Obamacare's Silver Lining Playbook for Medicaid

  • by: |
  • 02/26/2013
The rationale for shoving 18 million people into Medicaid was to give the appearance of a generous health plan at a price that kept Obamacare under the $1 trillion "cap."   At the time the administration told liberal advocacy groups that it would hold states accountable to preserving existing coverage even as it added more peope to Medicaid.   And the administration also refused to give states flexibility in using Medicaid dollars as Mitch Daniels did in Indiana to prevent a run on coverage and exodus of doctors.   Now that the Supreme Court ruled states can opt out of the Medicaid expansion, the administration has sent out a flare telling states it can cut payments to doctors and hospitals to save money.   Will that reduce access and increase waiting times?  Of course.  But Obamacare has always been about making more Americans depending upon government for their health care and nothing else.  The attitude is: let's get everyone 'covered' and we will ratchet down costs through price controls..  

This quote from an unnamed administrtation source  in the New York Times says it all:  “There is no general mandate under Medicaid to reimburse providers for all or substantially all of their costs,” the administration said.    Substantially.  As in ten cents on the dollar.  Maybe.   Anyone out there willing to increase their business by charging 75-90 percent less?  

States Can Cut Back on Medicaid Payments, Administration Says
Published: February 25, 2013

WASHINGTON — The Obama administration said Monday that states could cut Medicaid payments to many doctors and other health care providers to hold down costs in the program, which insures 60 million low-income people and will soon cover many more under the new health care law.
Enlarge This Image

Manuel Balce Ceneta/Associated Press
Gov. Jerry Brown of California, center, on Monday during a National Governors Association meeting in Washington.
The administration’s position, set forth in a federal appeals court in California, has broad national implications as it comes as the White House is trying to persuade states to expand Medicaid as part of the new law.

The statement of federal policy infuriated health care providers and advocates for low-income people. But it may encourage wavering Republican governors to go along with the expansion because it gives them a tool to help control costs.

Byron J. Gross, a lawyer at the National Health Law Program, an advocacy group for low-income people, said: “The federal government is trying to bend over backward to show flexibility and accommodate states as much as it can. California is an example of that.”

In a brief filed with the United States Court of Appeals for the Ninth Circuit, in San Francisco, federal officials defended a decision by California to cut Medicaid payments to many providers by 10 percent.

Kathleen Sebelius, the secretary of health and human services, approved the cuts in October 2011 after finding that beneficiaries would still have “adequate access” to the wide range of services covered by Medicaid.

The Obama administration urged judges to uphold those cuts, which are being challenged by patients, doctors, dentists, hospitals, pharmacists and other health care providers in California.

AARP, the lobby for older Americans, joined the health law advocacy group and more than a dozen consumer groups in opposing the cuts, which they said would reduce access to care for millions of current and future beneficiaries.

In an interview, Gov. Jerry Brown of California, a Democrat, said the Medicaid cuts were essential to his efforts to dig the state out of a budget hole.

“California has a great record of providing more benefits, expanding to more people, doing more of everything,” said Mr. Brown, who was here for the winter meeting of the National Governors Association. “But I believe in balancing our budget, living within our means.”

“We like the president’s commitment to extend health care to as many Americans as possible, and we can be powerful partners,” Mr. Brown said. “But we need more authority than we now have. I want to emphasize that — more authority than we have now to manage the Affordable Care Act and the expansion of Medicaid.”

Medicaid is one of the fastest-growing items in state budgets. Cutting payment rates saves money for states and for the federal government, which will pay most of the costs for people who become eligible for Medicaid under the new law.

Health care providers said California’s payment rates were inadequate even before the cuts. They pointed to a federal study that said, “California stands out because of its very low Medicaid payment levels.”

In an interview, Dr. Paul R. Phinney, president of the California Medical Association, a plaintiff in one of the court cases, said: “Two-thirds of doctors in California cannot afford to participate in Medicaid because the rates are so low. The problem will only get worse if rates are cut as we move more and more people into Medicaid.”

The cuts were supposed to take effect in 2011 but have been held up, pending the outcome of litigation.

Health care providers said California was cutting Medicaid payment rates for “purely budgetary reasons.”

In court papers, the Obama administration said, “It is entirely appropriate for a state to review its Medicaid plan to determine whether it can continue to satisfy its statutory obligations at lower payment rates.” Indeed, the administration said, states should conduct such reviews “to avoid the perpetuation of payment rates that are unnecessarily high.”

Federal law says Medicaid rates must be “sufficient to enlist enough providers” so that Medicaid beneficiaries have access to care at least to the same extent as the general population in the same geographic area.

The Obama administration said California officials had agreed to monitor beneficiaries’ access to care and to “take prompt action if any problems are indicated.”

Moreover, the administration said, Congress gave states “wide discretion” to set Medicaid rates, and courts should not second-guess decisions by Secretary Sebelius on the adequacy of rates.

“There is no general mandate under Medicaid to reimburse providers for all or substantially all of their costs,” the administration said.

Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

Blog Roll

Alliance for Patient Access Alternative Health Practice
Better Health
Biotech Blog
CA Medicine man
Cafe Pharma
Campaign for Modern Medicines
Carlat Psychiatry Blog
Clinical Psychology and Psychiatry: A Closer Look
Conservative's Forum
Club For Growth
Diabetes Mine
Disruptive Women
Doctors For Patient Care
Dr. Gov
Drug Channels
DTC Perspectives
Envisioning 2.0
FDA Law Blog
Fierce Pharma
Fresh Air Fund
Furious Seasons
Gel Health News
Hands Off My Health
Health Business Blog
Health Care BS
Health Care for All
Healthy Skepticism
Hooked: Ethics, Medicine, and Pharma
Hugh Hewitt
In the Pipeline
In Vivo
Internet Drug News
Jaz'd Healthcare
Jaz'd Pharmaceutical Industry
Jim Edwards' NRx
Kaus Files
Laffer Health Care Report
Little Green Footballs
Med Buzz
Media Research Center
More than Medicine
National Review
Neuroethics & Law
Nurses For Reform
Nurses For Reform Blog
Opinion Journal
Orange Book
Peter Rost
Pharm Aid
Pharma Blog Review
Pharma Blogsphere
Pharma Marketing Blog
Pharmacology Corner
Pharmaceutical Business Review
Piper Report
Prescription for a Cure
Public Plan Facts
Real Clear Politics
Shark Report
Shearlings Got Plowed
Taking Back America
Terra Sigillata
The Cycle
The Catalyst
The Lonely Conservative
Town Hall
Washington Monthly
World of DTC Marketing
WSJ Health Blog