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VGM Update - April 25, 2005 |
Apr 25 2005 4:21PM |
MEDICAID: Governors Circulate Reform Draft Statement
Governors seeking to create a "united position" on Medicaid have been circulating a 12-page
working draft statement of possible changes, including increasing deductibles and making asset
transfers more difficult, the AP/Long Island Newsday reports. According to aides, the draft
statement, which could be taken to Congress and the Bush administration, includes a proposal that
would make it more difficult for seniors to transfer their assets to family members or others to
qualify for nursing home care under Medicaid. Another proposal would allow the state to investigate
more thoroughly a beneficiary's finances and seek repayment for government-provided care. In
addition, the draft includes a proposal to establish or increase deductibles and co-payments for
beneficiaries. Governors hope such a proposal would force beneficiaries to contribute to the cost of
the program and discourage abuse. The proposals also would try to discourage businesses from
eliminating retiree health benefits or otherwise shifting employees to Medicaid, by establishing
incentives such as tax credits (Tanner, AP/Long Island Newsday, 4/25). Governors also said they
would like to create costs savings by making the program more efficient through electronic medical
records and state purchasing pools (AP/Kansas City Star, 4/25).
Virginia Gov. Mark Warner (D), chair of the National Governors Association, and several other
governors declined to give further details on the draft statement. However, Warner said that the
proposed changes would be balanced with other policies that would make paying for long-term care
more affordable, such as giving beneficiaries tax credits for long-term care insurance. Arkansas Gov.
Mike Huckabee (R) said the difficulty with Medicaid reform is that changes would affect each state
differently (AP/Long Island Newsday, 4/25). Governors said they have reached no agreements on
draft statement proposals, and "it's unclear whether a majority" will be able to reach a consensus,
according to those familiar with the draft statement, the AP/Kansas City Star reports (AP/Kansas
City Star, 4/25).
In related news, it "appears" that Sen. Gordon Smith (R-Ore.) has reached an agreement with the
Bush administration to create a commission that would study Medicaid reform in exchange for
making some program spending reductions, CQ HealthBeat reports. A GOP source said Medicaid
spending reduction likely would be less than the $12 billion proposed by Sen. Judd Gregg (R-N.H.).
While "budget writers hope that a Medicaid deal will catalyze an overall [budget] agreement ... it
remains unclear" whether lawmakers will be able to find $40 billion to $45 billion in savings in other
programs, CQ HealthBeat reports (CQ HealthBeat, 4/22).
Los Angeles Times Looks at Cost-Containment Proposals
The Los Angeles Times on Sunday examined the different proposals states are considering to control
spending on Medicaid, which is "often a state's single biggest budget item." According to the Times,
"Every state has frozen or is trying to cut" Medicaid payments to physicians. In addition, more than
one dozen states are looking to reduce the number of beneficiaries or reduce benefits. A proposal by
Tennessee Gov. Phil Bredesen (D) would eliminate 320,000 adults from the state's Medicaid
managed care program. Several states are also considering more sweeping reforms, such as a
proposal by Missouri Gov. Matt Blunt (R) that would eliminate the Medicaid program within three
years (Simon, Los Angeles Times, 4/24).
April 25, 2005
Broadcast Coverage
C-SPAN's "Washington Journal" on Monday included interviews with Rebecca Adams, a
Congressional Quarterly reporter; Matt Salo, director of health legislation for the National
Governors Association; and CMS Administrator Mark McClellan, about Medicaid ("Washington
Journal," C-SPAN, 4/25). The complete program will be available online in RealPlayer and
Windows Media after the broadcast.
