Rules will affect essential health services for vulnerable Oregonians

The Bush Administration has issued a number of Medicaid regulations over the last year that will substantially reduce federal health care investment in Oregon — by $163 million in federal fiscal year 2009 and by $865 million over the next five years, according to an analysis by the Oregon Department of Human Services.¹

The regulations make unilateral changes to longstanding Medicaid law and go well beyond the intent of Congress when it enacted recent health care legislation. Concern about the rules led Congress to delay implementation of many of the regulations, but the rules will go into effect this spring unless Congress takes further action.

How will the new Medicaid regulations impact Oregon?

Targeted case management. New rules limit federal funds for case management services that help Medicaid beneficiaries receive needed medical, social and educational services. In Oregon these services benefit children in foster care, high risk infants, and people with physical or mental disabilities and addictions. Estimated impact: $52 million in FY 2009 and between $288 and $316 million in FY 2009-2013. Effective: March 3, 2008.

Rehabilitation services. New rules limit federal funds for types of rehabilitative services for children and adults with mental illness or developmental disabilities. Estimated impact: $72.9 million in FY 2009, and $378.6 million in FY 2009-2013. Congressional moratorium until June 30, 2008.

School-based services.New rules eliminate federal funds for outreach, enrollment assistance, coordination of health care, and related activities by school personnel to enroll eligible children in Medicaid. Rules also bar use of federal funds for transporting children with special health needs to school if they receive needed health services at school. Estimated impact: $10.3 million in FY 2009 and $54.8 million in FY 2009-2013. Congressional moratorium until June 30, 2008.

Government Provider Cost Limit. New rules impose additional cost reporting requirements on the state Medicaid agency and governmental health safety net providers. Estimated impact: $6.2 million in FY 2009 and $33 million in FY 2008-2013. Congressional moratorium until May 25, 2008.

Graduate Medical Education. New rules eliminate federal funding that Oregon and most states use to reimburse teaching hospitals that typically serve the most vulnerable. Such hospitals incur additional costs associated with their mission of educating physicians and caring for patients who require more complex care. Estimated impact: $21.1 million in FY 2009 and $110.7 million FY 2009-2013. Congressional moratorium until May 25, 2008.

Additional Resources:

Department of Human Services response to U.S. House of Representatives Committee on Oversight and Government Reform, February 15, 2008, available at http://www.www.ocpp.org/2008/Binder1.pdf.

Administration’s Medicaid Regulations Will Weaken Coverage, Harm States, and Strain Health Care System, Center on Budget and Policy Priorities, revised February 22, 2008, available at http://www.cbpp.org/2-13-08health.pdf.

Medicaid: Overview and Impact of New Regulations, Kaiser Commission on Medicaid and the Uninsured, January 2008, available at http://www.kff.org/medicaid/upload/7739.pdf.