AMA delegates condemn proposed Medicaid cuts

Doctors particularly oppose a proposal to raise premiums and co-pays for very poor children.

By David Glendinning — Posted Nov. 28, 2005

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Dallas -- To some physicians, the fight Congress is waging over the Medicaid program presents the ideal chance for doctors to demonstrate that they are truly interested in protecting their patients, not their pocketbooks.

The American Medical Association House of Delegates approved a resolution at the Interim Meeting earlier this month condemning provisions in a U.S. House budget reconciliation bill that would raise cost sharing on most Medicaid beneficiaries. The legislation, which at press time House leadership was still attempting to pass, would cut nearly $12 billion from the program over five years in part by increasing out-of-pocket costs for low-income and disabled beneficiaries.

Of particular offense to physicians are provisions that would raise premiums and co-payments on extremely poor children who are at or below the federal poverty level. The American Academy of Pediatrics introduced the resolution, which was adopted by delegates without one voice of dissent.

"We believe these proposed cuts in the U.S. House are unconscionable," said Ron Levine, MD, former North Carolina state health director. "Anyone who believes that they will save money not looking after poor children is very, very mistaken."

But while no disagreement on this issue surfaced among the delegates, the directive to take action was accompanied by written and voiced concerns that the AMA has not assigned a high enough legislative priority to opposing the Medicaid reductions. The absence of a 2006 Medicare physician payment increase in the House budget bill -- as well as a proposed 1% raise coupled with a Medicare pay-for-performance provision in the Senate-passed version -- prompted a public response from the Association that did not extend to the Medicaid issue, the pediatrics academy said.

"The American Medical Association Board of Trustees developed a position at this meeting delineating strong support for a physician Medicare payment update [and] opposition to pay-for-performance as proposed, while remaining silent on the Medicaid aspect of the proposed cuts," the resolution states.

Remaining engaged

But despite this perception, the board remains engaged on Medicaid access issues even as it tackles pressing Medicare payment concerns and misgivings over pay-for-performance proposals, said AMA Trustee J. James Rohack, MD.

"We apologize if there was an impression that we are not in support of what the American Academy of Pediatrics was attempting," he said.

Dr. Rohack said the Association had made it clear to lawmakers that it prefers the Senate Medicaid package, which would reduce net spending on the program by roughly $4.3 billion over five years, largely by limiting payments to drug companies, pharmacists and state governments. Upon House passage of the deficit reduction bill, congressional negotiators will attempt to iron out the differences between both measures, during which time the AMA and other stakeholders will try to influence the outcome.

The House leadership strategy already was causing some problems among lawmakers before the bill even hit the floor. Republican grumbling over what some consider overly deep proposed cuts to Medicaid and other entitlement programs prompted GOP leaders to scuttle their first attempt to move toward final passage of the budget legislation.

Some physicians at the Interim Meeting noted with irony the inclusion of Hurricane Katrina relief in the House legislation, saying that bill supporters would pay for such increases by taking Medicaid funding away from other poor children and families. Others suggested that targeting young, healthy children for savings would bring about few monetary gains in the long run and instead would sacrifice the chance to keep them healthy in the future.

And doctors themselves also would be hurt by the House legislation, according to several physicians. A move toward greater beneficiary cost sharing often has a way of trickling down to practices that are struggling to make ends meet as it is, said Richard Pan, MD, a Sacramento, Calif., pediatrician and a delegate for the American Academy of Pediatrics.

"The other issue that we're very concerned about is that particularly with co-pays, that really becomes a back-door physician reimbursement cut," he said. "The nature of the co-pay is that it is both difficult to collect and is probably going to cost you more to collect than it would be to just write it off."

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Medicaid beneficiary squeeze

The House put together a $54 billion deficit reduction package that includes nearly $12 billion in net Medicaid cuts over five years. Physicians worry that several of the biggest reductions could harm millions of beneficiaries' access to care. The following are some of the largest proposed cuts that would directly impact Medicaid patients:

Action Estimated
federal savings
States could pare back benefits
for most types of beneficiaries
$3.94 billion
States could impose new premiums
and co-payments on most types
of beneficiaries
$2.25 billion
Asset transfers that people use to
become Medicaid eligible would
become more difficult
$1.49 billion
Qualifying for long-term care
coverage would become tougher for
beneficiaries with substantial home equity
$580 million
States could charge higher co-payments
for nonpreferred drugs
$260 million

Source: Congressional Budget Office

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