Senators try to stave off nursing-home cuts

A bipartisan group of 32 senators is pressuring the Bush administration to forgo significant cuts to nursing-home payments as Medicare policymakers rush to finalize regulations that implement the controversial reductions.

The lobbying effort from the Senate comes as administration officials are debating the merits of the cuts. The White House and the Department of Health and Human Services (HHS) are analyzing the political fallout that would accompany the payment reductions as well as the criticism on fiscal discipline that would be directed their way if they back off.

A draft letter from 22 Senate Democrats and 10 Senate Republicans to the administration states, “We are writing to express our views that if the administration pursues regulatory action to cut critical Medicare funding from skilled nursing facilities, more than 1.6 million frail elderly and disabled Americans will be in jeopardy of losing access to these vital services.”

The letter also cautions that lower nursing-home payments would threaten continuing progress on improving the quality of care, which has been an area of significant focus in Congress.

The lead signatories, Sens. Olympia Snowe (R-Maine) and Kent Conrad (D-N.D.), are joined by a diverse group that includes the third-ranking Senate Republican, Rick Santorum (Pa.), and Minority Leader Harry Reid (D-Nev.). The letter is addressed to HHS Secretary Mike Leavitt; White House Office of Management and Budget (OMB) Director Joshua Bolten and Centers for Medicare and Medicaid Services (CMS) Administrator Mark McClellan were sent copies.

Leavitt received a similar letter from 43 House members and another from three GOP governors last month.

At issue is a change to the way Medicare pays for nursing-home care that is included in President Bush’s fiscal year 2006 budget request. The OMB estimates that “refining” the payment system would save $10.1 billion over five years. The White House has favored these changes for several years but has backed off in the face of staunch opposition from the industry, patient advocates, states and Congress — as well as within HHS and CMS.

The proposed rule could be finished by Friday, said a CMS official who conceded that similar deadlines have come and gone.

CMS has delayed publishing the regulation as McClellan has haggled over the final direction of the rule with the White House, an agency official said. After a meeting with Bolten on Friday, McClellan was able to give instructions to his staff to move ahead with drafting the regulation.

The agency must finalize its work — amid competing demands from the White House, Congress and other interested groups — in a relatively short timeframe.

The final rule must be in place by July 29, according to CMS. Because the proposed rule requires a 60-day public comment period, the agency will have to act quickly.

The Senate letter acknowledges the White House’s goal of finding savings from entitlement programs but maintains “we cannot afford for this to be at the expense of our seniors most in need of assistance in nursing homes.” The letter cites an industry calculation that the payment-system changes would cost nursing homes $24 billion over 10 years.

The senators remind the administration, “We in Congress have consistently restored Medicare funding to help stabilize the long-term care sector.”

The House and Senate GOP leadership likely would be reluctant to undo legislatively a rule that puts in place cuts of that magnitude, despite the strong opposition, to forestall opportunities for larger changes to Medicare.

The letter hints at a means for the White House to achieve its aims for refining Medicare’s nursing-home payment system: addressing Medicaid, which finances the majority of the nation’s long-term-care expenses.

The prospects for a debate on Medicaid are taking shape. The governors are working to finalize a framework for reforming the program. Moreover, the recently passed congressional budget resolution compels Congress to seek $10 billion in Medicaid spending reductions.

“Over the years, skilled nursing facilities have come to rely on Medicare to make up for chronic under funding by Medicaid. This relationship between Medicare and Medicaid cannot be ignored,” the letter states. This argument has prevailed in recent years as the OMB has looked to Medicare nursing home payments for savings.

In addition to the upcoming effort to restructure Medicaid, House Ways and Means Committee Chairman Bill Thomas (R-Calif.) is eyeing long-term care as a component of Social Security reform. Thomas indicated April 29 that creating incentives for people to save for their own long-term-care expenses would take pressure off both Medicaid and Medicare.