (e.g., certain disabled populations),
  • Limiting benefits to some Medicaid eligible groups (e.g., women with dependent children),
  • Increasing co-payments applicable to some benefits or for some recipients – particularly for Medicaid recipients not enrolled in managed care programs,
  • Establishing more limited benefits (e.g., severely limit the number of covered hospital days), or
  • Limiting benefits to Medicaid recipients using emergency room or other high cost services unnecessarily.

There is one area that the joint Committee may recommend cuts in Medicaid provider payments.  The Joint Committee may recommend changes to the Medicaid disproportionate share adjustment and the rules governing the imposition and use of provider taxes.

FY 2012 Appropriations Next Test for Congress

Completing the debt ceiling increase and deficit reduction legislation last Tuesday, the Senate recessed until Tuesday, September 6th and the House recessed until Wednesday, September 7th.   When Congress returns in September, members will again have to wrestle with their FY 2012 federal spending differences and will likely pass another CR when the current CR expires on September 30th.  Senate Appropriations Labor-HHS Subcommittee Chairman Tom Harkin said he does not expect his subcommittee to report the Labor-HHS-Education spending bill until December.  With the Senate having considered only one FY 2012 appropriations bill, the Military Construction/VA bill, a further delay of appropriations committee action could again force Congress to pass an omnibus spending bill before year-end.  It might be noted that the new debt ceiling law calls for scaling back discretionary spending from the current $1.050 trillion to $1.043 trillion in FY 2012 and for increasing the cap to $1.047 trillion in FY 2013.  These limits will supplant the inaction by the Senate to date on any FY 2012 budget resolution.

Fall Preview - Congress Has a Full Plate

Below are a few notable deadlines facing the Congress:

  • Supercommittee members are appointed by Aug. 16.
  • The continuing resolution expires Sept. 30.
  • Labor-HHS appropriations bills in both House and Senate by Oct. 1
  • Regular committees can recommend cuts to the supercommittee by Oct. 14.
  • Supercommittee report by Nov. 23.
  • Congressional votes on supercommittee report by Dec. 23.
  • Don Berwick’s appointment expires when Congress leaves at the end of the year.
  • SGR patch expires Dec. 31.

Lack of "Standing" Shoots Down PPACA Constitutional Challenge

The U.S. Court of Appeals for the Third Circuit has ruled that a challenge to the constitutionality of the PPACA’s individual mandate by a physician, his patient and another physicians group fails due to the inability of the plaintiffs to prove they have adequate standing to bring suit (New Jersey Physicians Inc. v. Obama, 3rd Cir., No. 10-4600, 8/3/11).  In dismissing the suit, the court said the plaintiffs did not show a realistic chance of “actual or imminent” injury from the mandate.  The court did not rule on the constitutional issue involving the mandate.

CCIIO Defends PPACA Rate Reviews

At a Senate HELP Committee hearing, the oversight director of the Center for Consumer Information and Insurance Oversight testified that, while the PPAA gives his agency the power to review health insurance rates, it is the agency’s objective to rely mainly on state review of health insurance rates for “unreasonableness.”  However, Senator Dianne Feinstein said that she favors the passage of her legislation giving HHS the authority to block premium increases in states which do not have rate approval authority (S. 137).  Keeping the Republican rhetoric up against the PPACA, Senator Mike Enzi touted his report finding that the law has caused health insurance carriers to stop selling child-only health plans in many states.

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