MEDICARE: New Policy Will Limit Access to Appeal Hearings
A new federal policy scheduled to take effect in July will "make it significantly more difficult" for
Medicare beneficiaries to appeal claim denials in person before an administrative law judge, the New
York Times reports. The 2003 Medicare law will shift the responsibility for such appeals from the
Social Security Administration to HHS. In the past, judges have held hearings on Medicare appeals
at more than 140 SSA offices nationwide, but under the new policy HHS plans to place judges in
only four locations -- Cleveland; Miami; Irvine, Calif.; and Arlington, VA. In addition, judges will
hold most hearings on Medicare appeals with videoconference equipment or by telephone, CMS
officials said. The videoconference equipment will allow Medicare beneficiaries, judges and
witnesses in different parts of the nation to communicate over secure networks. HHS will encrypt
video signals to ensure the privacy of medical information. Medicare beneficiaries will have the
ability to send and receive documents related to the hearings by fax machine. According to the
Times, HHS officials are "still working out details," which include the installation of
videoconference links and the hiring of 50 additional judges. Under the new policy, Medicare
beneficiaries who request to appear in person before a judge must prove that "special or
extraordinary circumstances exist," and beneficiaries who make such requests will lose the right to
receive a decision within 90 days. The new policy also requires judges to adhere to the Medicare law
and regulations and "give substantial deference" to manuals and guidelines issued by CMS officials.
The new policy comes as Bush administration officials are "predicting an increase in the volume of
cases," with the new Medicare prescription drug benefit expected to prompt a larger number of
appeals, the Times reports.
Senate Finance Committee Chair Chuck Grassley (R-Iowa) and ranking member Sen. Max Baucus
(D-Mont.) -- who were among the principal authors of the 2003 Medicare law -- have raised
concerns about the number of locations for hearings on Medicare appeals under the new policy.
They said that the law requires distribution of judges "throughout the United States." Center for
Medicare Advocacy Director Judith Stein said, "The videoconferences are one of many changes that
will reduce the beneficiaries' ability to get fair, favorable decisions. Sick, old and disabled people
can be much more effective in person because the judge can see their illnesses and infirmities -- how
they walk, how they get up from a chair, how their hands shake with tremors." She added that under
the new policy "it will be easier for Medicare officials to participate in hearings and to influence
decisions, often to the detriment of beneficiaries." Ronald Bernoski, president of the Association of
Administrative Law Judges, said, "Video teleconferences will undermine the judges' ability to assess
the credibility and demeanor of witnesses. And it could reduce the beneficiaries' confidence in the
proceedings. The intrinsic value of a Medicare hearing is that citizens have an opportunity to sit
down in front of a high-ranking official and tell their story to someone who listens carefully and
makes a reasoned decision."
Nancy Thompson, HHS director of transition, declined to comment on the new policy. HHS officials
have said that videoconference equipment could allow judges to "complete more cases" within the
90-day deadline, as they would not have to travel to remote locations. HHS also said that the
placement of judges across the nation was "not economically or administratively feasible." In a letter
to Congress, HHS said, "Having fewer offices is more cost-effective in terms of management,
technology and training." HHS Secretary Mike Leavitt said, "Access to hearings for Medicare
beneficiaries will be as good as or better than" access under the current policy, adding, "Video
teleconferences will allow hearings to be provided more timely, with vastly more access points than
Social Security currently provides through its offices" (Pear, New York Times, 4/24).
Rx Drug Benefit Could Disrupt Care
In related news, the Boston Globe on Monday examined concerns from advocates for Medicare
beneficiaries that the new prescription drug benefit will disrupt care for some beneficiaries.
According to advocates, new Medicare prescription drug plans might not cover certain medications
currently taken by some beneficiaries. The plans must cover medications for every condition, but
"they are expected to narrow the choice of medicines to cut costs," according to the Globe.
Advocates maintain that the plans could endanger nursing home residents with mental disabilities
who cannot "advocate for themselves" and Medicare beneficiaries who take multiple medications
"and are particularly vulnerable to side effects," the Globe reports. CMS Deputy Administrator
Leslie Norwalk said, "We're trying to get nursing home residents competitive prices. But we don't
want to turn everything upside down. We may have a bump or two along the road, but we are trying
to anticipate the problems" (Dembner, Boston Globe, 4/25).
John E. Gallagher, Vice President of Government Relations 800.642.6065 ext. 6503
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