NYT editorial criticizes proposed Medicaid reimbursement rules

Sep 11 2006

Rules proposed by the Bush administration that would reduce Medicaid reimbursements to public hospitals and nursing homes could "have a huge potential impact on an extremely frail population" in states that have enacted laws to "take full advantage" of current rules, a New York Times editorial states (New York Times, 9/10).

The rules -- part of the fiscal year 2007 budget proposed by President Bush -- would reduce from 6% to 3% the allowable rate that states can tax hospitals and nursing homes.

States impose such taxes to increase the amount of Medicaid matching funds provided by the federal government and offset the cost of the taxes for hospitals and nursing homes through higher reimbursements.

Two-thirds of states currently impose such taxes (Kaiser Daily Health Policy Report, 8/14).

"The nation obviously needs a better way to pay for care of the elderly poor that does not depend on accounting gimmicks and shell games," the editorial states, adding, "But short of a solution, the least the federal government should do is to allow states ... to continue to operate under the current rules."

The editorial concludes, "Upending the rules to save the federal government money at the expense of eroding the care of the elderly poor is a profoundly bad idea" (New York Times, 9/10).