Abandoning Accountability in Medicaid

via: Heritage

Yesterday’s New York Times editorial, “Financing Health Care Reform,” outlines the need to “make the hard choices” including “cutting and reallocating hundreds of billions of dollars from projected spending on Medicare and Medicaid …”. However, judging by last week’s action by the Obama Administration to rescind three Medicaid regulations, the Times’ admonition is likely to fall upon deaf ears.

Last week, the Department of Health and Human Services announced it would rescind three regulations that were designed to place needed fiscal and programmatic accountability in Medicaid. As Medicaid now spends more than $350 billion annually, the savings from these regulations were modest.

According to the HHS press release, “[b]y rescinding these rules, we can expect children will continue to receive services through their schools, beneficiaries will be able to access all available case management resources to help them better manage their health care, and outpatient hospital and clinic services can continue to be covered in the most efficient manner.”

Those familiar with the actual Medicaid rules understand that these explanations are off the mark. The rule dealing with schools did not affect medical services, including rehabilitative services such as physical therapy or speech therapy to children on Medicaid. The rule addressed administrative costs of running schools that were being charged to Medicaid. Are school buses needed to take kids to school? Of course. Do schools need to be built? Absolutely. But should those responsibilities become the job of Medicaid?

The case management rule was designed to bring greater accountability and professionalization to the important job of case management. HHS says the former rule would “limit state flexibility.” True. That is because audit after audit showed how states could pass off costs of non-Medicaid activities onto Medicaid. The lack of accountability, which HHS now calls “flexibility” allowed states the perfect defense—if there are no rules, then those pesky audits by the Inspector General get dismissed. You can be sure that there will be future studies, as there have been in the past, by the Government Accountability Office (GAO) taking the Centers for Medicare and Medicaid Services to task for its failure to protect program integrity.

The third rule was rescinded, according to the press release, so that “outpatient hospital and clinic services can continue to be covered in the most efficient manner.” This is doublespeak at its finest. Most efficient for whom? Not the taxpayers who are once again at risk of being charged inflated prices. Not Medicaid beneficiaries who are supposed to have freedom of choice of covered services and are not be steered to providers who can benefit by having ancillary services counted as outpatient hospital costs.

Medicaid is big business that experts from GAO and the Congressional Budget Office have warned is out of control and unsustainable. The rescission of these rules is yet another example, of how good public policy succumbs to raw politics masked by the regulatory apparatus largely unnoticed by the average citizen. If Congress and the Administration will not or cannot make the “easy” choices, how can they be counted on to make the hard choices?


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