A Scalpel, Not an Ax, for Medicaid

NYT editorial

Many states are struggling to balance their budgets by curbing spending on Medicaid, a joint state-federal program that provides health insurance for the poor and disabled. They have little choice because Medicaid is one of their biggest, fastest-growing expenses. The risk is that injudicious cuts could harm their most vulnerable citizens.

A lawsuit, which the Supreme Court is scheduled to hear in the coming term, will determine whether there is any recourse for Medicaid beneficiaries who may have less access to health care because of such cuts. Beneficiaries need the right to sue — and to negotiate legal settlements — so that they can force states to consider whether reducing provider payments will limit access to care.

There are few painless ways to cut Medicaid; there is only so much fraud, waste and abuse that can be easily eliminated. Payments to drug companies and medical device makers can often be cut without harming beneficiaries. But many states resort to reducing payments to doctors, hospitals, nursing homes and other providers, which seems preferable to eliminating benefits like dental and vision care or charging the poor higher co-payments.

The painful choices were illustrated by events in California, which has far more Medicaid beneficiaries and a bigger budget shortfall than any other state. California tried in 2008 to cut Medicaid payments to providers by up to 10 percent. The state was sued by providers, who stood to lose revenues, and beneficiaries, who stood to lose health services, on the grounds that the cuts violated crucial provisions of federal Medicaid law.

(More here.)