Much of this week’s major health policy news stems directly from what Congress did not do last week before leaving for the Memorial Day recess.

For instance, the decision by House Democratic leaders to advance a jobs bill that did not contain enhanced Medicaid funds for states has triggered a wave of state-level reaction. CQ reported that the executive director of the National Association of State Budget Officers said states are “in fiscal peril” and that “governors face a ‘cliff’ when the extra $87 billion provided for Medicaid in the 2009 stimulus package runs out Dec. 31.” Congress initially provided these stimulus funds to help states make health care accessible to the millions of low-income people impacted by the recession. Now the NASBO and the National Governors’ Association are pressing lawmakers to provide the additional amounts – at a cost of $23 billion – through next June. One of the reasons this issue is causing such concern: “Under the health care overhaul law, states can no longer increase premiums or otherwise change eligibility criteria for Medicaid. That means their options for cutting costs are limited to things like reducing provider reimbursements, increasing co-payments or dropping coverage for optical and dental services” (Ethridge, 6/3).

States are bracing for the budgetary hit they will face if Congress does not provide these funds. The Los Angeles Times estimated the amount for California could tally as much as $2 billion — money that Gov. Arnold Schwarzenegger and state lawmakers “intended to use to help bring California out of the red” (Simon and Halper, 6/3). The Washington Post reported that “Virginia, like 20-plus other states, adopted a budget that included some drastic cuts to health and human resources,” but lawmakers didn’t expect to them to become a reality because they expected Congress to extend the enhanced Medicaid funding (Kumar, 5/31). And, for Nevada, the cost of stripping the Medicaid funding provision from the jobs bill could cost the state as much as $88 million, according to The Associated Press/Las Vegas Sun. “Gov. Jim Gibbons and state lawmakers included that funding in the budget it passed during February’s special session. Cutting the funding would reduce the federal Medicaid match from nearly 64 percent to just 50 percent, leaving the state to pay for the other half” (6/2).

For complete coverage, read KHN’s Daily Health Policy Report on June 3.

The fallout from the failure of Congress to postpone cuts in Medicare payments to physicians — another provision attached to the jobs bill — also continued to make news. CongressDaily reported that even though the cut officially took effect June 1, the Centers for Medicare and Medicaid Services “ordered a temporary freeze on doctor payments” to allow Congress to complete action when lawmakers return from their break. Meanwhile, the American Medical Association unveiled “a multimillion-dollar print, television and radio ad campaign targeted at the Senate, which left for the Memorial Day recess without passing legislation to avoid a scheduled 21 percent cut in Medicare physician payments.” The organization also “released a survey of over 9,000 physicians, finding that nearly 60 percent of them considered opting out of Medicare in response to this year’s two previous short-term delays to the 21 percent payment cut” (McCarthy, 6/3).

“Before Congress left town, the House of Representatives voted to postpone the pay cut,” Reuters reported. “But the Medicare pay issue has gotten caught up in Senate wrangling over budget deficits and the cost of an economic package that would extend jobless benefits and tax breaks aimed at stimulating the economy” (Smith, 6/3). And CongressDaily further explored how the “doc fix” became tangled up in deficit worries. “A senior Democratic aide said the deficit has become the overarching concern in many districts, more so than things like state Medicaid assistance and COBRA health insurance subsidies, both of which were dropped in the final bargaining. But in other cases, members voted ‘no’ largely because Medicaid and COBRA funds got the axe” (Cohn, 6/3). Finally, Roll Call reported how Democratic infighting over the Medicare “fix” and these other provisions stripped from the jobs bill have brought Senate and House leaders to a “dramatic low” in their relations (Dennis and Pierce, 6/1).

More detailed coverage of the “doc fix’ and COBRA extension can be found in KHN’s Daily Report on June 1, June 2 and June 3.

Meanwhile, a front page story Thursday in The New York Times made waves in the health policy world by examining the work of the Dartmouth Atlas of Health Care. “In selling the health care overhaul to Congress, the Obama administration cited a once obscure research group at Dartmouth College to claim that it could not only cut billions in wasteful health care spending but make people healthier by doing so.  But while the research compiled in [the Atlas] has been widely interpreted as showing the country’s best and worst care,” the researchers themselves acknowledged that their work “mainly shows the varying costs of care in the government’s Medicare program. Measures of the quality of care are not part of the formula. … The mistaken belief that the Dartmouth research proves that cheaper care is better care is widespread.” The lead Dartmouth researchers vigorously defended their work. And “[m]any other health researchers say Dartmouth should be praised for highlighting the tremendous differences in how patients are treated and for emphasizing that patients often fail to benefit from additional care” (Abelson and Harris, 6/2). Kaiser Health News reported that the critique also triggered significant activity among health policy bloggers (Steadman, 6/4).

On the same day, the issue of Medicare’s geographic differences also was prominent as HHS Secretary Kathleen Sebelius made an appearance at the Mayo Clinic in Rochester, Minn., according to Minnesota Public Radio. “[A]n issue hanging over Sebelius’ visit is whether the new health care law does anything to equalize the amount of money Medicare pays to hospitals in different parts of the country. … As Congress debated the health care overhaul, Mayo Clinic voiced concerns that Medicare’s payment system was driving up the cost of health care because hospitals and clinics in some parts of the U.S. were performing many more tests” (Stawicki, 6/3). 

KHN’s June 3 Daily Report has detailed news summaries regarding the Dartmouth research and Sebelius’ Mayo Clinic visit.