Congress, governors look for Medicaid reforms of their own

Health and Human Services (HHS) Secretary Mike Leavitt is expected soon to name the members of a bipartisan commission charged with recommending ways to reduce Medicaid spending by $10 billion, but the recently chartered panel could be crowded out of the debate on changes to the healthcare program for the poor.

So far, Congress, the nation’s governors and state lawmakers are undertaking independent studies of Medicaid that are advancing on parallel, not intersecting, tracks, spokespeople said.

In the meantime, the House Energy and Commerce and Senate Finance Committees, the congressional panels that actually must figure out how to find the savings, will move ahead with their own efforts, aides said.

The committees must file reconciliation reports to their respective budget committees by Sept. 16 — only 15 days after the bipartisan Medicaid commission is due to issue its findings, if it reaches an agreement.

“The process is driven by Finance Committee members who will need to develop the package that can be reported from committee,” said a GOP aide who emphasized that “the Medicaid commission will be making important recommendations that we look forward to seeing.”

A spokesman for the Energy and Commerce Committee made a similar assessment. The aide said Chairman Joe Barton (R-Texas) is not waiting for the commission and will move forward. Rep. Nathan Deal’s (R-Ga.) Health Subcommittee held a hearing on Medicaid in April.

The Senate committee must find $10 billion in mandatory program savings, while the House panel is instructed to trim $14.7 billion. Both are expected to focus most — if not all — of their attention on Medicaid spending.

A House Budget Committee spokesperson said authorizing committees are expected to hold hearings in June and July to provide enough time to mark up legislative language so that it can be included in a reconciliation bill at the end of the year.

Meanwhile, the governors are forging ahead with their own bipartisan discussions through the National Governors Association in an effort to achieve consensus on Medicaid, which the states jointly finance with the federal government. The National Conference of State Legislators is engaged in yet another effort.

The bipartisan Medicaid commission’s membership is meant to include Leavitt and other HHS officials, current or former governors and state Medicaid directors, and experts on public policy, all of whom will be chosen by Leavitt. The House and Senate leadership on both sides of the aisle and the chairs and ranking members of the two committees of jurisdiction also are entitled to appoint one member to a nonvoting seat.

The White House and the governors initially did not endorse the establishment of the commission, which came into being as part of a compromise on the fiscal year 2006 congressional budget resolution. That deal was spearheaded by Sens. Gordon Smith (R-Ore.) and Jeff Bingaman (D-N.M.), who urged caution about the unintended consequences of slowing the rise in Medicaid spending.

Smith originally favored commissioners’ being chosen by the White House, both parties in Congress, governors, state legislators, state Medicaid directors and the U.S. comptroller general. Smith later had he would endorse an independent body such as the National Academies’ Institute of Medicine to oversee the panel, rather than HHS.

Smith is “reserving judgment until he sees who’s named,” a spokesman said.

Democratic leaders have decided to boycott the commission, which could further undermine the panel’s ability to influence debate.

Citing concerns about the objectivity of a body assembled by a Bush administration official and complaining that the congressional representatives on the panel will not be entitled to vote, House Minority Leader Nancy Pelosi (D-Calif.), Senate Minority Leader Harry Reid (D-Nev.), House Energy and Commerce Committee ranking member John Dingell (D-Mich.) and Senate Finance Committee ranking member Max Baucus (D-Mont.) on Thursday denounced the panel’s basic mandate to reduce Medicaid spending by $10 billion.

Paul Ginsburg, a health-policy specialist and former Congressional Budget Office official who is president of the Center for Studying Health System Change, said this apparent weakening of the commission’s mandate could affect Leavitt’s ability to place key people on the panel. “There are some real barriers to recruiting some of the members,” Ginsburg said. “It’s not a very attractive assignment.”

Ron Pollack, executive director of Families USA, maintained that it would not matter who sits on the Medicaid commission or how its efforts intersect with Congress’s or the states’. “It’s a sham process,” Pollack said. “It has all the earmarks of a commission that has a predetermined outcome,” he added.

Leavitt, a strong proponent of the administration’s principles on Medicaid, received permission from HHS while governor of Utah to implement changes to the state’s program that many view as a model for what the White House seeks.

President Bush has proposed overhauling Medicaid to limit the federal exposure to increases in spending and to grant states greater license to change benefits and eligibility. An effort in his first term to move his framework through Congress stalled, largely because of resistance from governors.

Some supporters of the creation of a bipartisan Medicaid commission pointed to a similar panel assembled to consider Medicare reform in 1998. Although that body failed to achieve the supermajority needed formally to recommend policy changes to Congress, it advanced the debate on the program and brought together some of the lawmakers who led the effort to pass the Medicare prescription-drug benefit in 2003, such as House Ways and Means Committee Chairman Bill Thomas (R-Calif.) and then-Sen. John Breaux (D-La.).

Freshman Rep. Bobby Jindal (R-La.) was executive director of the bipartisan Medicare commission and before that ran his home state’s Medicaid program. He said that the Medicaid panel under construction differs from the Medicare commission in some important respects.

The Medicaid panel must develop its recommendations in conjunction with a legislative timeline — a constraint not placed on the Medicare deliberations in 1998 and 1999, Jindal said. That was done to avoid the “many short-term pressures” of the politics of reform, he explained.

Jindal also noted that the minority Republican members of the Medicare commission initially resisted participation in the Democratically dominated process but agreed to join in after receiving assurances that their points of view would be considered. This time, Democrats have flatly rejected the notion that $10 billion should be cut from Medicaid.

For the new panel, Jindal suggested, “success [is] in not necessarily the commission coming up with a report” but in influencing the other discussions.

Governors, state legislators and members of the Medicaid commission also will be motivated to collaborate with federal lawmakers out of fear that “Congress may act without them,” Jindal observed. Moreover, he said, “there seems to be growing momentum that the status quo is not defensible.”