Slow Down Train Toward State Medicaid Fiscal Cliff – By Joel Aaron

January 18, 2013

Georgia has an opportunity to implement long-term solutions to our budget woes while strengthening our Medicaid system this year if lawmakers are willing to slow down the train and think strategically rather than fill a Medicaid gap at all costs. AFP Georgia activists have to move fast to make sure this happens in the House of Representatives.

The Georgia Senate voted overwhelmingly Thursday on passage of SB24 to extend a temporary patient provider fee – the “hospital bed tax” – and extract nearly $250 million from virtually every individual and business with traditional health insurance coverage. The fee is assessed to cover the burdensome costs of Medicaid. This allows the State to draw down over $500 million dollars in Federal matching funds for the program. The costs of this mandated service is set to skyrocket under the incoming provisions found in ObamaCare.

The move hurts Georgians for several reasons.

The Senate bill provides political cover by transferring the taxing authority for setting the fee amount from the duly elected Legislature to an unelected bureaucracy in the State’s Department of Community Health. The danger is that there are few restrictions on the Governor’s ability to instruct the Department to ignore the budgeting process and assess greater fees in the future. The Legislature retains the Appropriations authority and the dollars collected are placed in segregated funds, however, this represents a dangerous cocktail where the Legislature has little oversight authority and fees can rise unchecked on Georgia taxpayers to cover future Medicaid expansion costs. They are also subject to elastic interpretations of what constitutes a “medical assistance payment” in the future.

The bill does nothing to address the long-term structural cost issues surrounding Medicaid solvency and does not bind the Legislature to do anything about them in the future. In fact, it sets a precedent where Georgia bows to the Fed any time the requirements are raised in order to receive matching funds.

The legislation also pushes the provider fee, enacted in 2010 as a temporary solution, further in the direction of permanency. The current argument favoring extension of the fee cites the unpredictability of health care costs over the next couple years as Federal law mandating State administered Medicaid expansion is implemented. This legislation pushes the fee collection authority to 2017. This is a full two years beyond the implementing time frame. In other words, two years too long.

AFP Georgia activists must insist that the House stand strong and add several common sense amendments to the legislation being hurled at them by the Senate under pressure for fast-track passage.

A long-term solution for Georgia’s Medicaid program that strengthens it by cutting service costs through malpractice reform.
A 2012 BioScience Valuation report shows an $8 billion annual savings to Georgia families and business alongside a $1 billion annual savings in Medicaid with similar impacts to Medicare. The savings are found by replacing our current medical malpractice model with a Patients’ Compensation System that gives patients more access and helps physicians reduce medical errors.

A shortened window on the provider fee extension.
Most of the Federal law found in the Patient Protection and Affordable Care Act (“ObamaCare”) are set to implement within the next two years. Georgia will have a fairly clear picture of the impact by the end of 2014. Our Medicaid fee extension should not go any longer than is necessary.

Kill the “pass-the-buck” strategy where the General Assembly puts politics above duty
The General Assembly is responsible for assessing State taxes and fees. They should not play reckless with that authority by off-putting it to a State agency in order to avoid possible political ramifications. Explain the need, take the hits and take responsibility.

The difficulty of funding Georgia’s Medicaid gap is very real with the state facing a $1 billion dollar hole but the opportunity is as great as ever to reform the system long term and save billions for Georgia taxpayers during a difficult period. It’s time to slow down the train to keep it on the tracks.

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