Public Policy Update: August 11, 2011
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August 11, 2011
Democratic and Republican Congressional leaders this week announced their 12 picks for the Joint Select Committee on Deficit Reduction, a panel tasked with finding over $1 trillion in government spending reductions or revenue increases to offset the amount of the new debt ceiling increase enacted this month.
The Joint Select Committee (also known as the “supercommittee”) is to be made up of 6 Democrats and 6 Republicans, evenly split between the House and the Senate. The Democratic members will include Senators Max Baucus (D-MT), John Kerry (D-MA), and Patty Murray (D-WA), along with Representatives James Clyburn, Xavier Becerra, and Chris Van Hollen. The Senate Republicans will include Patrick Toomey (R-PA), Jon Kyl (R-AZ), and Rob Portman (R-OH). On the House side, the Republican appointees will be Representatives Dave Camp, Jeb Hensarling, and Fred Upton (R-MI).
In the wake of the announcements, political analysts could not predict with certainty how the makeup of the panel might influence its ability to reach a compromise. The Joint Select Committee may recommend any type of deficit-reduction measure it chooses, including cuts to Medicaid and other health programs. Some observers have expressed hope that the bipartisan panel can reach a breakthrough compromise on overhauling the tax code and reforming entitlement programs such as Medicaid, Medicare, and Social Security – but it is far from clear whether the group will be able to agree on such sweeping changes.
The Joint Select Committee must have its first meeting by Sept. 16, 2011 and must approve a plan with at least $1.5 trillion in savings by Nov. 23. The plan would then be fast-tracked through Congress with no amendments permitted, with a final vote occurring by Dec. 23. Should Congress or the Committee fail to meet these deadlines or the target spending reductions, automatic spending cuts (also known as “sequestration”) would be triggered, beginning after a period of 12 months, in January 2013. The spending cuts would be spread equally between defense and non-defense programs and must equate to a total of $1.2 trillion, including the amount (if any) of the savings achieved under the Joint Select Committee’s plan.
According to a recent report from the Center on Budget and Policy Priorities, should automatics cuts be triggered, they would result in about a 9 percent annual cut in non-defense programs, along with roughly a 9 percent cut in defense programs. Although Medicaid would be protected from these automatic cuts and Medicare would be subject to a maximum of 2% reductions in provider cuts only, many other health and human services programs could see reductions, including some programs authorized and funded in the Affordable Care Act. For more information on how the Joint Select Committee’s negotiations could affect Medicaid and Medicare, see this FAQ from Kaiser Health News.
The National Council will continue to closely follow the work of the Joint Select Committee as it begins negotiations. Stay tuned to the Public Policy Update for the most recent news and information.
The National Council has joined nine other national organizations in submitting an friend-of-the-court brief to the Supreme Court in the case Douglas v. Independent Living Center of Southern California. At issue in the Douglas case is whether states’ cuts to provider payment under Medicaid violate federal laws requiring states to ensure beneficiaries’ access to care – and whether providers have legal standing to bring lawsuits against states over this issue.
Our groups’ brief argues that reductions in state Medicaid payment rates affect beneficiaries’ access to care and that providers should have standing to bring action against states when such access is threatened:
“As Medicaid providers, members of our organizations are acutely aware of the difficulties Medicaid recipients face when seeking primary, secondary, and tertiary care. Despite a continued commitment to treating the Medicaid population, increased Medicaid volume at reduced rates threatens our organizations’ members’ long-term financial viability and ability to adequately serve Medicaid recipients.
“Dramatic, indiscriminate cuts of the type at issue in these cases pose a serious threat to an already overtaxed safety net for our most vulnerable citizens, including millions of seniors, children, pregnant women and people with disabilities… Low reimbursement rates have caused large numbers of doctors to withdraw from the program, with adverse consequences for the entire safety net. It has, for example, become increasingly difficult for Medicaid beneficiaries to find a physician, especially a specialist. Medicaid beneficiaries have difficulty obtaining specialty consultations at an alarming rate, roughly three times more often than insured patients. And, as access to physicians becomes more difficult, patients turn to hospital emergency departments, an inefficient use of resources that only adds additional pressure to an already over-taxed system.”
Click here to read the full brief. The Supreme Court will hear the Douglas case after its new session begins in October.
The Centers for Medicare and Medicaid Services this week announced the availability of funding for a new emergency psychiatric healthcare demonstration project, authorized under the Affordable Care Act. The demonstration is designed to provide states with enhanced flexibility and resources to care for Medicaid beneficiaries with mental illnesses.
