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 Senate Finance GOP Wants ‘Super Committee’ To Cut Medicare Medicaid Spending

Senate Finance Committee Republicans have sent a comprehensive list of recommendations to the Joint Select Committee on Deficit Reduction (JSC), the 12-member Super Committee, on how to revamp the nation’s economy top to bottom, including making a major overhaul of the Medicare and Medicaid systems, which they call unsustainable in their current form.

The 21-page document outlines changes to the tax system, Social Security system, and a range of programs in the health care sector, most notably the scrapping of the Affordable Care Act health care reform law. Other proposals urge the Super Committee to address the Medicare eligibility age, the impact of supplemental coverage on overuse of services, a uniform deductible, and fraud and abuse.

For Medicare Part A, which encompasses post-acute care for seniors, the finance panel Republicans said future payment adjustments are legitimate, but must be used to maintain the solvency of the Part A Trust Fund. “Unfortunately, PPACA [reform law] slashed Medicare by over $500 billion and used it mostly to finance new entitlement spending. Nearly every deficit reduction group has included a range of options for adjusting payments to providers,” the document said.

They recommend reducing variations in Medicare spending, noting that spending patterns are uneven and if higher spending areas are brought in line with lower spending areas, Medicare would see a 29 percent decrease in overall outlays.
The group also wants provider payment realignment, eliminating cost shifting from one care setting to another. “The JSC should examine policies that address the providers’ desire to be paid for the appropriate services, regardless of where they are provided. Paying for services in this manner will bend the cost curve downward,” the recommendation said.

Medicaid comes under scrutiny as well, with the Republican proposal pointing to the need for a significant overhaul, calling the program’s ever-expanding costs a major reason for state and federal budget deficits. They want states to have more control in how Medicaid dollars are spent and favor proposals made by Republican governors to use block grants and other mechanisms to cap costs.

“The JSC should also consider proposals to empower states to implement innovative solutions that meet the unique needs of their populations,” the Finance Committee Republicans said. These include modernized eligibility requirements, provider reimbursement favoring quality over quantity, and encouragement of healthy beneficiary behavior to better manage chronic disease.

Separately, a coalition of hospitals and health systems sent a letter to the Super Committee asking that the Medicaid program not be undermined during the deficit reduction talks. They object to one plan being floated to combine the various Medicaid Federal Medical Assistance Percentages (FMAPs) given to states into a singled blended rate for all populations and services, which would be followed by an across-the-board cut to the overall rate.

“While we do not oppose a blended rate in principle, there is no basis in sound public policy for the federal government to arbitrarily reduce its share of Medicaid spending,” the coalition letter said. The proposal would simply shift costs onto states and burden providers and beneficiaries to a greater degree, the coalition said.

The letter is signed by the National Association of Public Hospitals and Health Systems, the American Hospital Association, and a number of other stakeholders.

The JSC has un+til Nov. 23 to make a proposal to Congress on how it plans to cut the deficit by $1.2 trillion.
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