Obama administration is putting Medicaid system at risk

Under the Affordable Care Act, the low-income Medicaid program will see its greatest growth since 1965 when President Lyndon Johnson signed it, along with Medicare, into law in former President Harry Truman’s Missouri library.

While the Obama Administration’s Medicaid expansion has been debated — with Republican governors starting to relent in embracing it — an administration attack on Medicaid payments has gone unnoticed. It bodes ill for the expansion’s promise for millions of uninsured Americans and their prospective health care providers.

On February 25 before the Ninth Circuit Court of Appeals, the administration renewed arguing that states can arbitrarily cut Medicaid payments, without legal recourse for beneficiaries. “There is no general mandate under Medicaid to reimburse providers for all or substantially all of their costs,” argued the administration.

This is a rather amazing abdication given that the federal government is responsible for paying no less than half the cost of the Medicaid program, and also enforces rigorous care standards in settings like skilled nursing facilities.

In a December 2012 decision, the Ninth Circuit wrote, “The idea that a state should consider providers’ costs prior to reducing reimbursement rates seems at first blush to be logical.” It then ignored logic by stating the only thing that matters is if enough providers take Medicaid. In effect, this was a freedom-of-contract argument that ignored the Hobson’s choice where Medicaid is the only game in town. Think about state-paid in-home care, for example.

The decision, and the administration’s position, also ignores a statutory requirement that Medicaid payments be consistent with “quality of care.”

Are we to believe actual care costs bear no relationship to quality? Home care hours were arbitrarily slashed 10 percent in the last budget. What if they were slashed 50 percent? Would the administration still rubber-stamp cuts?

It is as if the administration is protesting sequestration in Washington, D.C. while secretly encouraging it in states. Not only is the administration’s position alarming to advocates for those with disabilities, including AARP, it will give pause to those thinking about providing new Medicaid care.

Having run a statewide long-term care association, I have seen the future the administration’s inconsistency portends, and it’s not pretty. Over two-thirds of nursing home patients have their skilled care paid for by Medicaid. Perhaps another one-tenth of patients are utilizing Medicare benefits, which are limited to post-hospitalization stays and only pay in full for 20 days. Nursing home care is about as close to a single-payer system as we have.

And it is not a system that pays actual costs. Social services are first on the chopping block, as they are “discretionary” compared to, say, funding education — a state constitutional duty. Thus, outgoing Gov. Chris Gregoire proposed delaying, at least until July 2015, updating nursing home Medicaid reimbursement — which is still tied to 2007 costs. Most costs are wages. By January 2014, costs will also include mandated worker health care. Adding Medicare insult to Medicaid injury, sequestration brought a 2 percent Medicare cut.

Government expectations do not go away with its cuts. A Shoreline nursing home was recently cited for “Immediate Jeopardy” for a mobile patient who was smoking off-premises when a state surveyor, also smoking, saw him. Now, for one patient, the non-smoking facility was forced to create an on-site “Designated Smoking Area” — replete with an emergency fire blanket the patient refuses to use.

For decades, the only means of redressing state harms to Medicaid beneficiaries has been federal courts. Why should the poor, and those who care for them at a loss, be disentitled to this remedy? What about equal justice under the law?

Last year, the Supreme Court narrowly avoided ruling Medicaid beneficiaries and providers have no legal standing to complain about payment – instead returning a case to the Ninth Circuit for more consideration. The decision, however, was 5-4 — four justices, led by Chief Justice John Roberts, were ready to rob President Johnson’s 1965 accomplishment of its vitality.

Why is President Obama still inviting them to? And what is health care reform’s future in Washington, and elsewhere, if they agree?

Brendan Williams is a former state legislator

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