Thomas Scully
Administrator
Centers for Medicare and Medicaid Services
(formerly the Health Care Financing Administration)
Thomas Scully:
Before I came to this agency I was the biggest HCFA hater of all time. The agency was insular and needed a shake up badly, even though it has a great staff. One of the first things that Secretary Thompson did was to change the name to the Centers for Medicare and Medicaid Services, and that has helped a lot. But Medicare and Medicaid patients still don't have a clue what these programs are all about. One major initiative is giving good information to seniors about Medicare to help them with the choices they need to make. We're now financing an $80 million education campaign. CMS has bought full-page ads on nursing home consumer information in eight states because we have real quality of care problems in many of our nursing homes. There is a core federal and state responsibility to put out good data on hospital quality.
Another problem we have addressed is communication with states that often found difficulty in getting straightforward answers to their questions. At CMS headquarters in Baltimore, we have assigned one contact person for each region and two for every state. We have begun Open Door Policy Forums to open up the process and let anyone get their questions answered. We also hired two Wall Street analysts to write reports on the financial health of various industries we finance. We did one on the managed care industry, which showed that private plans participating in the Medicare + Choice market are getting killed. We did one on nursing homes, which showed that they are climbing out of their hole and that Medicare has been propping up that industry, while most are getting killed on Medicaid. The most recent report on hospitals found some are doing great, and some are doing poorly.
Let me discuss some political concerns. Regarding pharmaceutical coverage under Medicare, the one thing clear to me is that the Medicare Catastrophic Coverage Act of 1987 should never have been repealed; it offered a good drug benefit, and it's a shame we don't have it. The Bush Administration is totally committed to getting a drug bill passed by the Congress this year.
RBRVS - [Resource Based Relative Value Scale, Medicare's physician payment formula] - may get blown up this year. Physicians are facing a -5.6% update. That is because they were overpaid $66 billion in 2000 and 2001 and now that overpayment is being recaptured. It will be -4.5% next year. I am certain Congress will fix this. There will be a Medicare bill this year if only because of the problems with physician payments.
On access, the conversation has been much lower key. The President included $89 billion for refundable tax credits, while the Kennedy-Hatch approach wants the SCHIP model. Everybody wants progress this year. We could lower the number of uninsured by about 5 million. We yell a lot about this every year but nothing happens.
The Medicaid program is much more screwed up than Medicare. We have 50 sets of rules and financing. It covers most long-term care. And there is almost no national conversation about it. The program has a totally irrational and unfair funding base. There is no connection between the statute and the actual match rate states receive. Mississippi is in crisis and gets a match rate of 78%; Alabama, because of upper payment limits, gets 92%. What's fair? Why should I give a better deal to Illinois than to Indiana? These are much bigger structural problems than Medicare.
On waivers, the key issue is budget neutrality and OMB, especially if Congress appropriates no new money. I am a huge advocate of PACE programs that combine Medicare and Medicaid funding to keep seniors out of nursing homes. Assisted living is wonderful, but most people can't afford it. We don't have the ability to expand drug coverage or other benefits.
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