WASHINGTON WIRE
August 17, 2007
Issue 143
CMS Proposes to Reduce Medicaid Rehab Spending
Medicare Part D Premiums to Increase in 2008
House Members Seek SSA Clarification of Medicare’s Role in Long-Term Care
Congress in Recess until September 4, 2007
Top Story
CMS Proposes to Reduce Medicaid Rehab Spending
In the August 13th Federal Register, the Centers for Medicare and Medicaid Services (CMS) published a proposed rule that would reduce federal Medicaid spending on services provided under the program's rehabilitative services option.
The proposed rule would reduce spending by $2.2 billion over five years by eliminating federal financial participation (FFP) for "habilitative" services claimed under the rehabilitative services option, as well as implementing an "intrinsic element" standard that withholds FFP for services furnished by other federal, state or local programs.
CMS appears to be targeting the rehabilitative services option because of the growth in spending over the last several years under this option. CMS describes the optional benefit as a "catch-all" for many state Medicaid programs.
Disability advocates have strongly opposed prior similar efforts by CMS to restrict spending under this option, stating that the spending increases for community rehabilitative services is a result of improved access to home and community-based living for individuals with disabilities. The Bush Administration proposed similar language during negotiations over the Deficit Reduction Act of 2005. However, Congress ultimately did not include such changes in the final legislation and the President's annual budget requests have stated the agency's intention to make these changes through the regulatory process in subsequent years.
The rule also proposes to require that a written rehabilitation plan be prepared for each beneficiary and rehabilitative services providers meet qualification standards as outlined in state Medicaid plans. Comments to CMS on the proposed rule are due 60 days from publication.
Also this week, the Kaiser Commission on Medicaid and the Uninsured released a report on the Medicaid rehabilitative services option which can be viewed at http://kff.org/medicaid/upload/7682.pdf.
Health Care News
Medicare Part D Premiums to Increase in 2008
The Centers for Medicare and Medicaid Services (CMS) announced this week that monthly Medicare Part D premiums will increase approximately $3 in 2008 to reach a $25 average.
CMS stated that the average monthly premiums for the Part D prescription drug program continue to be far below the original $41 estimated when the program was originally enacted in 2003. The agency stated that the premium increase is largely due to the normalization of the program's risk-adjusted model which results in higher payments to Part D plans enrolling more costly participants.
In related news, Families USA issued a news release this week stating that approximately 1.6 million low-income beneficiaries will join or be reassigned to a new Part D drug plan by January 1st. The release states that such changes are due to a combination of subsidy decreases and premium increases, resulting in beneficiaries no longer having a sufficient subsidy to cover the premiums of their existing plans.
House Members Seek SSA Clarification of Medicare's Role in Long-Term Care
Over forty House Members recently sent a letter to the Social Security Administration (SSA) requesting clarification of Medicare long-term care coverage in SSA publications.
The letter, sent to SSA Commissioner Michael Astrue, states that Americans do not have a clear perception of the costs of long-term care as well as what aspects of long-term care are covered by public programs. The letter requests that Commissioner Astrue clarify in the annual Social Security Statement, sent to over 143 million people, that Medicare does not generally pay for long-term care. According to the letter, a section of the annual statement states the Medicare helps pay for nursing care and the Members thought such a statement to be misleading.
The Department of Health and Human Services (HHS) is currently engaged in a long-term care planning campaign and recently stated its intentions to inform targeted households of the limited role Medicare will play in financing beneficiaries' long-term care.
Upcoming Events
Congress in Recess until September 4, 2007
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