Protecting the Medicaid Safety Net Act
On April 23, 2008, the House passed the Protecting the Medicaid Safety Net Act, H.R. 5613. This bill places a moratorium until March 2009 on seven damaging Administration-imposed Medicaid regulations. If these regulations were allowed to go into place, they would reverse longstanding Medicaid policies and eliminate federal payments for a variety of critical Medicaid functions. As a result, they would jeopardize needed services and protections for millions of vulnerable beneficiaries, as well as support for critical safety net institutions in states that are financially strapped. This legislation was signed into law on June 30, 2008.
The bill also establishes an independent review of these regulations prior to the expiration of the moratorium next year. In addition, it provides $25 million to HHS each year, beginning in FY 2009, to fight fraud and abuse in the Medicaid program.
Specifically, by imposing a moratorium, this bill would protect states, beneficiaries, and providers from the Medicaid cuts caused by the following seven rules:
Restrictions on payment for Medicaid coverage of rehabilitation services (proposed rule issued August 13, 2007; current moratorium through June 30, 2008). This proposed rule would severely curtail the ability of people with chronic and temporary disabilities to receive rehabilitation services now covered under Medicaid. It would particularly hurt those with developmental disabilities, mental illness, and people who, without access to rehabilitation services, could see their health deteriorate. It would also jeopardize the ability of people with disabilities to live independently in the community because access to the services that help them stay at home would no longer be available.
Restrictions on payment for Medicaid coverage of case management services (interim final rule issued December 4, 2007, effective March 3, 2009; no current moratorium). Medicaid’s current case management benefit is intended to help people with disabilities, chronic illnesses, or special needs to gain access to the full spectrum of health care and support services by arranging for and coordinating care. States may provide case management for adults, but must provide it for children. This rule would hurt efforts to integrate school-based medical services for children with disabilities, because states would no longer be able to receive funding for important care coordination activities. It would fragment services for children in foster care by prohibiting child welfare agencies from being paid for providing Medicaid services. It would also roll back federal efforts to transition people out of nursing homes by limiting the assistance available to people with disabilities to secure needed services in a community setting.
Elimination of payment for school-based transportation and outreach (final rule issued December 28, 2007; current moratorium through June 30, 2008). Under current practice, schools may be reimbursed by Medicaid for extremely limited, specialized medical transportation for Medicaid children to get to and from school. This rule would prohibit all Medicaid funding of this specialized medical transportation. In addition, under current practice, schools may be reimbursed for their administrative activities associated with the Medicaid program, including outreach, assistance with enrollment, and referring children to Medicaid providers and Medicaid services. The rule would also prohibit all Medicaid funding for these administrative activities by schools.
Redefinition of allowable provider taxes used to raise state funding for Medicaid (final rule issued February 22, 2008, effective April 22, 2008; no current moratorium). Under current law, states are allowed to tax providers as a way to help pay for Medicaid expenses. These taxes are supported by providers because the taxes are used to improve provider payment rates and improve quality. This rule significantly redefines “allowable” provider taxes. This dramatic change would put current, long-standing state programs in jeopardy and jeopardize state funding for Medicaid programs. This would result in states reducing services, cutting provider payments, or eliminating coverage.
Restrictions on payment for Medicaid hospital outpatient benefits (proposed rule issued September 28, 2007; no current moratorium). This proposed rule would significantly restrict the types of hospital outpatient services Medicaid can cover. For example, Medicaid would be prohibited from covering certain services such as dental and vision services commonly provided to Medicaid patients through outpatient clinics. The rule would also restrict the ability of states to cover services in outpatient clinics that are separate from hospitals – a common way states have served people in communities and reduced emergency room use.
Elimination of payment for graduate medical education in Medicaid (proposed rule issued May 23, 2007; current moratorium through May 25, 2008). This proposed rule would prohibit Medicaid payment for graduate medical education programs that train providers so they have the experience and skills necessary to meet the unique needs of Medicaid beneficiaries, particularly individuals with disabilities. Eliminating Medicaid funding for graduate medical education would reduce the number of providers with the skills and training to care for the special needs of Medicaid beneficiaries.
Restrictions on payments to safety net institutions (intergovernmental transfers) (final rule issued May 29, 2007; current moratorium through May 25, 2008). This rule places strict limits on Medicaid payments to critical safety net institutions such as hospitals and nursing homes that serve Medicaid beneficiaries. If these payments are reduced or eliminated, the critical access to care and services provided by these institutions may be in jeopardy.