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ACP to Clinton: Stop more cuts to Medicare, Medicaid

From the January 1996 ACP Observer, copyright 1996 by the American College of Physicians.

By Kathleen Haddad

The College has asked President Clinton to reject any further cuts in Medicare and Medicaid beyond those he offered in his latest budget reconciliation proposal, issued Dec. 6.

In a Dec. 22 letter to President Clinton, ACP President Gerald E. Thomson, FACP, wrote: "We urge you not to agree to cutting more from these programs than the reductions in your recent proposals, which, as you know, are already far higher than the level projected by your administration as necessary to extend Medicare trust fund solvency."

While budget negotiations were stalemated at press time and parts of the government remained closed, talks were expected to resume before the end of the year. However, prospects for compromise remained uncertain.

At press time, the president's latest proposal called for cuts of $54 billion in Medicaid and $124 billion in Medicare over seven years. The Congressional Republicans were seeking $117 billion from Medicaid and $202 billion from Medicare. The president proposed a tax cut of $69 billion; the Republicans $240 billion. These are the major issues of disagreement in the on-again, off-again negotiations.

In his letter to the president, Dr. Thomson emphasized the importance of retaining guaranteed coverage for Medicaid eligible individuals along with federal standards for benefits, eligibility and quality. The president has proposed holding down costs and retaining the guarantee through a per-capita limit on Medicaid expenditures. This would, for example, guarantee coverage for families who become eligible during a recession. Congressional Republicans would eliminate the existing federal guarantee of coverage and turn Medicaid over to the states through block grants.

"While a per capita cap on expenditures is far preferable to a block grant, without federal standards (a per capita cap) could create incentives to reduce services and quality of care. A required federal benefit package is essential, as are standards governing accountability, quality review and other elements. ... We urge you not to lower program standards in the name of state flexibility," Dr. Thomson wrote.

In the letter, the College also commented on:

  • Medicare hospital cutbacks. ACP urged the president to protect institutions serving the inner city and rural poor from the severe pressures of private sector discounts and public funding reductions. "While further downsizing of the hospital sector is inevitable, this must be planned and carefully controlled," Dr. Thomson wrote.
  • Medicare physician payment. ACP strongly urged the president to accept the Congressional proposal for immediate implementation of a single Medicare conversion factor, which would improve relative payment for evaluation and management services. "In light of your consistent support for primary care, we were dismayed to find in your proposal a two-year transition. ...We urge you to support immediate implementation of a single conversion factor to correct years of inequities that have favored surgical procedures over the evaluation and management services that are the core of primary care," Dr. Thomson wrote.
  • Graduate medical education (GME). The College offered qualified support to measures in the Republican reconciliation bill to create a trust fund for Medicare funding of GME. Because HMOs do not conduct GME, the College also backed efforts to channel the GME portion of Medicare's premium to HMOs to the trust fund. The College stressed that these measures are only first steps toward all-payer funding of GME.
  • Provider sponsored organizations (PSOs). ACP urged the president to reject measures in the reconciliation bill that would give states regulatory control over Medicare PSOs and instead adopt the recommendation of HCFA Administrator Bruce Vladeck to allow for federal certification. A uniform process designed specifically for PSOs is necessary if they are to become viable options, the College argued.

In the letter, the College also called for meaningful liability reform and exemption of physician office labs from the Clinical Laboratory Improvement Act, which were not part of the Congressional reconciliation bill.

Kathleen Haddad is Senior Associate for Public Affairs in ACP's Washington, D.C., office.

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