[Congressional Record Volume 149, Number 34 (Tuesday, March 4, 2003)]
[Extensions of Remarks]
[Page E356]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


[[Page E356]]
            MASSHEALTH COALITION OPPOSES BUSH MEDICAID PLAN

                                 ______
                                 

                           HON. BARNEY FRANK

                            of massachusetts

                    in the house of representatives

                         Tuesday, March 4, 2003

  Mr. FRANK of Massachusetts. Mr. Speaker, in our efforts to do our 
jobs, we are aided by private organizations, which share our commitment 
to the public, and have first-hand experience with how the policies we 
enact work in practice. Three of the organizations to which I am 
indebted for their advice and their important public roles are the 
Massachusetts Hospital Association, the Home and Health Care 
Association of Massachusetts, and the Massachusetts Extended Care 
Federation. They are together, extremely important institutions both 
for the services they provide and for the economic role they play. I 
was therefore particularly impressed when they sent along a copy of the 
letter they sent on February 20 to Massachusetts Governor Mitt Romney, 
in which these three responsible and important organizations say with 
regard to the President's Medicare reform proposal, ``our coalition 
firmly opposes the President's proposed plan since it would have long 
term detrimental effects on MassHealth recipients and providers.'' As 
their letter concludes, ``the nearly 1 million Massachusetts residents 
covered by MassHealth deserve federal action to address the current 
crisis that does not put additional financial pressure on our state, 
nor diminish the guarantee of coverage for our most vulnerable 
patients.'' Mr. Speaker, I have for some time thought that the 
President's policy of fighting two wars and financing that with three 
tax cuts inevitably means serious social harm in our country in many 
areas. This letter from these three organizations, which play such an 
important role in the health and welfare of our citizens, underlines 
that point and I ask that the letter be printed here.

         Massachusetts Hospital Association, Home Health Care 
           Association of Massachusetts, Inc.,
                                                February 20, 2003.
     His Excellency Mitt Romney,
     Office of the Governor, State House,
     Boston, MA.
       Dear Governor Romney: On behalf of the Massachusetts 
     institutions dedicated to patient care, we must voice our 
     grave concerns with President Bush's Medicaid reform 
     proposal, which the National Governors Association (NGA) 
     plans to discuss next week. Though the plan is promoted by 
     the Administration as an answer to states' current financial 
     problems, we urge caution in embracing this or similar future 
     proposals. The proposal offers short-term federal relief for 
     increasing state financial risk over the long term. Our 
     coalition firmly opposes the President's proposed plan since 
     it would have long-term detrimental effects on MassHealth 
     recipients and providers.


                 MAINTAIN THE FEDERAL/STATE PARTNERSHIP

       We believe that both federal and state governments have an 
     obligation and responsibility to maintain their financial 
     commitment to the Medicaid program. The Administration's 
     reform proposal would sever the federal and state financial 
     partnership and replace it with a fixed federal commitment 
     and state maintenance of effort. This plan would destabilize 
     the financial foundation of the Medicaid program since 
     federal financial participation would no longer extend to 
     costs that grow beyond its fixed contribution. If 
     Massachusetts cannot shoulder the burden of future cost 
     growth, it will be faced with further reducing provider 
     payments and/or limiting coverage and benefits.
       We also strongly oppose any proposal that would force 
     states to radically transform their Medicaid programs in 
     order to receive federal fiscal relief. The President's 
     proposed plan would require reduced federal payments in later 
     years in order to repay additional federal support given now. 
     Massachusetts would bear the ultimate risk of any cost 
     increases that grow beyond the fixed federal commitment. 
     States that need immediate relief and new programmatic 
     flexibility should not have to risk the mission of their 
     Medicaid program.


                      PROMOTE FINANCIAL INTEGRITY

       Unfortunately, the Administration's proposal seeks 
     fundamental change to the Medicaid program and ties any 
     fiscal relief for states to the acceptance of such proposed 
     changes. It weakens the guarantee of coverage for vulnerable 
     populations and dismantles the Disproportionate Share 
     Hospital Payment (DSH) program, which is our nation's primary 
     source of support for safety net hospitals that serve the 
     most vulnerable Americans. Indeed, last year Massachusetts 
     received $290 million in federal Medicaid DSH funds.
       Further, the Administration's approach would cap federal 
     spending using fiscal year (FY) 2002 spending as the base 
     year, updated yearly by a non-specified trend factor. Like 
     DSH funding that was initially capped in 1991, this new 
     proposal caps a state's Medicaid spending at last year's 
     level of spending--penalizing states that have yet to 
     expand benefits and coverage, and severely limiting the 
     ability of all states to expand coverage during better 
     economic times or even to weather growth in Medicaid 
     eligibility due to increasing unemployment during 
     recession. This new cap proposal also has the potential to 
     mirror the further reductions to DSH spending that took 
     effect in the Balanced Budget Act of 1997.


                         PROTECT ACCESS TO CARE

       The President's reform proposal simply translates into a 
     program that over time will barely meet the needs of the 
     mandatory population by putting pressure on states to reduce 
     coverage for non-mandatory populations and to reduce payments 
     to providers. This proposal has the potential to damage core 
     services delivered by health care providers to all MassHealth 
     patients in Massachusetts:
       Hospitals, reeling from Medicaid reimbursement rates that 
     are close to 30 percent below the cost of delivering care, 
     cannot sustain further hits without compromising their 
     mission and cutting vital services. Reductions in Medicaid 
     enrollment will exacerbate hospital difficulties by 
     increasing uncompensated care costs and decreasing Medicare 
     Disproportionate Share Payments.
       Nursing homes already receive Medicaid rates that average 
     $20 per day below cost in Massachusetts. Over the past four 
     years, 91 homes with 6,200 beds have been forced to close.
       Medicaid also pays home health agencies between 28 to 35 
     percent below what it costs to provide care. Additional 
     reductions will likely result in agencies either becoming 
     insolvent or putting other patients on the caseload at risk 
     by continuing to provide care.


                         PROVIDE FISCAL RELIEF

       Instead, Massachusetts and other states require immediate 
     and meaningful federal support. Such support should be in the 
     form of an increase in the Medicaid federal medical 
     assistance percentage (FMAP) and the elimination of the 
     scheduled fall-off in federal Medicaid DSH funding. Members 
     of Congress have introduced legislation to enact these 
     proposals and we urge your support of these bills.
       The nearly 1 million Massachusetts residents covered by 
     MassHealth deserve federal action to address the current 
     crisis that does not put additional financial pressure on our 
     state, nor diminish the guarantee of coverage for our most 
     vulnerable patients. We look forward to working with your 
     administration on alternative mechanisms to meet the current 
     and long-term challenges associated with MassHealth.
           Sincerely,
     Ronald Hollander,
       President, Massachusetts Hospital Association.
     Abraham Morse,
       President, Massachusetts Extended Care Federation.
     Patricia Kelleher,
       Executive Director, Home & Health Care Association of 
     Massachusetts, Inc.

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