The demonstration project will provide $75 million in federal matching funds to states for Medicaid payments made to private psychiatric hospitals, with 17 or more beds, for inpatient emergency psychiatric care to Medicaid recipients aged 21 to 64. The newly announced demonstration project is designed to explore whether it is feasible and cost effective for Medicaid to cover emergency psychiatric services provided in private psychiatric hospitals.
CMS is now accepting applications to participate in this demonstration from interested State Medicaid Directors. More information, including the solicitation, application and fact sheet can be found online.
The Obama Administration this week announced the launch of a new framework to assist American Indian and Alaska Native communities in improving the prevention, intervention, and treatment of substance use disorders. The new federal approach was captured in a Memorandum of Agreement between the Departments of the Interior, Health and Human Services, and the Attorney General’s office.
The Memorandum describes how the Office of Indian Alcohol and Substance Abuse within the Substance Abuse and Mental Health Services Administration (SAMHSA) will coordinate tribal substance abuse programs across the federal government, with a special emphasis on promoting programs geared toward reaching youth and offering alternatives to incarceration. An interdepartmental coordinating council will guide the overall direction of the new federal effort to improve its work with tribal communities, beginning with determining the scope of the problem; identifying and assessing national, state, tribal, and local alcohol and substance abuse programs and resources; and creating standards for programs.
On August 5, the Centers for Medicare and Medicaid Services issued a letter to State Medicaid Directors outlining how the maintenance of effort (MOE) provisions of the Affordable Care Act apply to home- and community-based services under Medicaid. The letter and the accompanying Questions and Answers suggest ways that current law offers states “flexibility” in managing their section 1915(c) home and community-based care services (HCBS) waivers.
CMS has come under fire from some disability groups for suggesting mechanisms that states may use to reduce benefits or eligibility without violating health reform’s MOE requirements. In its letter, CMS cautions that “States must also carefully consider the implications of such changes on their obligations to ensure the health and welfare of individuals served within the waiver programs, as well as their community integration obligations under the Americans with Disabilities Act (ADA) and the right of individuals to receive public benefits in the most integrated setting appropriate to their needs.”
The CMS letter is the most recent in a series of guidance to states clarifying their options for modifying Medicaid benefits and eligibility without running afoul of MOE requirements. To see CMS’ previous guidance on Medicaid and MOE, click here.
The National Council has signed on to a letter by 72 organizations to the Senate Finance Committee asking Chairman Max Baucus (D-MT) and Ranking Member Orrin Hatch (R-UT) for their support and leadership in preserving Supplemental Security Income (SSI) for children with disabilities. The SSI program has come under fire in recent years following some negative media attention implying that the program may be serving children who do not actually have a disability, particularly among children with a diagnosis of Attention-Deficit/Hyperactivity Disorder. Our groups’ letter highlights the potentially disabling nature of mental illness in children, including ADHD, describes the importance of the SSI benefit in helping families offset the costs of having a child with a severe disability, and urges the Committee to oppose any attempts to deny thousands of families the SSI benefits that help them care for their children with severe mental disorders.
The National Council has also recently signed on to a letter to HHS by 18 national organizations regarding the impact on children of benefit and cost-sharing cuts in Utah's proposed Section 1115 waiver. Utah’s demonstration proposal seeks to waive the requirement that the state provide Early and Periodic Screening, Diagnosis, and Treatment (EPSDT), the important Medicaid benefit for children. Utah proposes to limit the services available to children to a prioritized list whenever growth in per capita Medicaid spending exceeds growth in the state’s general fund expenditures. Our groups’ letter expresses our strong concerns about the negative impact this proposal would have on children and urges HHS Secretary Kathleen Sebelius to reject these portions of the waiver. We encourage HHS to approve the demonstration project only if it adequately protects children’s access to medically necessary care, prevents their families from incurring unaffordable health care costs, and maintains key beneficiary protections like the freedom to maintain or change health plans.
A new online and social media campaign, The Campaign for Modern Medicines, is seeking to build support for a reauthorization of the Prescription Drug User Fee Act (PDUFA). Under current law, pharmaceutical companies seeking approval for a product from the Food and Drug Administration must pay the FDA a user fee. The FDA uses these fees to support its work on the review of drug applications and determinations of drug safety. The law that authorizes these user fees is set to expire in 2012, unless Congress enacts legislation to reauthorize it.
With the FDA evaluating more drugs annually than ever before, PDUFA user fees have become increasingly important to ensuring that the FDA has the workforce capacity to evaluate new applications in a timely and transparent way. PDUFA has been reauthorized every five years since its beginnings in 1992. The Campaign for Modern Medicines is urging Congress to use PDUFA reauthorization as an opportunity to streamline the review process, expand the transparency, and increase the accountability of the process.
