The National Governors Association did not meet its May 14 deadline to come to a consensus on an alternative to the Administration’s Medicaid reform plan introduced in January.

In a speech May 21, CMS Administrator Tom Scully said he and HHS Secretary Tommy Thompson told the governors at their meeting that they have a “small window” (no later than July) to get Medicaid reform in Congress this year. 

NGA rejected the Administration plan, which would provide what Scully calls “forward funding” to states that elected to participate.

 The plan (similar to getting your paycheck in advance) would give states more federal funds over the first seven years than they would get under current law – with no state match required – but in the following three years, sharp reductions in federal funding would amount to a “payback” of the funds to the government. Participating states would assume the risk that their economies would support their Medicaid programs in the later years.

NGA sources admit that a few vocal opponents among the 50 governors could derail the effort. (Some advocacy groups have hoped for just that, encouraging advocates to contact their governors to urge them not to support “reforms” that could eliminate hard-won consumer protections and benefit guarantees in the current law.) 

One lobbyist suggested that some relief for state costs for “dual eligibles” (people who qualify for both Medicare and Medicaid) would be considered an accomplishment this year – particularly having Medicare assume prescription drug coverage for Medicaid beneficiaries. The NGA would also like Medicare to relieve states of the cost of Medicaid recipients’ Medicare co-pays and deductibles. 

What NGA Supports
NGA officials are unwilling to discuss how they would finance their plan (other than to indicate that they don’t like the risk in the Administration proposal), but they freely discuss the long-term care principles the governors have agreed to, which are:

• Shifting all – or even some – of the $90 billion a year cost of services for “dual eligibles” to Medicare.
• Creating tax incentives for long-term care insurance and family caregiving.
• Ending the institutional bias in Medicaid funding. This includes providing Medicaid reimbursement for “consumer-directed care,” home modification, and respite programs, and allowing states to cover home and community-based services without obtaining waivers from CMS.
• Giving states flexibility in what beneficiary needs they meet and allowing them to provide services in only one part of the state.

What the Administration Wants
The Administration has never produced a public document detailing its Medicaid reform proposal. However, a  “Medicaid modernization model” developed by CMS for its discussions with NGA has been going around Washington. 

The Administration’s long-term care proposal would:

• Give states broad flexibility to develop financial resource tests for eligibility.
• Allow people who do not meet the state resource test to “buy in” to the program.
• Require mandatory coverage only for those who meet the state resource test and who require a nursing home level of care.
• After a three-year transition period, require states to “level the playing field” between support for institutional care and a wide range of home and community-based services. States could make eligibility for institutional care more restrictive than for home and community-based services. 
• End the ban on using Medicaid funds for state mental hospitals.
• Require states to individually tailor services to beneficiaries based on an annual assessment. 
• Allow states to implement a voluntary system of “self-directed services,” including counseling and other assistance in obtaining appropriate long-term care services.
• Allow states to impose higher cost-sharing requirements on residents of institutions.

The Administration plan does not address regulation of the newly Medicaid-funded home and community based services that would be supported. (Also scary.)

 An NGA official stressed that states do not want federally imposed standards and regulations.  This could mean that where you live may make a very big difference in how you are treated.  Each state would basically make its own rules.

State Fiscal Relief
Newspapers reported May 22 that the House and Senate had reached a deal on a tax cut bill with $20 billion for state fiscal relief. Half of that amount had been reserved for relief for state Medicaid programs, including nursing homes.  

Tort Reform
The House has passed a tort reform bill, H.R. 5, but the Senate version, S. 607, was believed dead on arrival because of its severe $250,000 cap on non-economic damages. Efforts to introduce a bipartisan alternative have so far failed. House Republicans considered attaching H.R. 5 to their version of the Medicare prescription drug bill, apparently in an effort to force the Senate to act on tort reform, but a House committee staff director says that the idea no longer seems to be under consideration.

Reinstatement of Nurse Aide Training
On a party line vote (Republicans for, Democrats against), the House Ways and Means Committee recently passed an amendment that would give HHS the authority to develop guidelines to reinstate nursing homes’ right to provide nurse aide training after a fine of $5,000 or more.

There has been strong opposition to adoption of the amendment without greater consideration and understanding of the impact.  Opposition was entered into the committee record.

 The Medicare contracting reform bill to which the amendment is attached must be reconciled with the House Energy and Commerce Committee’s version, which does not include the amendment. This amendment is one of the highest legislative priorities of the nursing home industry, which maintains that the automatic two-year denial of nurse aide training privileges for serious penalties is hurting facilities’ ability to fill vacancies.

Elder Justice Act
The Elder Justice Act is expected to be introduced in the House shortly by Rep. Emanuel (D-IL). By May 19, the bill had more than 30 House sponsors. Some ombudsmen and state and local citizen advocacy groups have joined the Elder Justice Coalition, a coalition of organizations supporting passage of the bill. For information, further information on this bill you can contact Amy Hooper at [email protected].

Staffing Accountability Act
The National Citizens Coalition for Nursing Home Reform has proposed a series of changes to this bill, which Senators Grassley, Rockefeller and Breaux introduced last year as S. 2879.

The proposal is designed to ensure that CMS implements plans to institute a new nurse staffing data collection system based on payroll and contract data, and that it implements quality measures based on staffing and turnover levels.

Feeding Assistant Regulation
CMS officials say the final regulations allowing states to adopt “feeding assistant” programs will be published in mid-summer.  The industry has urged CMS to move the publication date forward as much as possible (this says something!). 

 It appears that the final rules will not be substantially different from the proposed regulations, which were published last year with minimal federal guidance on how states run the programs.