Healthcare Business News

Hospital associations oppose easing of Medicaid maintenance-of-effort rules

By Jessica Zigmond
Posted: March 1, 2011 - 4:45 pm ET

Relaxing maintenance-of-effort provisions will move many low-income Americans out of Medicaid programs and increase the number of the uninsured population, several hospital associations cautioned in a letter Tuesday to HHS Secretary Kathleen Sebelius.

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The American Hospital Association, the Association of Medical Colleges, the Catholic Health Association, the Federation of American Hospitals, the National Association of Children's Hospitals, the National Association of Public Hospitals and Health Systems, and VHA emphasized their strong support for the Medicaid maintenance-of-effort, or MOE, requirement included in the American Recovery and Reinvestment Act in 2009 and extended last year in the Patient Protection and Affordable Care Act.

The provision gives states increased Medicaid funding if states agree not to reduce the eligibility requirements below their February 2009 levels. But weak state budgets forced the nation's governors to write Sebelius last month to ask that the federal government waive cuts in funding to states that reduce their Medicaid rolls in order to close their budget gaps between now and 2013.

According to the hospital groups, removing people from the Medicaid rolls neither prevents them from getting sick nor deters them from seeking proper care.

“Further, it shifts the burden of their care from states and the federal government largely onto the nation's hospitals,” the letter said. “Hospitals currently provide some $40 billion in uncompensated care and the loss of the Medicaid MOE will only increase the burden on providers.”

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