Apr-05

President Bush kicked off the annual budget process on Capitol Hill on February 7 with the release of his FY 2006 spending plan to Congress. While not binding, the $2.57 trillion proposal reflects the President’s priorities for the coming year and provides a starting point for congressional deliberations over spending on government programs. Bush proposes cuts in numerous domestic programs and eliminates other health programs altogether, while boosting funds for defense.

PROPOSED MEDICAID CUTS FACE OPPOSITION

The president’s proposed $60 billion reduction in Medicaid spending over 10 years drew immediate fire from lawmakers on both sides of the aisle, the nation’s governors, and advocacy groups, presaging a protracted debate over how to overhaul the $330 billion program. Following release of the FY 2006 budget, Sens. Gordon Smith (R-OR) and Jeff Bingaman (D-NM) introduced legislation (S. 338) that would create a bipartisan commission to thoroughly review the Medicaid program before any changes are considered. The commission would have one year to hold public hearings, conduct its evaluations and deliberations, and issue its report and recommendations. Nineteen senators back the legislation, including nine Republicans. On the House side, Rep. Heather Wilson’s (NM-1) companion measure, H.R. 985, has 57 cosponsors. Medicaid reform topped the agenda of the winter meeting of the National Governors Association (NGA). The governors expressed their commitment to pressing the administration for more flexibility for cost-curbing experiments and pledged to fight proposed cuts to the Medicaid program. NGA released “Medicaid in 2005: Principles & Proposals for Reform.” The paper looks at the issues, problems, and challenges facing Medicaid in 2005, the outlook for the future, and it offers principles and options for reform.

In response to the President’s recommendations, a coalition of 22 health care groups, including AGS, called on Congress to reject any Medicaid proposal that “will put our most vulnerable citizens in jeopardy.” “We share the goal of ensuring the long-term financial stability of Medicaid, but we believe the Medicaid reductions as outlined in the President’s budget proposal may undermine what we believe is our shared interest—to ensure that our health care safety net is reliable, secure, and provides quality care to our nation’s poor and elderly,” the letter stated. Other groups signing the letter included the American Academy of Family Physicians, the American College of Physicians, and the American Hospital Association.

MEDICAL LIABILITY BILLS REINTRODUCED

Eager for another try at passing medical liability legislation, lawmakers in the House and Senate last month reintroduced the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2005, which would impose a $250,000 cap on noneconomic damages. The HEALTH Act also caps punitive damages at twice economic damages, includes joint liability and collateral source improvements, and would place limits on attorney fees. Introduced February 10 in the Senate by Judd Gregg (R-NH) and John Ensign (R-NV), S. 354 includes an expert witness provision to ensure that relevant medical experts serve as trial witnesses instead of so-called “professional witnesses” who are used to further abuse the system, according to a release. Sens. Jon Kyl (R-AZ), Larry Craig (R-ID), and James Inhofe (R-OK) have cosponsored the bill. “Medical liability reform is not a Republican or Democrat issue, or even a doctor versus lawyer issue. It is a patient issue,” said Ensign. “With the medical crisis occurring in Nevada and many states around the nation, our opportunity to enact true reform is here. Comprehensive medical liability reform is the right prescription right now.” Rep. Christopher Cox (R-CA) introduced the House companion to S. 354 on February 2. H.R. 534 has 129 cosponsors. Similar legislation passed the House last year. However, Democrats continue to pose a threat to passage in the Senate, where they have successfully blocked votes on the bill in the past.

MedPAC RECOMMENDS NO UPDATES FOR SNFs AND HOME HEALTH

In its annual report to Congress, the Medicare Payment Advisory Commission (MedPAC) recommended that lawmakers eliminate the update to payment rates for skilled nursing facility (SNF) services in FY 2006. The evidence generally indicates that Medicare beneficiaries continue to have access to SNF services, the Commission said. It projects the Medicare margin for freestanding SNFs will be 13% in FY 2005. MedPAC also recommended that home health services receive no update next year. The projected Medicare margin for home health services in 2005 is 12.1%, “suggesting that Medicare’s payments more than cover the costs of caring for Medicare home health users,” the Commission said. MedPAC found evidence of good access to care for most beneficiaries, though some beneficiaries continue to experience some difficulties. It also said the quality of care has improved.