Medicare Compliance & Reimbursement

The budget resolution approved, 215-212, by the House March 20 spares Medicare from cuts of more than $200 billion over 10 years that were contained in the House Budget Committee’s original version.

But the plan still cuts Medicaid by more than $90 billion, and mandates decreases of $2 billion in the State Children’s Health Insurance Program.

The bill now features “findings and purpose” to further “emphasize the congressional intent” that cuts are to come from “waste, fraud, and abuse,” according to a Budget Committee document.

The plan contains a $400 billion reserve for modernizing Medicare and installing a prescription- drug benefit. At press time, the Senate was still debating its budget resolution, which does not contain entitlement cuts mirroring the House’s.

The House budget does contain $12 billion in advance Medicaid funding for states that decide to turn their programs into block grants in return for greatly enhanced flexibility, as recently proposed by the Bush administration. The administration’s proposal is designed to be budget neutral over 10 years, so those states would have to accept lower federal funding in later years than they otherwise would have received.

With states facing their worst fiscal crisis since World War II, health benefits are on the chopping block across the country. The Center on Budget and Policy Priorities estimated March 20 that enacted or proposed Medicaid and SCHIP cuts in 22 states threaten coverage for 1.7 million people.

Nevertheless, momentum in Congress for temporarily increasing the rate at which the federal government matches state Medicaid spending waned with the advent of the administration’s proposal — budget neutral over 10 years and apparently bud get negative after that — and now the House proposes deep Medicaid cuts.