Sens. Schumer, Clinton Call on Bush Administration To Reject Proposed Rule That Would Reduce Medicaid Funding

Sens. Hillary Rodham Clinton (D-N.Y.) and Charles Schumer (D-N.Y.) on Wednesday in a letter to President Bush said implementation of a proposed Medicaid regulation should be suspended because, if it is signed into law, the resulting loss of more than $350 million in funding would "devastate" essential medical care for more than 400,000 patients in New York state, CQ HealthBeat reports (Carey, CQ HealthBeat, 9/10). The proposed rule narrows the scope of outpatient services covered by Medicaid, which would lead to lower payments to health clinics and hospital outpatient services, according to CongressDaily (CongressDaily, 9/11).

Bush in June signed into law a supplemental war appropriations bill (HR 2642) with a provision that will delay for one year six new Medicaid regulations proposed by his administration. The six regulations could take effect as early as April 2009 without future congressional action (Kaiser Daily Health Policy Report, 7/1). However, the outpatient regulation was not included in the supplemental spending bill. White House officials have said the new rules are intended to stop federal payment for services that Medicaid should not cover and eliminate abuses in the system.

Clinton and Schumer in the letter asked Bush to delay implementation of the rule as it would "have an unacceptable impact on care and treatment for the low-income families that are in the greatest need of specialized health care services" (CQ HealthBeat, 9/10). Schumer said the rule would limit the amount of Medicaid funding the state receives for such services to the amount Medicare provides for similar services (Blain, New York Daily News, 9/11). Clinton and Schumer wrote, "We fail to understand why Medicare reimbursement was arbitrarily chosen to replace a payment system that has allowed many of these clinics to serve the needs of the most vulnerable Americans," adding that the services that would be affected are not covered by Medicare and do not meet the needs of Medicare beneficiaries (CQ HealthBeat, 9/10).

CMS spokesperson Jeff Nelligan said, "This rule enhances the integrity of the Medicaid program, ensuring that the services provided [to] our Medicaid recipients are effective and that taxpayers are receiving the full value of the funds spent on Medicaid" (CongressDaily, 9/11). Nelligan said that because the regulatory definition of outpatient hospital services is "so broad, there is a high possibility of overlap between outpatient hospital services and other covered benefits," which leads to Medicaid overpayments (CQ HealthBeat, 9/10).