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Countdown to Medicaid Rule Update (May 25, 2008)

[clock] Cost Limit for Providers Operated by Units of Government and Provisions to Ensure the Integrity of Federal-State Financial Partnership.  (The U.S. Troop Readiness, Veteran's Care, Katrina Recovery and Iraq Accountability Appropriations Act imposed a one-year moratorium on the implementation of this rule that will expire May 25, 2008) Graduate Medical Education.  (The U.S. Troop Readiness, Veteran's Care, Katrina Recovery and Iraq Accountability Appropriations Act imposed a one-year moratorium on the implementation of this rule that will expire May 25, 2008)

CMS Medicaid Rulemaking: Congressional Response 

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In recent months the Centers for Medicare and Medicaid Services (CMS) have promulgated multiple rules which could potentially adversely affect state Medicaid programs. The rules which have prompted congressional legislative activity as well as litigation by several states are as follows:  

• Health Care-Related Taxes (Effective April 22, 2008)
• Elimination of Reimbursement Under Medicaid for School Administration Expenditures and Costs Related to Transportation of School-Age Children Between Home and School (Effective February 26, 2008.  A moratorium was imposed in the Medicare, Medicaid, and SCHIP Extension Act prohibiting Secretary Leavitt from taking any action to implement the provisions of the rule prior to June 30, 2008)
• Optional State Plan Case Management Services (Effective March 4, 2008.  Four states, including New Jersey, have filed suit to delay the implementation of this rule.)
• Clarification of Outpatient Clinic and Hospital Facility Services Definition and Upper Payment Limit 
• Coverage of Rehabilitative Services (Effective October 12, 2007.  A moratorium was imposed in the Medicare, Medicaid, and SCHIP Extension Act prohibiting Secretary Leavitt from taking any action to implement the provisions of the rule prior to June 30, 2008)

  In order to examine the rules in greater detail, congress directed the Congressional Research Service (CRS) to answer certain questions concerning the issues of focus in the rules. The following reports provide answers to these questions based on existing statute and regulation, and assuming that a moratorium goes into effect preventing implementation of the rules.

  CRS Memo - Response to Senate Finance Committee Staff Questions Regarding Certain Medicaid Regulation- March 2008 CRS Memo - Medicaid and Graduate Medical Education CRS Memo - Medicaid Financing-March 2008 CRS Memo - Medicaid Provider Taxes-March 2008 CRS Memo - Medicaid Regulation of Governmental Providers-March 2008 CRS Memo - Medicaid and Outpatient Hospital Services CRS Memo - Medicaid and Targeted Case Management CRS Memo - Medicaid Rehabilitative Services

  Congressional Legislation

  Congressional legislation has been introduced in both chambers of congress which would place a one-year moratorium on the implementation of these actions. On April 16th H.R. 5613, Protecting the Medicaid Safety Net Act of 2008, was reported out of the House Committee on Energy and Commerce. In response Health and Human Services (HHS) Secretary Michael O. Leavitt, has written a letter expressing the Bush Administration's opposition to this legislation and the assurance of a veto if presented to the president in it's current form. NCSL policy opposes regulatory actions which seek to make significant policy changes within the Medicaid program and circumvent the legislative process. For this reason and concerns over CMS's regulatory agenda over recent months, NCSL submitted a letter of support to committee members to encourage the adoption of this measure. 

  H.R. 5613 passed in the House April 23 in a roll call vote 349 yeas-62 nays, giving the measure a 2/3 majority affirmative vote.  An NCSL letter of support was sent to the Senate April 29th. The Administration has published a Statement of Administrative Policy strongly opposing the measure claiming it would hamper CMS in their efforts to protect the fiscal integrity of the Medicaid program and promising a veto. CBO Cost Estimate of H.R. 5613 

  In the Senate, Senator John D. Rockefeller (D-WV) has introduced a similar measure which also includes some fiscal relief to states during this economic downturn. S. 2819, the Economic Recovery Health Care Act of 2008, in addition to the regulatory moratorium would provide states with a temporary increase in their Medicaid federal medical assistance percentage (FMAP).

  Summaries of both measures are available on the NCSL Legislative Update.

  Litigation

  In response to the rules affecting Optional State Plan Case Management Services, four states, Maine, Maryland, New Jersey, and Oklahoma, have filed suite in federal court seeking injunctive and declaratory relief against the provisions of the rule. The states claim that implementation of this rule would jeopardize the health and safety of Medicaid beneficiaries, limit state flexibility to provide case management in the most effective manner, and result in a substantial reduction in federal funds for the provision of Medicaid case management services. The claim also contends that the administrative action is outside the authority of the secretary and does not express congressional intent as it was written in the Deficit Reduction Act of 2005, in which congress clarified the scope of targeted case management.

  Complaint for Injunctive and Declaratory Relief  

   

  Contacts:
  Joy Johnson Wilson, Federal Affairs Counsel and Senior Committee Director--Health Cmte,  (202) 624-8689
  Rachel Morgan RN, BSN, Senior Policy Specialist, State-Federal Affairs, (202) 624-3569