Could've been better, could've been worse.
Opinions among healthcare providers about the Medicaid spending reductions approved by Congress last week as part of its $2.6 trillion fiscal 2006 budget were varied and terse.
"We fought against there being any cuts, but we think these are somewhat palatable," said Tom Nickels, the American Hospital Association's senior vice president of federal relations, hours after Congress voted in favor of trimming $10 billion from Medicaid over four years beginning in 2007.
President Bush's original budget plan had called for a $14 billion reduction in budgeted Medicaid spending over five years, starting in fiscal 2006.
Last week's favorable votes on the budget plan -- it passed 214-211 in the House and 52-47 in the Senate -- set guidelines for lawmakers as they move forward in decisionmaking on taxes and spending for fiscal 2006, which begins Oct. 1. If the president signs the budget as expected, the tax and appropriations committees will then fill in the blanks as to how the various spending and saving goals, including the overall Medicaid cuts, will be achieved.
"This is a responsible budget that reins in spending to limits not seen in years," Bush said, adding that the budget will help keep on track his plan to cut the federal budget deficit in half by 2009.
Despite the reduction in budgeted Medicaid spending starting in fiscal 2007, actual spending will increase about 5% in fiscal 2006, according to the Congressional Budget Office. The CBO now expects the federal government will spend $191 billion on Medicaid in fiscal 2006, up from $182 billion in fiscal 2005 and from $177 billion in 2004.
Those who provide healthcare fear that any cuts, big or small, will set in motion a precedent that will create future funding problems for the industry.
The American Public Health Association's Georges Benjamin didn't mince words about the reductions.
"Congress has shown the dismally low priority it has placed on protecting the health of Americans," said Benjamin, executive director of the APHA, which represents more than 50,000 members from several dozen healthcare professions. "The thousands of public health professionals on the front lines battling these risks are being asked to do more work but with fewer resources."
And representing healthcare employees and patients, Service Employees International Union Secretary-Treasurer Anna Burger called the cuts arbitrary and distracting "from the real problems facing Medicaid and our healthcare system in general."
Looking ahead, the most intriguing aspect of the budget for healthcare providers is an agreement to form a commission to study funding of the Medicaid program for one year. That advisory commission is still being formed and speculation on Capitol Hill is that it may offer recommendations as early as September, with a final report expected in December 2006.
Task No. 1 for the commission will be to find ways to eliminate fraud and abuse in the state-reimbursement component of Medicaid.
Exactly who will sit on the commission was not clear at deadline. And with the Senate on a break this week, it may be several days before a roster is formally announced.
Sen. Gordon Smith (R-Ore.), a member of the Senate Finance Committee, has suggested that the Medicaid commission be formed by the Institute of Medicine. Other sources said HHS Secretary Mike Leavitt would most likely appoint members. Sen. Max Baucus of Montana, the ranking Democrat on the Senate Finance Committee, opposes that idea and has said a balanced committee might be difficult to achieve if a Bush administration appointee like Leavitt were in charge of naming the members.
There are many opinions on the topic.
"Any Medicaid commission must involve all the stakeholders, including healthcare providers, caregivers and consumer advocates," the SEIU's Burger said last week.
The AHA, which has pushed for changes in pharmacy payment methods and the laws affecting asset transfers by seniors as ways to save Medicaid money, said that it would offer its opinions to the commission, even if it is not formally represented. The hospital association's main focus will continue to be protecting providers from being harmed by Medicaid cuts.
"We're protecting against reductions in provider payments and also in services to the populations covered," Nickels said.
"As far as protecting the providers, we're already looking at the next phase," he said. "We've heard rumors about this commission that will study Medicaid. We don't know much about the commission or how it's developing, but we intend to learn more. We expect that it's going to be broad-based. We will continue pushing our ideas."
In Congress, the divide over how to achieve the Medicaid cuts is wide. Before the agreement was reached, Smith pushed members of his party to negotiate for smaller Medicaid cuts. He is said to be working with the White House and both parties within Congress to form the Medicaid commission.
Leavitt, a Republican who oversaw a major Medicaid overhaul as the governor of Utah, said he supported Congress' passing a proposal that "puts us on the path toward stabilizing and strengthening Medicaid so it continues to serve our most vulnerable citizens."
Leavitt said he is looking forward to working on the formation of a "fair, balanced and open commission to address the challenges facing Medicaid and to produce reforms the administration, Congress and governors can embrace."
Democrats were uniformly opposed to the cuts. Some even derided the future of the commission.
Rep. John Dingell (D-Mich.), ranking member of the House Energy and Commerce Committee, warned that the cuts "will increase the number of uninsured and create job losses in the healthcare sector."
Dingell also suggested that trimming Medicaid would hurt community health centers, which depend on the program.
Sen. Edward Kennedy (D-Mass) said he doubted the Medicaid Commission would be bipartisan.
"Just last month the Senate made it clear that cuts to the Medicaid program were unacceptable," Kennedy said in a written response to the vote, adding that the Senate had agreed previously to avoid cuts until the commission had time to examine the program and recommend reforms that were based on "sound policy."
"The bipartisan Medicaid commission has turned into a partisan commission that the administration can stack with members they know will recommend their predetermined cuts," Kennedy said. "Instead of a real examination of the Medicaid program so that we can modernize the program with needed reforms, we will have a commission whose agenda will be to recommend cuts."
Groups representing those who benefit from Medicaid showed concern over the budget agreement.
David Certner, the AARP's director of federal affairs, issued a statement saying his organization was "deeply concerned by the level of Medicaid reductions" included in the House and Senate agreement.
"Cuts of that magnitude are likely to result in additional cost-shifting onto a healthcare system that is already seriously compromised," he said.
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